- The Washington Times - Friday, March 20, 2009



House Democratic leaders pushed through legislation this week that would heavily tax bonuses given by firms benefiting from bailout monies - to the shouts of approval from most of the media.

Like you, we heard the usual moralizing. “When there is a reward, a spelled-out-in-advance reward for those who will take undue risk - when they fail, they get a bonus, the taxpayer gets the bill,” House Speaker Nancy Pelosi said. “This must end.”

We decided to read the fine print and found some $55 million of AIG bonuses will completely escape the new tax.

Any employee at a firm receiving more than $5 billion in taxpayer assistance from the Troubled Asset Relief Program would face a new 90-percent tax on executive bonuses. The measure would only affect bonuses received on or after Jan. 1 of this year.

This turns out be a sweet deal for some at AIG. The firm paid out some $220 million to 400 employees for work performed in 2008, and roughly $55 million was paid in December, just under the wire.

Anticipating the inevitable criticism that will surely come, a spokesman for House Ways and Means Committee Chairman Charlie Rangel, New York Democrat, cited standard taxpayer practice.

“If you are changing tax law during a year, the general practice is that, if you are going to look back, you limit the change to the beginning of the current year,” Rangel’ s spokesman wrote in an email.

Sure. But it worked out well for certain executives, didn’t it?

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