| The bill to tax AIG and other bonus money at 90% is unconstitutional. |
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The bill to tax AIG and other bonus money at 90% is unconstitutional.
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Asked 3 years ago
by plawler  United States |
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About
According to BlackOrchid, I am never wrong!
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10 Points
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To which portion of Art. I, § 9 are you referring?
I'm assuming probably paragraph 3 (ex post facto and bill of attainder). [Maybe paragraph 4 (dealing with taxing), but that was cleared up by Amendment 16.]
I have not read the text of any bill in progress dealing with AIG, if text exists yet, so I am also assuming that it is merely a tax on bonuses or other large payouts, such as golden parachutes. If this is not the case, feel free to correct.
Given those assumptions, look first at ex post facto laws. The general idea is that Congress cannot pass laws that punish things after the fact. The specifics, as noted in Calder v Bull (3 US 386 [1798]), in the opinion of Justice Chase, are that to be considered an ex post facto law, it must meet the following criteria:
"1st. Every law that makes an action done before the passing of the law, and which was innocent when done, criminal; and punishes such action. 2d. Every law that aggravates a crime, or makes it greater than it was, when committed. 3d. Every law that changes the punishment, and inflicts a greater punishment, than the law annexed to the crime, when committed. 4th. Every law that alters the legal rules of evidence, and receives less, or different, testimony, than the law required at the time of the commission of the offense, in order to convict the offender."
Therefore it seems (to me) to need to be a criminal action to be considered ex post facto. I'm not sure how I feel about the possibility of civil (or otherwise non-criminal) ex post facto laws, if such possibility does exist as I have understood it, but there you go.
As for bills of Attainder, the general idea being that a law cannot single out a particular group for punishment.. I can see a problem with the AIG tax bill here. But I don't know the controlling cases involved, so I'm not sure how this has developed over time.
If I have to guess, and I do, I don't see why this couldn't be worked around just like with different tax brackets for individuals with different income, especially if it is written as a regulation for the IRS to enact.
I can see how there might be room to challenge that idea - either because this group is specific and not a general group based on demographics, or because this is clearly punitive in nature and not a general tax regulation - but that's my rough guess.
I am on the fence about the issue. They don't deserve the money, surely, but their contracts gave it to them. The government should have nullified all pre-existing contracts (or at least the excessive portions) when they took over AIG. I don't see how businesses can change EXTERNAL terms of service, etc., so long as they provide notice, after a contract has been agreed to. And somehow an 80% stakeholder in a private company cannot cancel INTERNAL contracts written under the old management. I'm clearly not a lawyer, but the common sense of it is not clear to me.
Sorry for the long reply, I guess it was up my alley..
Very good analysis. To my mind this is an ex post facto bill of attainder, and I don't think it could possibly survive a SC challenge.
I think it might be able to pass such a test, for reasons already noted, but that's just my read on it.
A better indication of how it would/will fare in such a case will, I think, be shown in the amount of support it receives in Congress. If it is a close vote, and should it reach the SCOTUS, it could go either way. If it is a landslide in Congress, I think the court(s) will be less likely to want to rule on it.
It won't pass. The problem is that what they did was legal. They got away with it. Nothing can be done at this time.
HOWEVER, there's nothing wrong with looking into the bonus receivers' backgrounds to see if they had any part of the (I believe) obvious fraud that took place in the re-packaging of the securities they offered that led to the need for the bail out. If it can be proven, in a court of law, that they had anything to do with any of the fraud that took place - then jail time and all assets (including those delightful bonuses, their homes, IRAs, 401ks etc.) should be seized as benefits gained as a direct result of perpetrating a crime.
omg...our congress pass an unconstitutional law? Perish the THOUGHT!
Actually giving AIG "bail out money" is unconstitutional, so when unconstitutional money is taxed that is probably unconstitutional as well but who cares. The money should have never been given out in the first place.
We may agree that the money shouldn't have been given in the first place, though perhaps using different reasoning. That aside, what is your reasoning that it (bailout money) is unconstitutional?
I must point out that I am not a constitutional scholar, but I don't recall where the constitution allows the government to give tax money to private industry. I know they do it, but I don't know where in the constitution it gives them this power.
Nor am I. That aside, I don't know where it says that Congress cannot do so.
Art. I, § 9, paragraph 7, states (in its entirety):
"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."
They passed a law to spend the bailout money, I'm not sure why it would be unconstitutional.
[Just to note, I only asked why you think it is unconstitutional for discussion's sake. I do not claim that my reasoning is not without fault, nor legally correct. Cheers.]
