US authorities target AIG bonus recipients
It has been revealed that the US Congress is soon to implement legislation which is purely aimed at clawing back as much of the $165 million in bonuses paid to AIG employees that came from taxpayer funds. There has been a significant backlash by politicians and the public with regards to the government's role in the bonus scheme. As a consequence the US Congress has now voted in favour of a tax scheme which will see a tax rate of 90% on employee earnings above $250,000 at companies which have received more than $5 billion in government bailout funding.
This is a wake-up call to the vast number of companies in the US and UK, and around the world, that have received substantial funding from taxpayers yet implemented bonus schemes and discretionary payments as normal. The move by the US Congress places more pressure on Gordon Brown to put his words into action and implement a similar scheme in the UK. Whether he will be brave enough or whether it is in fact legal remains to be seen but the move by the US government has caught the UK authorities somewhat on the hop and heaped more pressure on them.
It will be interesting to see if Gordon Brown takes the lead from the US and implements his own special taxation regulations.
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