WASHINGTON, DC – On Tuesday Congressman Mike Thompson (D-Napa Valley) introduced the “Taxpayer Protection Act,” which would impose a 90 percent tax on all bonuses paid by businesses such as AIG that received rescue money from the government.

Public outrage has been mounting over the last week, in the wake of the announcement that AIG was paying $165 million in bonuses to executives.

“It’s outrageous that some of the same bankers who helped create this economic mess are now going to be rewarded for their failures with taxpayer dollars,” said Thompson. “By taxing all bonuses paid out by companies that received money to help them stay afloat, we’ll send a message to these folks that business as usual is no longer acceptable. I would prefer to tax these bonuses at 100 percent but that level is considered confiscatory and doesn’t pass legal muster.”

Currently, the IRS withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million dollars.

Under Congressman Thompson’s legislation, any entity that received assistance under the Emergency Economic Stabilization Act of 2008 would be subject to a bonus tax rate of 90 percent.

Thompson is a senior member of the Ways and Means Committee, which has jurisdiction over all tax-related matters coming before Congress.

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