This makes me pretty uncomfortable, partly because of the perverse consequences we can foresee, and partly because of those we can't. In the former category, a smart reader suggests that banks receiving bailout money might simply raise base salaries five-fold. Also, there are a lot of productive, non-nefarious people at bailed-out companies doing solid work and earning modest bonuses, whose labor we need going forward. (A lot of these people work in the non-Financial Products divisions of AIG.) It's hard not to see this as a pretty arbitrary punishment for them. Third, this seems to increase the possibility that companies in need of bailout money will resist it at all costs. Now, some of them may not be able to resist--regulators may force it on them. But you can imagine corporate managers at least delaying for an unhealthy period of time, or even having an incentive to cook their books in order to forestall a bailout.
As for the consequences we can't foresee, most of them relate to the precedent of taxing income retroactively, which seems to introduce a level of arbitrariness that can't be good for economic growth.
My only hope is that there's a hidden genius at work here--a kind of unintentional good cop/bad cop routine. That is, maybe the House's efforts will get the AIG derivatives-meisters to cough up their bonuses, which will appease the public a bit and make the new law moot. But even then the precedent is pretty ugly. Getting people to hand over money under the threat of legislation that will take it from retroactively is pretty damn coercive. There are third-world juntas that would think twice before doing this.
--Noam Scheiber