The Constitutionality of Taxing Bonuses

Berzerker

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With the AIG bailout we're hearing outrage over bonuses paid to AIG people and calls for taxing those bonuses, even a %100 tax has been proposed by members of Congress.

The Constitution prohibits ex post facto legislation for both Congress and the states, ex post facto means retroactive, ie no retroactive legislation. Congress cant pass a law today and apply it to what happened yesterday. Bills of Attainder may apply here as well...why, yes, it does... ;)

The SCOTUS has ruled in the past that this limit on Congress only applies to criminal law, not all legislation which would include tax laws. The Constitution does not make that distinction, the SCOTUS invented it. When Bill Clinton came into office, the Congress and he passed a retroactive tax increase, not only to the beginning of his administration, but they went back to Jan 1 of the previous Bush administration.

The Framers were not in the habit of explaining limits placed on Congress, at least not within the Constitution itself. But when they did limit the states, they usually clued us in on why - here's why...

Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

A retroactive tax increase impairs contractual obligations, and Congress not only knows this, they've admitted as much by giving people hit by the tax more time to pay it off like they did in '93. But this is even worse than the Clinton tax, that at least was applied to "everyone" whereas this is a tax on a specific group of people - people by name. Funny, it was Congress who handed over all this money without proper restrictions on its use and now Congress is complaining? They want people at AIG to resign? Lead the way you a-holes!
 
With the AIG bailout we're hearing outrage over bonuses paid to AIG people and calls for taxing those bonuses, even a %100 tax has been proposed by members of Congress.
Ironically by Chris Dodd, who put in the amendment to protect bonuses that were promised before February of 2009. We've known about the bonuses for months, but only now do the Democrats (who helped protect AIG's bonuses in the first place -- Chris Dodd was one of the top two recipients of AIG campaign funds? The other was Barack Obama) start complaining about them. Why?
 
"Resign or kill yourself" Grassley is a Democrat? The whining/knowledge over the AIG bonuses is pretty universal.
 
Ah, here we go:

AIG executives gave more than $630,000 during the 2008 political cycle even as the company was falling apart
Executives, not the company, doled out across the board in 2008.

Let's narrow the focus.
Both Obama and Republican presidential candidate John McCain raked in much larger sums from AIG earlier in the year. Obama collected a total of $130,000 from AIG in 2008, while McCain accepted a total of $59,499.

...

AIG's CEO Edward Liddy said he imposed new rules when he took over the struggling insurance giant six months ago, banning further lobbying of politicians and ending political donations from AIG's two political action committees.

Records indicate that AIG's PACs stopped making donations, but contributions from AIG executives continued right up to the presidential election.

One suggestion: Perhaps the money could be paid back not to AIG but to the U.S. Treasury.

Here's the list of top AIG recipients for the 2008 campaign:

1. Sen. Chris Dodd, D-Conn., $103,100
2. Sen. Barack Obama, D-Ill., $101,332
3. Sen. John McCain, R-Ariz., $59,499
4. Sen. Hillary Clinton, D-N.Y., $35,965
5. Sen. Max Baucus, D-Mont., $24,750
6. Former Gov. Mitt Romney, (R) Pres $20,850
7. Sen. Joe Biden, D-Del., $19,975
8. Rep. John Larson, D-Conn, $19,750
9. Sen. John Sununu, R-N.H., $18,500
10. Former Mayor Rudolph Giuliani (R) Pres $13,200
11. Rep. Paul Kanjorski, D-Pa., $12,000
12. Sen. Dick Durbin, D-Ill., $11,000
If I'm reading that correctly, it sounds like the money was not PAC money, but individual contributions.

edit: cross-posted w/ Amadeus. Thx for pointing us in the right direction. :)
 
government to the highest bidder

pac money was being given up till 6 months before the article's date, thats when Liddy took over and supposedly banned the practice. Thats ironic, ending pac money sure wouldn't make him any friends on Capitol Hill
 
well, that didn't take long. Amazing how fast the House can act when its ripping us off for money, they can even time travel.

The House passed a %90 tax on those bonuses...

No ex post facto laws, no bills of attainder...
 
It seems I was right when I said the US was quickly becoming a Banana Republic. Ex post facto legislation being a key component of bananaism. Another component is this fake outrage of congressmen and El Presidente about bonuses.
 
The prohibition against purely punitive taxes would be a good avenue, if it wasn't pretty much a dead letter.
 
Perhaps next there will be "Outrage" directed at Rush Limbaugh and they will tax him at 99%.

After that they can direct "Outrage" at Michael Savage and they can go after him!

Lets direct "Outrage" at Ann Coulter and Michelle Malkin after that!

This targeted "Outrage" and punitive taxes is . .. .. .. .. .. .. .. ..

I don't like AIG or anything but this targeting people for political points is so wrong.

Perhaps BHO should have "kicked the tires" and looked at what he was buying before droping $30,000,000,000,000,000.
 
Ironically by Chris Dodd, who put in the amendment to protect bonuses that were promised before February of 2009. We've known about the bonuses for months, but only now do the Democrats (who helped protect AIG's bonuses in the first place -- Chris Dodd was one of the top two recipients of AIG campaign funds? The other was Barack Obama) start complaining about them. Why?

I thought it was the Bush administration as part of the inital bailout.
Hell Rush Limbarg is still for the AIG Bonuse.

Bloomberg News reports that Neil Barofsky, inspector general for the Troubled Asset Relief Program (TARP), told the House Ways and Means oversight subcommittee today that the Bush administration “specifically contemplated” paying bonuses to AIG employees in its November agreement to provide federal bailout funds to the failing insurance giant:

The TARP contract between AIG and Treasury “specifically contemplated the payment of bonuses and retention payments to AIG employees, including AIG’s senior partners,” Barofsky said.

Yesterday, AIG CEO Edward Liddy testified that Fed Chairman Ben Bernanke approved these bonuses, saying that Federal Reserve representatives attend AIG’s “various meetings on strategy and they have the ability to weigh in — either yea or nay — on anything that we decide.”
 
It seems I was right when I said the US was quickly becoming a Banana Republic. Ex post facto legislation being a key component of bananaism. Another component is this fake outrage of congressmen and El Presidente about bonuses.

Damn, that stings.
 
Perhaps next there will be "Outrage" directed at Rush Limbaugh and they will tax him at 99%.

After that they can direct "Outrage" at Michael Savage and they can go after him!

Lets direct "Outrage" at Ann Coulter and Michelle Malkin after that!


huh? :crazyeye: Are they corporations receiving taxpayer money?
 
Slippery slope! Slippery slope! :mischief:

Why cant the legistrate punishment for the Bush administration cronies whom agreed to such bonuses ? Nah that will never happen.
Ironicly we felt the same way when $6.6 Billion went missing in Iraq and Paul bremer got the medal of freedom.
 
It is completely unconstitutional. :( We should have let AIG fail, and go into default. Then things like back pay would be greatly reduced.
 
Ironicly we felt the same way when $6.6 Billion went missing in Iraq and Paul bremer got the medal of freedom.

Apparently, we found that 6.6b. The Obama administration just oversaw 1 trillion (read: 1000 billion) magically appearing.

WASHINGTON: The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.
http://www.iht.com/articles/2009/03/18/business/fed.php

I can't wait for our US billion dollar bills.
 
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