Article I, Section 9, Clause 3 of the Constitution of the United States may very well be on the chopping block. Yesterday, the House of Representatives voted to impose a 90% tax on the bonuses given out to AIG employees.
Now, the bonuses are not at issue here. Whether they are right or wrong, good or bad is immaterial to what is really going on.
The House passed a bill that is specifically forbidden by Article I, Section 9, Clause 3. “No Bill of Attainder or Ex Post Facto Law shall be passed.” You can pick either one of those and it would cover this 90% bonus tax.
First, a Bill of Attainder, in the context of the Constitution, means a bill that has a negative effect on a single person or group. A punitive tax that specifically targets a certain group (i.e. those who were to receive these bonuses) certainly falls under the definition here. That makes this tax unconstitutional.
Second, when Congress passed the stimulus package and Barack Obama put the Presidential signature on that bill, it became the law of the land. Part of that law is an amendment put in by Sen. Chris Dodd (D-CT) that specifically exempted these bonuses from any regulation. Now, Congress is seeking to implement a law that puts such regulation in place and they want to enforce this law retroactively. That is known as an Ex Post Facto law.
Either way you look at it, this 90% tax Congress wants to retroactively impose on bonus payments that had previously been made perfectly legal by Congress and the President, is wholly, completely and absolutely unconstitutional.
If this bill becomes law and is not struck down by the Supreme Court, then it sets a precedent that Congress can legislate retroactive laws and put through Bills of Attainder. For example, if Congress decided that they wanted to raise the income tax rate for 2007 to 50% and collect back taxes from everyone, they can point to this piece of legislation and say that they now have the power to do so and there will be nothing we can do to stop it.
I recommend that you send emails or make phone calls to your Senators and ask them to vote “nay” on this bill and to restore the integrity of the Constitution of the United States.
Looks like the Wall Street Journal agrees with me:
A Smoot-Hawley Moment?
Wall Street Journal Review & Outlook
March 23, 2009