Ok, personally speaking, to answer your question as best as I can. I feel that the government often oversteps its bounds. It does so constantly and is rarely challenged in a meaningful way. So just because they passed a law to give AIG money, does not make it "right".
I feel that it is unconstitutional on the grounds that the government was granted no constitutional provisions for giving away money. The taxes taken in are supposed to go for running the government, supporting the military, and public works (such as road, bridges and the like).
I am not completely alone in my thinking that giving money away is unconstitutional, Im sure everyone has their reasons but here is another, more legally inspired reason. http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=106x33119
I think we agree that the national government oversteps its bounds more than it should. I think we also agree that there usually does not seem to be any meaningful challenge.
We may even be in agreement that they OUGHT not to have given AIG (as well as other companies) money. But OUGHT and CAN are two different things. To be fair, the government did not "give away money" to AIG. It bought a large portion of it. I wish they would use that controlling stake to our benefit rather than worry about passing laws, but that is tangential. I do not see this as an unconstitutional situation. Unsavory, yes.
Regarding the linked discussion, it was an interesting read, but I was left unsure how exactly the author thought that bailouts were unconstitutional. As best as I can tell, the writer believes that bailing out corporations is unconstitutional because the constitution (and other documents of its time) were written with the idea of favoring individuals over corporations. Perhaps that is so, but he does not give any support for that claim.
Furthermore, if it is indeed the case that the constitution does favor individuals over corporate entities, I think it could be argued that the various bailout moneys were spent/loaned with the express intent to buoy the economy. Now we can argue whether we think the bailouts will help or hurt us, but I feel that making that claim - that the bailouts were for the good of the economy, i.e. the good of all - it would clear the hurdles set up by the writer of the text provided via your link. But those are just my thoughts on the matter, nothing more.
One small monkey in the wrench. The "government" didn't give the money for the bailout. The Federal Reserve did. They printed $800B and are handing it out.
Now, this SOUNDS like the US Government, but the Federal Reserve is a PRIVATELY HELD corporation. ( http://www.globalresearch.ca/index.php?context=va&aid=8518 )
The Federal Reserve manufacturers US currency (it costs them $.015 to manufacture a quarter) and charge our banks for it (they charge our banks $.25 for a quarter) and then keep the $.235 cents as profit.
What the REAL $50B question is ... is who actually owns the 80% of AIG? Everybody keeps saying it's the government - but it WASN'T our tax dollars that is going for the bail out. It's newly printed money given by the Federal Reserve who will then take the money back as AIG pays back the loans. That's what I learned on 60 Minutes last Sunday.
I certainly hope, for inflationary's sake, they plan on burning the money as it comes back in. An extra trillion out there floating around is bound to make a whole lot of people greedy, and prices will go up all over the place.
Now, now, silly...
1. That doesn't change the argument. jondough said it was unconstitutional for congress to give anyone money. That's untrue.
2. Pray tell who gave the Federal Reserve (which I agree is about as federal as Federal Express) the right to give out money? Now if you want to say that giving away that power was unconstitutional, you'll get no argument from me. ;o)
3. Who says any of that money will ever come back in?
4. What value? It's just fiat currency after all.
Why would the Congress allowing/instructing the reserve to (do anything really, but specifically) give out money be unconstitutional?
Art. I, § 8, para. 5, gives Congress the power to, "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"
So unless you are taking that to mean that money must be printed/minted in the Capitol, by Congress itself, delegation does not seem to be an unlawful exercise. Unless the reserve just went out, printed money, and gave it away on its own accord, I don't see the issue.
Because the control of the money resides with the congress. They can, of course, contract out the printing/minting of money. But I don't think the Constitution gives them the right to give the control and supply of money (specifically M1) over to a private entity which does not answer to the Congress. The Constitution specifically does NOT allow for a U.S. central bank, which is what the de facto position of the FR is.
Yeah, except he just quoted to you the section of the Constitution where it DOES grant constitutional provisions for giving away money. It says the congress can draw money from the treasury for "Appropriations made by Law." You may not personally like the law, but that does not make it unconstitutional.
You're smart for a hobo.
I've got time to read.
I'll put a dollar in your cup if you promise to spend it on bus fare to the library ...
(lolol)
You and I both know what I will be using that $1 for, and it has nothing to do with transportation.
Who cares?! So you're saying that two wrongs make a right? That we should create an ex post facto bill of attainder (clearly unconstitutional) because Congress did something you "feel" is unconstitutional.
What, pray tell, happened to your conservative "strict constructionist" viewpoint?