Attainder!

First, some Constitutional vocabulary.

A “bill of attainder” is a law that punishes specific individuals without benefit of trial.

A “taking” is when the government takes something from you without “due process of law,” which usually means either giving you a hearing or an opportunity to consent.

An “ex post facto” law is one which punishes someone for conduct which, at the time it was committed, was not illegal — it criminalizes something retroactively.

The Constitution of the United States prohibits bills of attainder and ex post facto laws.

Taxes are not considered “takings” because by electing representatives to Congress who act on our behalf and impose taxes, citizens are deemed to have consented to the taxes.

Second, the news. Congress has imposed a 90% tax on all bonuses over $250,000 paid to individuals employed by companies receiving federal bailout money. It could not be more obvious that the tax is aimed specifically at AIG executives who are, so far as I know, citizens of the United States of America.

Those executives have done nothing wrong. They would be willing to pay regular income tax on this income. But functionally all of their money is being taken from them, without benefit of a trial or a hearing, under the guise of a tax.

Add my voice to the growing chorus that thinks this is a bill of attainder and not a constitutional taxation. It punishes these people for accepting compensation for which they bargained, which was part of their employment contracts, and which was authorized and not altered by the laws bailing out their employers.

The new tax law is a crass, craven, and unconstitutional taking of something that belongs to private people. It is an effort by Congress to provide political cover for its own members, and members of the incumbent Administration, who are complicit in authorizing those bonuses which have proven so politically unpopular (despite their exceedingly small size as compared to the AIG bailout).

Yes, yes, I understand perfectly well that the bonuses appear to be the government directly rewarding incompetent management by these same executives, people whose past mistakes raise serious questions about whether they get to keep their jobs. But the government, now the majority stockholder of the company, couldn’t find the stones to fire and replace them. So they remain running the show at AIG. And the political priority is not reforming the way AIG does business by changing the management team, but rather to mollify a public outraged by the way 0.1% of their money is being spent.

The real blame for the bonuses rests not with the executives at AIG. It rests with the hurried, slapdash efforts of Congress and two White House administrations to literally throw money at a problem in the financial services industry. It is an example of why the government ought not to be in the business of running a massive insurance company — it’s not very good at this sort of thing.

Burt Likko

Pseudonymous Portlander. Homebrewer. Atheist. Recovering litigator. Recovering Republican. Recovering Catholic. Recovering divorcé. Recovering Former Editor-in-Chief of Ordinary Times. House Likko's Words: Scite Verum. Colite Iusticia. Vivere Con Gaudium.