The House of Representatives just passed by a vote of 328-93 a law to tax bonuses at a 90% rate for employees that work at corporations that have received $5 billion or more in bailout funds. The bill is retroactive to the beginning of 2009 and does not apply to people making less than $250,000/year. The Democrats voted for the bill, 243-6. The Republicans voted against, 85-87.
The bill needed a 2/3rds majority to pass because it involved a suspension of the rules. But it passed fairly easily. I don’t know if the Senate will follow suit or if they will introduce something substantially different.
I am kind of enjoying the return of 90% marginal tax rates. I don’t think we should go quite that high in general, but something between 50% and 70% would be reasonable, depending on the loopholes. The fewer the loopholes, the lower the rate can be. There’s not much point in paying out huge bonuses if the government gets to keep 70% of the money.
