![]() ![]() New York Attorney General Andrew Cuomo said AIG created 73 millionaires with bonuses of $1 million or more. Geithner said the Treasury was working with the Justice Department to determine whether provisions of the recently passed economic stimulus bill covering compensation for bailout recipients might be useful in clawing back the bonuses.īut he acknowledged the stimulus law would only pave the way to negotiations with the company. “Companies that shouldn’t be paying bonuses are. “The country is angry and I am angry,” said Baucus. The tax would be retroactive to January 1. The proposal would require these companies to pay a 35 percent excise tax, with the other 35 percent to be paid by the bonus recipient. Max Baucus, the Democratic chairman of the Senate Finance Committee, and Charles Grassley, the panel’s top Republican, proposed a 70 percent tax on bonuses for executives at firms getting money from the $700 billion financial bailout package. The special tax would be in addition to the top 35 percent income tax rate plus state and local taxes, making it possible to recover 100 percent of the bonuses, Peters said. Several lawmakers introduced tax bills likely to worry other businesses taking part in the government’s many financial rescue programs.Ī bill by Democratic Representative Gary Peters would put a 60 percent tax on bonuses over $10,000 at any company in which the government has an equity stake of 79 percent or more. ![]() “Obviously, the president is committed to working as quickly as possible with Congress to find ways to recoup this money,” said White House spokesman Robert Gibbs. Bush - expressed “outrage” on Monday about the AIG bonuses. Obama - who took office eight weeks ago and inherited the financial crisis and recession from the Republican administration of George W. “We will continue our aggressive efforts to resolve the future status of AIG in a manner that will reduce the systemic risks to our financial system while minimizing the loss to taxpayers,” Geithner wrote.ĪIG was due to have paid bonuses on Sunday to employees of its financial products unit, which made bad bets on toxic mortgages and credit default swaps that hobbled the company. He also said the Treasury would deduct $165 million from the $30 billion in additional taxpayer funds announced for AIG on March 2. “We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid,” Geithner said in the letter. The AIG affair has aggravated public anger over the rescues of big business as President Barack Obama’s new administration works to stabilize the financial system and pull the economy out of recession. Treasury Secretary Timothy Geithner laid out the conditions in a letter to congressional leaders as irate lawmakers moved quickly toward legislation that would slap a heavy tax on $165 million in bonuses paid by American International Group Inc. taxpayers before it gets another bailout of $30 billion. WASHINGTON (Reuters) - The Obama administration turned up the heat on AIG AIG.N on Tuesday over its employee bonuses, saying the embattled insurer will be forced to repay U.S. ![]()
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