Bailed-out insurance giant AIG just revealed that they would be paying over $165 million to traders “in the very group that caused the company to fail.”
Lucky for these traders, they’re collecting their bonuses under the Bush tax system that lowered income tax rates for the richest 2 percent of Americans.
According to our analysis, thanks to the Bush tax system, these traders are taking home $7.5 million more then they would have in the 1990s.
In 2000, this $165 million would have to have been taxed at 39.6 percent (the top marginal tax rate for top income earners that prevailed through the 1990s). Now, thanks to the Bush tax system, they’re only paying at 35 percent and saving themselves over $7.5 million.
This is assuming that most of this bonus income is taxed at the highest marginal tax bracket (a reasonable assumption based on typical base salary for Wall Street traders and the massive size of these bonuses).
The Obama budget would eliminate these Bush tax bonuses in order to cut taxes for 95 percent of American families and invest in health care, energy, and education.
See how much your family would save from President Obama’s Making Work Pay tax credit here.