Yesterday, the U.S. House of Representatives voted to tax bonus payments of companies who have been given more than $5 Billion in government handouts. So, what's the problem with that? Companies shouldn't be profiting on a taxpayer subsidy. That sounds fair, right? It seems outrageous that a company would accept taxpayer money, and then its upper most echelon line its pockets with the money. I certainly agree it's outrageous. Think of college students (myself included) who's families would like to support them in further scholastic achievement by financing their continued education who cannot because the income which would go to such worthwhile causes is siphoned off by local, state, & federal taxes & fees. Then we see our hard earned money go towards some group of corporate fat-cats who had enough money to buy off a few influential government officials. Think I'm making this up? I don't hold John Stewart as having any debatable serious reporting or commentary stature, but check out 2:58-8:44 of his March 19th show. It's, I believe, fairly accurate and entertaining at the same time.
Honestly, what did you (and I'm talking to all of you who supported TARP & the bailouts specifically) think was going to happen? It was such an emergency that the stimulus spending package be passed in such a short time that no one could read the bill. The very idea that such actions would lead to anything other than corruption is absurd; and in my opinion in this particular legislation, intentional. The whole idea that you tax the citizens to give to entities which don't function in a prosperous manner is inherently backwards. This is the same thing as if AIG, GM, Chrysler, and all the rest who got their hands on tax payer dollars broke into everyone's home and stole what they wanted. (See my comments on mortgages on the force of government for a little more lengthy discussion on this idea.) There is a reason why we didn't buy their services/products to begin with. Let's maybe look at this a different way. I'm a typical person who is watching his money and trying to make it though the recession with as little effect to my finances. Does it make sense to take out a loan to buy a car from GM or Chrysler or possibly go out and give money to AIG out of my finances which, if you are following your grandmother's advice to not spend what you don't have, doesn't exist. That's essentially what the government has done. Ask yourself, does it make sense? Would you do it with your own finances? And just for those of you who think all of this money is coming from the rich, The bailout has increased the U.S. debt limit by $700 Billion. It's not coming from the rich, its coming from our creditors. I don't know about you, but I'd like not to owe China anything let alone make our children beholden to them.
Now as bad as this is, lets put this into perspective. AIG was given $182.5 billion. AIG's people got $165 million in bonuses.
$182,500,000,000
vs.
$165,000,000
vs.
$165,000,000
Of 182.5 B, $165 M is .09%. Pretty astounding how much difference a few decimal places makes. This means that if someone gave you $100, you would keep ¢9 (that's $0.09) to keep the same percentage. So go ahead, be outraged about the 165 million dollars. Go ahead, be worried about the pennies. Don't think to ask where the rest of it went. I'm sure it doesn't matter.
Now, back to the taxing of the bonuses. As reprehensible as the bonuses are, I cannot see justice being done by taxing the bonuses. There are constitutional issues with taxing the bonuses. Some say there isn't, but I think they might be wrong in some cases.
Here are the general provisions which some say are in contests with taxing the bailouted thieves' bonuses: Bills of Attainder, Ex Post Facto, Contract Clause, & the Fifth Amendment.
I think there may be some validity to the arguments in the above referenced piece in regards to the Contract Clause and the Fifth Amendment; however, I believe the Ex Post Facto & Bills of Attainder provisions in the Article I, Section 9 of the Constitution are clearly in contrast to this type of taxation.
Bills of attainder: Congress is singling out these people. Writing the bills in a broad sense may be a technical way around it, but the problems I see in it is that 1.) it may not be broad enough to pass a challenge in court; 2.) it makes the tax code that much more complicated; & most importantly 3.) the purpose is still the same. Lets say I want something my neighbor has. This thing is really cool, and I don't think he should have it for himself. Even though my representative sympathizes with my plight, he can't do anything because of the prevention of bills of attainder which wouldn't allow him to pass a law singling out the specific neighbor who has that really cool gizmo. Well, my neighbor doesn't have the same street address as I do; what if we write the law that says everyone who has a street address which ends in odd numbers (encompassing the neighbor's address and excluding my own) will be taxed at the cost of the really cool gizmo and such funds be directed to addresses ending in even numbers. Problem solved. Just because this law may be very broad natured, it doesn't remove the fact that I want a bill of attainder passed against my neighbor. Bills of attainder, regardless of how broad, exist as entities of purpose and not domain.
Ex Post Facto: This provision of the Constitution has been debated from the 1700's. The primary area of debate is whether the Ex Post Facto Clause applies to civil law in addition to criminal law. Everyone is familiar with the idea of criminal ex post facto. No one should fear drinking from a clear glass because if drinking from clear glasses were to be outlawed, no one would be subject to the penalties during the time previous to the passage of the laws when such activities were not subject to lawful penalty. No one disputes this, but what if legislatures are allowed to injure its population by passing laws to architect its will when such actions are contrary to agreements between two people? There would be no way to conduct business in any manner which derived it's intention from any expectation of the ability to be free from interference from a legislative body. In such a situation, no agreement can be binding. The Cato Journal has a very in depth piece on the civil application of the Ex Post Facto Clause in which quotes, as I do now, Federalist Paper 44 by James Madison.
Bills of attainder, ex-post-facto laws, and laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. The two former are expressly prohibited by the declarations prefixed to some of the State constitutions, and all of them are prohibited by the spirit and scope of these fundamental charters. Our own experience has taught us, nevertheless, that additional fences against these dangers ought not to be omitted. Very properly, therefore, have the convention added this constitutional bulwark in favor of personal security and private rights; and I am much deceived if they have not, in so doing, as faithfully consulted the genuine sentiments as the undoubted interests of their constituents. The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and lessinformed part of the community. They have seen, too, that one legislative interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding. They very rightly infer, therefore, that some thorough reform is wanting, which will banish speculations on public measures, inspire a general prudence and industry, and give a regular course to the business of society.
The single problem with all of these issues in the replacement of the spirit & word of the law with the word of the law. The only way one can ignore the laws as they are intended is if they construe the wording to mean what is popular at the moment for the will of those who dismiss the purpose and distort the language of the law. This is why when people quote the Constitution or the law without addressing the Constitution or law's purpose, they do it often with the intention to dilute its meaning. When we hear people speak about the Constitution, how often do we hear the same people quoting the Federalist or Anti-federalist Papers or other documents discussing the purposes of the laws about which they speak? We must be very careful not to accept the law but deny its purpose. I have for some time now argued for a simplification of laws particularly with the tax code, but it is for the same reason as I am arguing now that people should be aware of the purposes for which laws are written. Many of today's problems are those which originate at the contortion of the Constitution and at the abandonment of the purposes of its clauses. This is not to say that the language is irrelevant, but a partner to the law's purpose. The wording of laws originate only from the meaning behind them; and without the meaning from which words are used to construct our laws, they have no purpose. The rule of law can only exist within the continuity of the purpose & language of the law; without which leaves little room to be filled with anything else but the rule of man. It seems that James Madison saw more purpose in the Ex Post Facto Clause than just a criminal application. Funny I don't hear much about Mr. Madison's views on this when someone wants to tax someone else at 90%; and if the government can do it to the people at AIG, who can't they do it to?
Really agree with what you read? Really disagree? Somewhere in the middle?....Let yourself be heard in the comments!
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