During the second week of March, Congress approved a bill to tax any bonuses taken by employees of companies, like AIG, who take any of the taxpayer bail-out money. This is no light-weight tax. They approved a 90% tax, as a way to retrieve the funds being dispersed, over the outcries of taxpayers from all walks of life.
The members of Congress have come under fire for not anticipating the need to pay out the bonuses in the first place. Some individuals advocated for the cancellation of all bonuses, but legal experts warned that the bonuses were contractually required. Members of Congress specified that the 90% tax on the bonuses, was only one of a series of steps they will be taking to maintain the integrity of the money being used in the economic bail-out.
Questions to Ponder
The economic stimulus package is loved by some and hated by others. Do you believe the package was needed in order to side-step disaster?
Is the 90% tax a reasonable step, in light of the public outcry over giving the bonuses?
Do you think it would have been better to just cancel all of the bonuses?
The Stimulus Package was more than 1000 pages in length and members of Congress had less than three days to read it. Should all congressional bills have to be posted online for public review prior to the vote, as suggested by President Obama?
Can you think of another way to handle the bonuses so many executives were do to receive.
Learning Links For the Congressional Tax on Bail-out Bonuses
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