There's an old adage: "There's never enough time to do something right, but there's always time to go back and fix it."I don't think this applies to most actions of Congress.Unfortunately, here "they" go again, passing H.R. 1586 -- to tax bonuses given by companies like AIG that received federal bailout money at 90 percent -- by a margin of 328-93.Democrats supported the bill 243 to 6. Republicans initially opposed the measure but, cowardly fingers to the political winds, by the time the roll call was closed 85 Republicans supported the bill and 87 opposed it. (Individual vote breakdowns are not available just yet, but I am anxious to see how the Oklahoma delegation voted.)Why 90 percent tax? Why not 100 percent?
Rep. Charles Rangel, a New York Democrat, chairman of the tax-writing House Ways and Means Committee, said he expected local and state governments to take the remaining 10 percent of the bonuses, nullifying the payouts.
Rangel said the bill would apply to mortgage giants Fannie Mae and Freddie Mac, among others, while excluding community banks and other smaller companies that have received less bailout money.
Rangel is openly inviting state and local governments to belly up to the trough. Notice that some bonus recipients are more equal than others under this rushed, unconstitutional abortion of a law. Many observers believe that the legislation creates an unconstitutional Bill of Attainder. The bill doesn't even cover all bonuses, only those going to companies receiving more than $5 billion and only on those people who make more than $250,000 in adjusted gross income. It is very narrowly targeted!I find the Associated Press report reprehensible in that it doesn't even mention the potential unconstitutionality of the bill. Instead, they quote a "corporate tax lawyer" in New York saying that of course it's okay to narrowly craft this sort of bill. It's an odd quote since the lawyer is defending a charge that the AP refuses to acknowledge in print.But the Washington Times has more integrity, and spine:
But the tightly targeted tax bill, which places a special federal tax on bonus money given out since Jan. 1, could face constitutional questions over the use of the taxing power to override legal contracts and to target retroactively a specific group of taxpayers. [SNIP]
Rep. Joe Wilson, South Carolina Republican, called the tax bill "an unconstitutional joke of a bill."
Legal scholars are divided on the constitutionality of the tax measure, but critics called it a bill of attainder — a punitive, targeted tax specifically forbidden by the constitution.
"It basically targeted on a small group of people," Sen. Judd Gregg, New Hampshire Republican, told the Bloomberg News service.
The Republican website, GOP.gov, had this to say:
By legislatively imposing a tax penalty on employees that were given bonus payments by TARP recipients, some Members may be concerned that the underlying bill may violate the Constitutional prohibition on bills of attainder. Article 1, Section 9, Clause 3, states that "No bill of attainder or ex post facto Law shall be passed." A bill of attainder is an act passed by a state or federal legislature that punishes a specific person or group without a trial. In determining whether a piece of legislation violates the constitutional prohibition against bills of attainder, the Supreme Court generally tests whether the act specifies a group of people, contains a punishment specifically for that group of people, and does not require a trial. Given that criteria, this legislation could be ruled unconstitutional for imposing a tax penalty on a specific group of individuals.
It's a shame that 85 Republican, who could have blocked this bill by staying true to their principles, chose instead to run with the mob. The good news is that the U.S. Senate must still vote on this, an event that won't take place until April when cooler heads may prevail.
Now you may ask yourself, "Why does Dave give a rat's behind whether these bonuses get taxed away?"
And you may ask yourself, "Does his beautiful wife work for AIG?"
But you should ask yourself, "My God, next time it could be me they're attacking with a 90 percent tax."
We never should have given bailout money to begin with, last fall when Mr. Bush and Treasury Secretary Paulson were telling us the sky was falling. Mr. Obama and Mr. Geithner have not only embraced bailouts, they've gotten creative and added new layers of spending only dreamed of by the Bush team.
It is wrong and it will be the death of our economy, if not our political system.
But wrong also is shredding the Constitution in order to punish people for accepting bonuses they were promised by contract and that were protected in previous federal legislation.
Labels: Congressional Follies, Shredding the Constitution