Senate Budget ranking member Judd Gregg (R-N.H.) announced Friday that he opposes Congressional attempts to retroactively tax employee bonuses at companies that received a federal bailout.
Gregg, a fiscal hawk who withdrew as President Barack Obama’s Commerce secretary pick last month, said in a prepared statement that legislative attempts to tax the payouts at near 100 percent could set a dangerous precedent. The bills making their way through Congress, including one that passed the House on Thursday, were offered after it was revealed that American International Group, which received $170 billion in federal aid, paid out $165 million in executive retention bonuses.
“The actions that occurred at AIG relative to bonuses were despicable, but arose, in large part, because of the administration’s failure to conduct proper oversight of the funds distributed to AIG,” Gregg said. “It is wrong for members of the United States Congress and the President to propose to use the taxing authority of the government in a manner that is arbitrary, punitive, and targeted on a single group of people who they have deemed as having acted improperly. The ability to tax is one of the most powerful and important roles of a democratic government, and that power should not be used in a way that undermines its credibility and creates precedents that could lead to significant abuse.”
Gregg, a key confidant to Minority Leader Mitch McConnell (R-Ky.), and as of Friday morning is the highest-profile GOP Senator yet to oppose AIG bonus tax proposal.
Senate Finance Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) on Thursday introduced a measure in the Senate to tax bonuses.