w00t, House passes bill that taxes AIG bonuses at 90%!!!

[Phokus]

Finally congress gets something right, there should be no reward for bad behavior.

quote:

WASHINGTON - The Democratic-led House overwhelmingly approved a bill on Thursday to slap punishing taxes on big employee bonuses from AIG and other firms bailed out by taxpayers.

The vote was 328-93.

"We want our money back and we want our money back now for the taxpayers," said House Speaker Nancy Pelosi, D-Calif.

The bonuses, totaling $165 million, were paid to employees of troubled insurer American International Group, including to traders in the unit that nearly brought about the company's collapse.

In all, 243 Democrats and 85 Republicans voted "yes" on the bill. It was opposed by six Democrats and 87 Republicans.

The margin of victory came despite sharp Republican attacks calling the legislation a legally questionable ploy to paper over Obama administration missteps.

Minority Leader John Boehner, R-Ohio, said the bill was "a political circus" diverting attention from why the administration hadn't done more to block the bonuses before they were paid.

However, although a number of Republicans cast "no" votes against the measure at first, there was a heavy GOP migration to the "yes" side in the closing moments.

The bill levies a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.

"We figured that the local and state governments would take care of the other 10 percent," said Charles Rangel, D-N.Y.

Rangel said the bill would apply to mortgage giants Fannie Mae and Freddie Mac, among others, while excluding community banks and other smaller companies that have received less bailout money.

A tax expert said there is plenty of precedent for levying punitive taxes on behavior that lawmakers find objectionable. Robert Willens, a corporate tax lawyer in New York, cited the steep excise taxes levied on money paid to firms to keep them from launching hostile takeover bids, known as "greenmail."

"You can write very narrowly tailored laws," Willens said. "And they can do it for bonuses already paid" ...

http://www.msnbc.msn.com/id/29771499/

 

[waggy]

pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

 

[MovingTarget]

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

How is this unconstitutional?

 

[sactoking]

Article 1, Section 9: "No bill of attainder or ex post facto Law shall be passed. "

 

[Phokus]

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

please explain, the contracts are being honored

 

[Linflas]

Originally posted by: MovingTarget

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

How is this unconstitutional?

U.S. Constitution - Article 1 Section 9

No Bill of Attainder or ex post facto Law shall be passed.

In the context of the Constitution, a Bill of Attainder is meant to mean a bill that has a negative effect on a single person or group (for example, a fine or term of imprisonment). Originally, a Bill of Attainder sentenced an individual to death, though this detail is no longer required to have an enactment be ruled a Bill of Attainder.

In U.S. Constitutional Law, the definition of what is ex post facto is more limited. The first definition of what exactly constitutes an ex post facto law is found in Calder v Bull (3 US 386 [1798]), in the opinion of Justice Chase:

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.

 

[aphex]

Originally posted by: sactoking
Article 1, Section 9: "No bill of attainder or ex post facto Law shall be passed. "

If it applies for this tax year I think its fine as long as it only encompasses bonuses paid out from Jan 1st, 2009 on.

 

[Atomic Playboy]

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

What a pity that Americans have absolutely no idea what's in the Constitution. There's absolutely nothing in there about corporations, and the only language about contracts is not even remotely applicable. The Constitution does give Congress the right to collect taxes, including income tax. So maybe you could enlighten us on what exactly is unConstitutional here?

-EDIT- OK, other people have addressed this, so I'll respond to their claims. Every definition of ex post facto law seems to be addressing criminal punishments, not the US tax code, so I don't think it qualifies. As long as the tax is distributed equally, you can't claim that it is an unfair fine on a specific individual or group of individuals.

 

[waggy]

Originally posted by: Atomic Playboy

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

What a pity that Americans have absolutely no idea what's in the Constitution. There's absolutely nothing in there about corporations, and the only language about contracts is not even remotely applicable. The Constitution does give Congress the right to collect taxes, including income tax. So maybe you could enlighten us on what exactly is unConstitutional here?

its been p ointed out. pity you are one that has no diea what's int he constitution.



again congress rushes in to pass laws without thinking of the fallout. teh lawsuits that will come from this should be amuseing to watch (pity tax payers are going to pay for it)

 

[MovingTarget]

Originally posted by: Linflas

Originally posted by: MovingTarget

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

How is this unconstitutional?

U.S. Constitution - Article 1 Section 9

No Bill of Attainder or ex post facto Law shall be passed.

In the context of the Constitution, a Bill of Attainder is meant to mean a bill that has a negative effect on a single person or group (for example, a fine or term of imprisonment). Originally, a Bill of Attainder sentenced an individual to death, though this detail is no longer required to have an enactment be ruled a Bill of Attainder.

In U.S. Constitutional Law, the definition of what is ex post facto is more limited. The first definition of what exactly constitutes an ex post facto law is found in Calder v Bull (3 US 386 [1798]), in the opinion of Justice Chase:

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.

It isn't making anything criminal though, and not specifically those from AIG. In that case, progressive tax brackets would be unconstitutional as it affects people who make more $$ disproportionately.

