Tax could skip $2.5 billion bonus pot

WASHINGTON, March 20 (UPI) -- A tax bill meant to recoup bonuses given to employees of bailed out U.S. companies will miss the most "egregious" payout entirely, an observer said.

"By a technicality, the biggest giveaway on Wall Street will evade this bill," said Michael Garland, a spokesman at Change to Win, an affiliation of seven U.S. labor unions, The New York Times reported Friday.

Garland was referring to $2.5 billion in bonuses given out by Merrill Lynch & Co., which was purchased by Bank of America Corp. before Jan. 1.

Seventy percent of Merrill Lynch's bonuses -- the portion paid in December -- would not be affected by the punitive tax measure passed in the House Thursday. That bill targets bonuses paid in 2009.

Merrill Lynch paid another $1.1 billion in stock bonuses Jan. 2 that would be subject to the tax, the Times said.

"Bank of America ... was complicit in Merrill's payments and failure to correct this ... would give a pass to the most egregious bonus payout on Wall Street," Garland said.

Anger over bonus pay reached fever pitch this week when American International Group Inc., which is up to 80 percent government-owned, revealed it was awarding $165 million in bonus pay to current and former executives and employees.