Dear Friend:

I want to let you know about the Taxpayer Fairness Act (S.2994), which Senator Jim Webb (D-VA) and I recently introduced in the Senate. Our bill would impose a tax on large bonuses paid by Wall Street banks and other firms that benefited from billions of dollars of taxpayer assistance in 2009.

Last year, to avert a financial collapse, taxpayers saved a number of companies that were considered “too big to fail.” It is outrageous that these companies are now doling out millions of dollars in bonuses while the rest of America feels the pain of their reckless decisions.

The Taxpayer Fairness Act levies a 50 percent taxpayer fairness fee on any bonus in excess of $400,000 paid by firms that took $5 billion or more in TARP funds. Only bonuses received in 2009 would be affected, since this was a year when the very survival of these institutions depended on government support. The revenues generated would be used to reduce the deficit or to help the nation recover from the recession.

Although the reckless behavior of major Wall Street firms helped lead to the financial crisis, they have benefited greatly from the response to that crisis. Today we face an enormous budget challenge rooted in the economic impact of the financial crisis. We should ask the most highly paid employees of those institutions to pay their fair share in helping us meet this challenge.

The Taxpayer Fairness Act is a reasonable, common-sense bill. At a time when so many American families are struggling, it is only fair to ask those who are benefiting from exorbitant bonuses to help pay back the taxpayers whose assistance made their very survival possible.

Sincerely,

Barbara Boxer
United States Senator