Thursday, March 26, 2009

Congress, Taxes, and the AIG Bonuses

In a rare instance, I agree with an op-ed in the Wall Street Journal. The plans in Congress to tax up to 90% of the bonuses AIG just gave out should not be allowed and are not, in my mind, constitutional. Now, that is not to say that it isn't obscene that a company that took billions in taxpayer money should be giving huge bonuses to its executives on the taxpayers' dime, or that it isn't obscene for people who drove our economy into the ground are being rewarded for it. But the problem is that the offender is AIG, not the people who got the bonuses, and that Congress gave away so much taxpayer money with so little control in the first place.

But to go back now and tax away the money from those bonuses, which were given out in a private transaction between a private company (since Congress didn't "nationalize" AIG when it gave AIG all that money) and private individuals, is absolutely ex post facto lawmaking and is not only tantamount to a bill of attainder but is a bill of attainder if the term is at all meaningful. The US Constitution specifically meant to keep Congress from passing laws to punish acts that weren't illegal when taken, and taking a bunch of someone's money is a punishment. The Constitution doesn't say anything about the prohibition against ex post facto lawmaking only applies to "criminal" law and doesn't say, "You can't put someone in jail retroactively, but take their shit all you want."

And the idea that a bill of attainder -- meaning a bill that essentially convicts and punishes someone without trial -- is only a bill of attainder if it applies to a small group is nonsense. Attaining everyone doesn't make it any less a bill of attainder. And bills of attainder were specifically a way of taking someone's property without them having been convicted of anything, which is what this "tax" is.

I understand the legal arguments by which a "tax" isn't a punishment, and so doesn't invoke ex post facto, and that a bill of attainder has to be more narrow than all these people who got these bonuses. But those arguments are just a way of weasling around the prohibitions that the Constitution plainly puts in force. They aren't good faith arguments; they are arguments for allowing the government to get away with something it isn't supposed to get away with.

The fact that these bonuses are unjust doesn't make them illegal, and if they aren't illegal, the government has no business trying to take them away. Do we really want a society where if there's enough furor over the money you have earned (yes, "earned" in the loosest possible sense here, but still), the government can become the tool of the mob and take your money or property away? Because that's a power that won't always be used justly, trust me. Just look at the injustices we've seen in the use of eminent domain.