Congress Votes for 90 Percent Tax Cut On Executives' Bonuses
Following the controversial bonuses given to top executives of American International Group (AIG), an insurance company which received bailout money from the government, lawmakers passed a new measure to avoid excessive pays for senior employees to make sure that bailout package will go to the right projects.
Lawmakers passed a new measure on Thursday that will subject 90 percent of executives' bonuses to tax cut. With this bill, the government believes that excessive pays for senior employees in bailout firms can be avoided.
The US House of Representatives introduced the new bill following the controversial bonuses of top executives of bailout company American International Group (AIG). Meanwhile, the insurance firm said its senior employees had fully returned the bonuses worth $165 million amid public outcry.
According to the new bill, the 90 percent tax cut will apply to senior employees who receive an annual pay exceeding $250,000. On the other hand, only top executives from bailout companies that received more than $5 billion from the government will be subjected—this means that companies with healthy finances are exempted.
In an interview with reporters, President Barack Obama said the new measure will deter bailout companies to give executives excessive pays amid financial crisis.
“We are not tolerating this kind of excessive compensation. I hope this [new measure] will give them a signal that such activities is completely not acceptable”, Obama added.
Few months ago, the Federal government granted AIG stimulus package totaling $182 billion to keep its finances afloat.
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