As far as ex post facto goes, many other tax bills have been passed affecting future returns for the year in which they are passed. Common practice...

 

[nageov3t]

.

 

[BrunoPuntzJones]

Hopefully this goes to court and gets thrown out.

Doesn't matter if they are a bunch of frauds. They should have written the law better the first time around.

 

[Pneumothorax]

As much as I love to see these bastards get robbed, it still worries what these few greedy individuals have allowed the government to do. It sets a precedence for future potential abuse by the government when it comes to taxes. These AIG fools should've tore up the checks over the weekend to prevent this scenario from happening.

 

[sactoking]

Originally posted by: aphex

Originally posted by: sactoking
Article 1, Section 9: "No bill of attainder or ex post facto Law shall be passed. "

If it applies for this tax year I think its fine as long as it only encompasses bonuses paid out from Jan 1st, 2009 on.

I believe (notice, this is an opinion) that IF the bill of attainder language or ex post facto language apply to taxes, then this tax in unconstitutional, at least applied to AIG, since it was passed after the action took place. It still may be constitutional for payments going forward.

I am no constitutional law scholar, so I won't even attempt to offer an opinion on if bill of attainder or ex post facto provisions apply to taxes.

I have offered up the argument that will be made and make no representations to the validity of the argument other than the one made above.

 

[Craig234]

Originally posted by: waggy

Originally posted by: Atomic Playboy

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

What a pity that Americans have absolutely no idea what's in the Constitution. There's absolutely nothing in there about corporations, and the only language about contracts is not even remotely applicable. The Constitution does give Congress the right to collect taxes, including income tax. So maybe you could enlighten us on what exactly is unConstitutional here?

its been p ointed out. pity you are one that has no diea what's int he constitution.



again congress rushes in to pass laws without thinking of the fallout. teh lawsuits that will come from this should be amuseing to watch (pity tax payers are going to pay for it)

You should learn that to argue your point, you should provide supporting evidence. What's the basis for your assertion that this is unconstitutional?

You do understand that the constitution was amended a century back to allow for the income tax?

 

[BrunoPuntzJones]

Originally posted by: MovingTarget


It isn't making anything criminal though, and not specifically those from AIG. In that case, progressive tax brackets would be unconstitutional as it affects people who make more $$ disproportionately.

As far as ex post facto goes, many other tax bills have been passed affecting future returns for the year in which they are passed. Common practice...

Has there been one that singles out a specific group and penalizes them for something done legally before the date of passing?

 

[Red Dawn]

Originally posted by: loki8481sucks a little that it's affecting the rank and file as well as the executives.

my coworker's wife works for AIG and has been there for 2 years. originally, she was supposed to get a 10K raise to compensate for several promotions that she didn't receive raises for. said bonus was cut to $400, and now it's going to be taxed 90%? lol

She should be happy she still has a place to work.

 

[Possessed Freak]

The precedent is mind numbing. Imagine... suddenly the government doesn't like that people are spending their $500 stimulus and now tax that at 90%. Wha wha wha...?

 

[sciwizam]

Link of the actual text of the bill

About a page length.

To impose an additional tax on bonuses received from certain TARP
recipients.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. BONUSES RECEIVED FROM CERTAIN TARP RECIPIENTS.

(a) In General.--In the case of an employee or former employee of a
covered TARP recipient, the tax imposed by chapter 1 of the Internal
Revenue Code of 1986 for any taxable year shall not be less than the
sum of--
(1) the tax that would be determined under such chapter if
the taxable income of the taxpayer for such taxable year were
reduced (but not below zero) by the TARP bonus received by the
taxpayer during such taxable year, plus
(2) 90 percent of the TARP bonus received by the taxpayer
during such taxable year.
(b) TARP Bonus.--For purposes of this section--
(1) In general.--The term ``TARP bonus'' means, with
respect to any individual for any taxable year, the lesser of--
(A) the aggregate disqualified bonus payments
received from covered TARP recipients during such
taxable year, or
(B) the excess of--
(i) the adjusted gross income of the
taxpayer for such taxable year, over
(ii) $250,000 ($125,000 in the case of a
married individual filing a separate return).
(2) Disqualified bonus payment.--
(A) In general.--The term ``disqualified bonus
payment'' means any retention payment, incentive
payment, or other bonus which is in addition to any
amount payable to such individual for service performed
by such individual at a regular hourly, daily, weekly,
monthly, or similar periodic rate.
(B) Exceptions.--Such term shall not include
commissions, welfare or fringe benefits, or expense
reimbursements.
(C) Waiver or return of payments.--Such term shall
not include any amount if the employee irrevocably
waives the employee's entitlement to such payment, or
the employee returns such payment to the employer,
before the close of the taxable year in which such
payment is due. The preceding sentence shall not apply
if the employee receives any benefit from the employer
in connection with the waiver or return of such
payment.
(3) Reimbursement of tax treated as tarp bonus.--Any
reimbursement by a covered TARP recipient of the tax imposed
under subsection (a) shall be treated as a disqualified bonus
payment to the taxpayer liable for such tax.
(c) Covered TARP Recipient.--For purposes of this section--
(1) In general.--The term ``covered TARP recipient''
means--
(A) any person who receives after December 31,
2007, capital infusions under the Emergency Economic
Stabilization Act of 2008 which, in the aggregate,
exceed $5,000,000,000,
(B) the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation,
(C) any person who is a member of the same
affiliated group (as defined in section 1504 of the
Internal Revenue Code of 1986, determined without
regard to paragraphs (2) and (3) of subsection (b)) as
a person described in subparagraph (A) or (B), and
(D) any partnership if more than 50 percent of the
capital or profits interests of such partnership are
owned directly or indirectly by one or more persons
described in subparagraph (A), (B), or (C).
(2) Exception for tarp recipients who repay assistance.--A
person shall be treated as described in paragraph (1)(A) for
any period only if--
(A) the excess of the aggregate amount of capital
infusions described in paragraph (1)(A) with respect to
such person over the amounts repaid by such person to
the Federal Government with respect to such capital
infusions, exceeds
(B) $5,000,000,000.
(d) Other Definitions.--Terms used in this section which are also
used in the Internal Revenue Code of 1986 shall have the same meaning
when used in this section as when used in such Code.
(e) Coordination With Internal Revenue Code of 1986.--Any increase
in the tax imposed under chapter 1 of the Internal Revenue Code of 1986
by reason of subsection (a) shall not be treated as a tax imposed by
such chapter for purposes of determining the amount of any credit under
such chapter or for purposes of section 55 of such Code.
(f) Regulations.--The Secretary of the Treasury, or the Secretary's
delegate, shall prescribe such regulations or other guidance as may be
necessary or appropriate to carry out the purposes of this section.
(g) Effective Date.--This section shall apply to disqualified bonus
payments received after December 31, 2008, in taxable years ending
after such date.
<all>

