Rep. Hagan incensed over AIG bonuses

By Marc Kovac

COLUMBUS — Outrage over big-money bonuses paid to executives of companies bailed out with tax dollars has spilled over into the Ohio Statehouse, with one lawmaker planning to introduce a resolution voicing his disgust.

“I am upset with what they’ve done and how they’ve abused the taxpayers on this whole issue,” said Rep. Robert Hagan of Youngstown, D-60th. “Someone has to stand up ... and say this is wrong. They should give their bonuses back. And they should accept the fact that they ruined this company and ruined it to the point that now the taxpayers own 80 percent of it.”

Hagan announced plans Tuesday to offer a resolution condemning the American International Group, known by the acronym AIG, which received about $170 billion in federal bailout funding, then paid its executives $165 million in bonuses.

The situation has prompted outcries from President Barack Obama and members of the U.S. Congress, including U.S. Rep. Tim Ryan of Niles, who moved quickly this week to determine whether there were legal means to force the executives to return the bonus payments.

Hagan, whose district has a median household income of about $21,000, said he wants to send a clear message to Washington that sending public funds to companies that are, in turn, providing big-money bonuses to their executives will not be tolerated.

That includes Ohio firms that have secured federal bailout dollars.

“I think that there’s a possibility that there are Ohio people involved,” Hagan said. “ Hopefully, my resolution will send that clear warning that we will be looking, we will be watching and they better not abuse the taxpayers.”

Ryan, D-17th, co-sponsored legislation today— the Bailout Bonus Tax Bracket Act of 2009, introduced by Congressman Steve Israel—that would fully recover the $165 million dollars in taxpayer funds that AIG intends to pay out to executives in the form of bonuses.

Currently, the IRS withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million. Rep. Israel’s proposal, would tax bonuses over $100,000 disbursed to employees of companies receiving TARP funds at 100 percent.

For example, if an AIG employee’s taxable income is $750,000 which includes the $150,000 AIG bonus received this year, that employee will pay the top marginal rate on $500,000 of personal income, and then the “Bonus Bailout” tax rate of 100% on the $150,000 TARP bonus.

“It boggles my mind how these executives can be so unaware of what the American people are going through. This new tax provision is a wakeup call that the days of arrogance and greed on Wall Street are coming to an end, and we will use any means necessary,” Ryan said.