Knee Jerk? House Passes Bill Taxing Wall Street Bonuses

by Benjamin Domenech on 3:24 pm March 19, 2009

WASHINGTON — The House gave strong approval to legislation intended to recoup bonuses paid by American International Group Inc. and other recipients of federal aid, after a sharp-edged debate that dramatized populist outrage over the government’s sweeping efforts to prop up the nation’s financial system.

The legislation was rushed to the floor by Democratic leaders amid a storm of protest among rank-and-file lawmakers over AIG’s decision to pay bonuses to hundreds of current and former employees, while receiving more than $100 billion in taxpayer assistance. Approved on a 328-93 vote, the measure would impose a 90% surtax on the disputed payments, effective for bonuses made after Dec. 31, 2008.

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