SAN FRANCISCO (MarketWatch) -- Top Wall Street executives reacted harshly on Friday to proposed legislation that would punitively tax bonuses awarded to employees at firms receiving federal assistance.

Citigroup Inc. C, +1.47% Chief Executive Vikram Pandit and Bank of America Corp. BAC, +1.07% Chief Executive Ken Lewis issued strongly worded internal memos about the proposed tax legislation, according to the online edition of The Wall Street Journal, while J.P. Morgan Chase & Co. JPM, +1.10% Chief Executive Jamie Dimon sought to reassure his top executives that the firm is engaging with lawmakers on the matter.

The legislation, passed by the House on Thursday, would impose a 90% tax on bonuses for employees making over $250,000 a year at companies receiving at least $5 billion in federal aid under the Troubled Asset Relief Program, or TARP.

Citi's Pandit criticized the proposed legislation in a memo to employees on Friday, arguing that it could result in the firm losing top talent.

"The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial-services employees," he wrote.

"It would affect countless number of people who will find it difficult, if not impossible, to pay back the bonuses that they earned," Pandit said. Read the full memo.

Bank of America's Lewis, for his part, said that he's written to lawmakers about why the proposed tax legislation "is of such grave concern to us," adding that it has "the potential to damage the ability of the government to engineer a financial recovery." Read memo from Lewis.

The tax legislation emerged in reaction to news earlier this week that employees of insurance giant American International Group Inc. AIG, +1.02% , which has been propped up by heavy government assistance, received $165 million in bonuses. See story about proposed bonus tax legislation.

The legislation was introduced by House Ways and Means Chairman Charles Rangel, D-N.Y.