Commenting upon the introduction of the Taxpayer Fairness Act on February 4, Boxer, a Democrat representing California, said: “To avert a financial collapse, taxpayers saved ‘too big to fail’ companies. 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 bill levies a 50% tax on bonuses in excess of USD400,000 paid by firms that took USD5bn or more in funds from the Troubled Asset Relief Program (TARP).

Webb, a Virginia Democrat, insisted that the proposals have nothing to do with "class warfare.”

“This is not something that’s going to run the gamut of all executive compensation and bonuses. This is a one shot deal. This is a tax on excessive bonuses of TARP recipients that received more than USD5bn from the American taxpayer in 2009," he said.

“The Financial Times, a paper dedicated to the free market, editorialized in favor of this position at the end of last year,” continued Webb. “We believe this is a fair and reasonable approach. It offers equity and a level of fairness to the American taxpayers who bailed these companies out.”

The Senators said that only bonuses received in 2009 would be affected by the legislation. They intend that the revenues generated from the tax would be used to reduce the federal deficit or "to help the nation recover from the recession."

The bill was introduced amid reports that Wall Street firms that benefited from taxpayer support paid significant bonuses in 2009.