Boxer, Webb introduce tax on some Wall St. bonuses

Sens. Barbara Boxer, California Democrat, and Jim Webb, Virginia Democrat, introduced a bill Thursday that would impose a 50 percent tax on certain 2009 Wall Street bonuses in excess of $400,000. The sponsors of the Taxpayer Fairness Act were adamant that all money coming from the excise levy would go straight into the U.S. Treasury, not turn into a special-interest slush fund or trickle into other programs.

"This is for deficit reduction," Mrs. Boxer said. "People are hurting from the resounding effect of what ocurred on Wall Street."

Ms. Boxer said the bill's passage could mean $10 billion toward national-debt decrease.  

The legislation, unlike the measure introduced by Rep. Peter Welch, Vermont Democrat, in the House last month, does not target all institutions that received Troubled Asset Relief Program funds, only those that received more than $5 million. Those firms include Fannie Mae, Freddie Mac, JP Morgan and Bank of America.

Employees at any of these banks who received a bonus exceeding the salary of the president -- $400,000 -- would be required to pay a 50 percent tax on each bonus.

Both Mr. Webb and Mrs. Boxer said repeatedly that the bill "is not class warfare." Mr. Webb seemed agitated at the suggestion that the money garnered from the measure could find its way into into the pockets of special interests or to places other than the nation's bank account.

He quickly routed the discussion back to TARP money.

Those funds were lent to banks "to create liqidity in the marketplace, and then this money went other places," Mr. Webb said.