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Senators propose 50% tax on bonuses at bailed-out firms

WASHINGTON (Reuters) - Two Democratic senators yesterday proposed legislation that would impose a one-time tax on bonuses paid to executives of companies bailed out with taxpayer money.

Senators Barbara Boxer and Jim Webb proposed a 50 percent tax on 2009 bonuses above $400,000 at any firm that has received more than $5 billion in government assistance.

The senators said they had not yet gathered broad support for the proposal, and neither sits on the tax-writing Senate Finance Committee, which would likely have to take up the bill.

A 35 percent tax on bonuses at bailed-out companies was proposed last year by the leaders of the Finance Committee, Democrat Max Baucus and Republican Charles Grassley, but it has not been acted on.

The Boxer-Webb proposal comes amid rising anger in the United States and abroad over lavish bonuses paid to executives at large financial firms so soon after governments had to use taxpayer money to rescue the financial system from collapse.