Comments on: Is Congress’ Plan to Retroactively Tax AIG Bonuses Constitutional?

By: Adam

Adam — Mon, 19 Jul 2010 04:39:14 +0000

When all else fails, argue a deprivation of substantive (or procedural, as the case may be) due process rights under 42 U.S.C. 1983.

By: Obama’s Promise To “Fundamentally Change The United States” One Year Later | Full Circle Thinker

Thu, 03 Dec 2009 20:05:54 +0000

[...] ( http://blog.pappastax.com/index.php/2009/03/17/is-congress-plan-to-retroactively-tax-aig-bonuses-con...) [...]

By: Peter

Peter — Fri, 20 Mar 2009 19:50:45 +0000

Peter,

Thanks for your wise comments. Good points, all.

My only thought is that even though a tax is generally not a punishment, the rhetoric Congressmen have been using smacks of punishment.

They are angry and looking for scapegoat and have found them in the AIG execs.

By: Peter MacSweeney

Peter MacSweeney — Fri, 20 Mar 2009 17:00:40 +0000

The Supreme Court nearly always rejects tax related constitutional questions. They view Congresses power to tax as a virtual holy grail. They do not view tax as punishment or retribution. Therefore they wont view the tax as punishment, therefore not a constitutional question.

They also wont address the fact the some people will be effected differently depending on their state. If in New York, you may end up OWING money after the bonus is recalled. Regardless that wont be considered discrimination.

I think they certainly need to hear a challenge, and hope they are very careful in their response. Congress can not be so knee jerk. Its what caused Patriot Act problems, the original Bailout problems, and now this.

By: Daniel Encarnacion

Daniel Encarnacion — Fri, 20 Mar 2009 02:05:11 +0000

I believe it would be unconstitutional, but believe the Supreme Court might have a different interpretation. In 1994, they upheld the legality of Bill Clinton’s retroactive tax increase. They have narrowed the application of ex post facto to criminal law only.

The bill of attainder argument is the only one with some possible merit now. Since they made this tax rate applicable to any company who receives bailout money, that may be broad enough to escape a constitutional issue.

By: Harvard Law Professor, Lawrence Tribe, On the Legality of Taxation of AIG Bonuses

Thu, 19 Mar 2009 12:18:22 +0000

[...] Post Fact Laws – I admit I am not in Mr. Tribe’s constitutional law league, but I wonder, as I have suggested in previous blog posts, whether the rhetoric Congressmen are now using effectively converts what, under other [...]