 

[waggy]

Originally posted by: Craig234

Originally posted by: waggy

Originally posted by: Atomic Playboy

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

What a pity that Americans have absolutely no idea what's in the Constitution. There's absolutely nothing in there about corporations, and the only language about contracts is not even remotely applicable. The Constitution does give Congress the right to collect taxes, including income tax. So maybe you could enlighten us on what exactly is unConstitutional here?

its been p ointed out. pity you are one that has no diea what's int he constitution.



again congress rushes in to pass laws without thinking of the fallout. teh lawsuits that will come from this should be amuseing to watch (pity tax payers are going to pay for it)

You should learn that to argue your point, you should provide supporting evidence. What's the basis for your assertion that this is unconstitutional?

You do understand that the constitution was amended a century back to allow for the income tax?

it has been posted why many say its unconstitutional. read the thread.

 

[gallivanter]

If the litigants were to succeed, assuming the receivers do litigate, I would envision it being on equal protection grounds.

 

[dullard]

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.

Every year congress passes tax changes. These tax changes usually occur AFTER you got paid at least partially for that year. For example, it is common for tax changes to pass in the October time frame - after your January to September paychecks are in. This happens year after year after year. Why didn't I see all the complaints then?

 

[Atomic Playboy]

Originally posted by: waggy

Originally posted by: Atomic Playboy

Originally posted by: waggy
pity that the goverment is willing to trash the constitution.


while i am upset they are getting bonuses what the govermetn is doing is far worse. all it is going to do is lead to lawsuits and such.

What a pity that Americans have absolutely no idea what's in the Constitution. There's absolutely nothing in there about corporations, and the only language about contracts is not even remotely applicable. The Constitution does give Congress the right to collect taxes, including income tax. So maybe you could enlighten us on what exactly is unConstitutional here?

its been p ointed out. pity you are one that has no diea what's int he constitution.



again congress rushes in to pass laws without thinking of the fallout. teh lawsuits that will come from this should be amuseing to watch (pity tax payers are going to pay for it)

When I made my post, no one had posted a Constitutional challenge beyond you simply declaring it unConstitutional with no corroborating evidence. I have since updated my post, but I'll post the update here in response to you:

Every definition of ex post facto law seems to be addressing criminal punishments, not the US tax code, so I don't think it qualifies. As long as the tax is distributed equally, you can't claim that it is an unfair fine on a specific individual or group of individuals. Now that the actual text of the bill is before us, it does not specifically target AIG employees, but rather anyone who receives a bonus of over $250,000.00 while working for a firm that received TARP money. Thus, it is not solely punitive on AIG, but on any company who chooses to use TARP money to pay executive bonuses. It just so happens that AIG is the only company it appears to affect right now.

 

[tk149]

I think the bailout and bonuses thing is terrible, but I find two things especially troubling:

1. that Congress (or at least the House) has no qualms about targeting a specific, tiny portion of the population and saying FVCK YOU.

2. that Congress can tax anything at 90%.

Either of those powers can be abused to infinity and beyond...and they will be.

 

[sactoking]

What's troubling about the legislation is that according to the Wall Street Journal, 470 companies have received TARP funds. Of those TEN will be affected by this bill. It will be hard for the government to defend that as anything but being vindictive.