Upper Midwest House Members Vote 18-5 in Favor of TARP Bailout Bonus Tax
On Thursday, Upper Midwestern U.S. House Democrats unanimously supported a bill that would impose an additional tax on bonuses received from certain Troubled Assets Relief Program (TARP) recipients. The measured passed 328 to 93 in the lower chamber.
The bill (HR 1586) taxes at 90 percent bonuses given to employees of bailed out companies, such as AIG, who have family incomes of $250,000 or more.
All 15 Democrats from Iowa (Leonard Boswell, Bruce Braley, Dave Loebsack), Minnesota (Keith Ellison, Betty McCollum, Jim Oberstar, Collin Peterson, Tim Walz), North Dakota (Earl Pomeroy), South Dakota (Stephanie Herseth Sandlin), and Wisconsin (Tammy Baldwin, Steve Kagen, Ron Kind, Gwen Moore, David Obey) voted in favor of the measure.
The Republican side of the aisle, however, was split – with only the Minnesota delegation (Michele Bachmann, John Klein, Erik Paulsen) unanimously opposed to the measure. They were joined by Iowa GOPer Steve King and Wisconsin Republican James Sensenbrenner. Three Republicans voted with the Democrats – Iowa’s Tom Latham and Wisconsin’s Tom Petri and Paul Ryan.
Bachmann expressed her firm opposition to the tax:
“Folks, two wrongs don’t make a right. Without the wrong-headed $700-billion bailout, the taxpayers would never have been put in the position of their dollars being doled out for executive bonuses in the first place… The bill on the House floor today, while not mentioning AIG by name, is clearly meant to punish a specific group of individuals in response to public outrage over the bonuses. The author of the bill, Rep. Rangel, explains his motivation for the bill by saying that he “had an obligation to respond to the fears and anger of the people.” Given this motivation, a legislative action aimed at punishing individuals, no matter how loathed or despised they may be, is explicitly prohibited by the Constitution in Article I, Section 9, Clause 3.”
Wisconsin’s Rep. Sensenbreener also maintained the bill is unconstitutional and took a swipe at Democrats in the process:
“While this bill may give political cover to those who voted for the stimulus bill which approved the AIG bonuses, it is the wrong way to go about recovering the taxpayers money and ultimately, it will not work. This legislation was put forth by the Democrats to cover up the fact that they are the ones who inserted the provision into the stimulus bill that authorized the payment of these bonuses to AIG and then called for a vote before anyone could read the 1,000 page bill. It is only a matter of time before this bill is declared unconstitutional and overturned by the courts.”
Overall, 243 of 249 Democrats voted for the tax increase (97.5 percent), compared to 85 of 172 Republicans (49.4 percent).
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