Congressman Cohen Sponsors Bill to Tax Record Breaking Wall Street Bonuses
January 14, 2010
H.R. 4426, the Wall Street Bonus Tax Act, will tax bonuses at firms that have received assistance through the Troubled Asset Relief Program at a rate of 50 percent for all bonus compensation in excess of $50,000, both cash and stock awards. Revenues generated through the tax will fund a new direct lending program administered by the Small Business Administration (SBA).
“With ten percent of Shelby County citizens unemployed, we need to be doing more to create jobs and promote small business development,” Congressman Cohen said. “The same Wall Street bankers who just last year came to Congress looking for a taxpayer bailout are now preparing to award record-breaking bonuses. That’s just not right. During these tough economic times, financial firms should be taking their windfall profits and helping to promote economic development – especially in the poorest communities in our country.”
During a press conference held today on the legislation, the author of the bill, Congressman Peter Welch (VT-AL) acknowledged the pivotal role Congressman Cohen will play in shepherding this bill through the Judiciary Committee.
Wall Street banks are expected later this week to announce bonus packages for the year. According to the New York Times, five of the largest banks to receive federal assistance last year – Citigroup, Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley – have collectively set aside $90 billion for compensation. Goldman is expected to pay employees an average of $595,000, while JPMorgan is expected to pay an average of $463,000.
H.R. 4426 follows similar actions taken by Great Britain and France to tax excessive bonuses. A 50 percent tax on bonuses above 25,000 pounds in the United Kingdom is expected to raise more than 2 billion pounds in revenue – roughly $3.2 billion.
Revenue generated by H.R. 4426 will fund a temporary, direct small business lending program modeled after the SBA’s 7(a) loan program. It will offer low-interest government loans to otherwise healthy businesses that are having trouble obtaining the credit they need for operating expenses and expansion.
According to CNN, the 22 banks receiving the most in Treasuryassistance have scaled back small business lending by $11.6 billionsince April last year. The SBA direct lending program created in the bill will help compensate for a distinct drop in lending to small businesses by TARP recipient firms.
________________________
Steven Broderick
Communications Director
Congressman Steve Cohen (TN-9)
1005 Longworth House Office Building
Washington, DC 20515
Direct: 202-226-7916
Main: 202-225-3265
steven.broderick@mail.house.gov
“With ten percent of Shelby County citizens unemployed, we need to be doing more to create jobs and promote small business development,” Congressman Cohen said. “The same Wall Street bankers who just last year came to Congress looking for a taxpayer bailout are now preparing to award record-breaking bonuses. That’s just not right. During these tough economic times, financial firms should be taking their windfall profits and helping to promote economic development – especially in the poorest communities in our country.”
During a press conference held today on the legislation, the author of the bill, Congressman Peter Welch (VT-AL) acknowledged the pivotal role Congressman Cohen will play in shepherding this bill through the Judiciary Committee.
Wall Street banks are expected later this week to announce bonus packages for the year. According to the New York Times, five of the largest banks to receive federal assistance last year – Citigroup, Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley – have collectively set aside $90 billion for compensation. Goldman is expected to pay employees an average of $595,000, while JPMorgan is expected to pay an average of $463,000.
H.R. 4426 follows similar actions taken by Great Britain and France to tax excessive bonuses. A 50 percent tax on bonuses above 25,000 pounds in the United Kingdom is expected to raise more than 2 billion pounds in revenue – roughly $3.2 billion.
Revenue generated by H.R. 4426 will fund a temporary, direct small business lending program modeled after the SBA’s 7(a) loan program. It will offer low-interest government loans to otherwise healthy businesses that are having trouble obtaining the credit they need for operating expenses and expansion.
According to CNN, the 22 banks receiving the most in Treasuryassistance have scaled back small business lending by $11.6 billionsince April last year. The SBA direct lending program created in the bill will help compensate for a distinct drop in lending to small businesses by TARP recipient firms.
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________________________
Steven Broderick
Communications Director
Congressman Steve Cohen (TN-9)
1005 Longworth House Office Building
Washington, DC 20515
Direct: 202-226-7916
Main: 202-225-3265
steven.broderick@mail.house.gov