WTF? Populist rage is great and all but we really cannot levy a special tax on AIG bonuses

Apparently a bill passed the house putting a 60% tax surcharge on AIG bonuses and Reid says the Senate is on board.

This kind of nonsense should upset people in the same way illegal wire-tapping upsets people.

This is basic stuff about of form of government. No ex post facto law, no bills of attainder, no taint of blood, no double-jeopardy...

It's a philosophical concept of a government that does not write special laws to get some guy or criminalize prior legal action or generally act like Judge Judy.

We got burned. It's a learning experience. Anyone who wants to pass laws to prevent a recurrence, by all means.

But we really cannot (meaning should not if we want to remain a free country) pass ad hoc laws intended to achieve perceived equity extra-judicially.

That's what the Terry Shiavo case was about... (and Elian Gonzales and Freedom Fries and so on.)

Just because some story is on TV and people are upset (quite justly upset) doesn't mean Congress should start passing grand-standing extra-constitutional bullshit.

It is easy to imagine a Congress that did things like outlawing having more than seven babies at a time, retroactive to one year ago, because people were upset about octo-mom.

Or laws like a 90% surcharge tax on purchases over 1 million dollars of "art my kid could do."

Legislation is supposed to be a serious business.

(The contracts can be challenged in court which is where contracts are interpreted.)

______________________

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3786935

Admittedly, they cannot go after bonuses paid in 2008, but this is 2009 and tax code alterations can be made all the way up to December 31 without it ex post facto

The retroactive 60% surcharge is being driven by politics rather than law and good policy.

However, I do not believe that is the end of the story:

The government controls a majority stake in AIG. While it originally declined to use voting rights normally associated with the preferred stock, the government should be able to exercise some veto power.

There are also laws concerning contracts that are not in the public interest. That avenue should be investigated. That should be investigated in the courts.

The larger problem is that executive compensation has gotten out of hand in the last several decades. Corporate governance is not fulfilling its obligations. This is the best opportunity in years to do some to correct the process.

not everyone is in the pitchfork and torch mentality and wants the issues to be pursued the right way.

This is increasingly reminiscent of people forgetting the law and constitution after 9-11. "They're bad people" is not a good enough response.

Pfft!

"Pfft" is the most common level of analysis on DU concerning this issue.

which makes it all very incestuous, so no one would veto the salary of someone who might be in a position to scratch their back later.

and they have approved ever increasing compensation for each other

The only way to get rid of this is to threaten the board with removal in order to get them to get rid of the cheese.

It is not an easy process, but when you own 80% of the stock, you can pretty much vote anyone in or out.

AIG should have an shareholder's meeting sometime in the next 2 or 3 months. In this case, the government should nominate a slate or individuals (in case of a board where not everyone is up at once) to replace the current directors. It would be odd, however, for the SEC to review the government's filings for that vote. I haven't heard a peep about any shareholder's meeting. Perhaps the gov has a stand down on voting the shares.

Do you think there will be emerging new law coming out of such cases? And isn't that a good thing, going forward?

I mean, the legislative option, as pleasing as it may sound to us now, may not be the best option going forward in terms of future abuses. Changing the law through due proces in the court system is a majestic and wonderful thing. Majority hotheadedness in the legislature often comes to no good.

I'm not encouraged by what I am looking at now, in terms of the long term benefits to our republic and our democracy...

This is the reason the constitution forbids bills of attainder -- politics can easily trump the law when public emotions are aroused.

AIG and other companies are certainly being greedy, but greed is not a crime and confiscation is not a legislative option.

I just hope this opportunity is used as an occasion to reform the whole executive compensation system. The current board of directors arrangement is not working to the public good.

My personal opinion is that Obama wishes it to be reformed but does not wish to end capitalism in the country, just to bring about reform, sort of in the way FDR "saved" capitalism by creating Social Security (there was a real fear of Bolshevekism in this country at the time).
Now, if by reform you mean certain regulation by the SEC, I would agree with you. I just don't know the mechanism and the details of such reform. I am no economist. Just an old fine arts major interested in the politics and in history...

Surtax executive bonuses of all companies, not just AIG, that receive federal aid from this point forward.

Besides, it's not just AIG that's acting like assclowns.

If somebody got $6.5 million dollars I don't much care whether it was in the form of salary, bonus or lottery winnings.

Tax it all at an appropriate rate.

They go on the same form.

Moreover, what do you do for the AIG folks who were told they had to reduce their compensation and opted for $1 annual salary with bonus instead of their former annual salary with reduced/non-existent bonus?

"I'm sorry, that $1 is essentially tax free, but that bonus is at 90%. Too bad: If you'd done it the other way you'd have no bonus, but $1 million in income taxed at 39%!" It make outrage into policy, spite into law. Both are bad.

"you needed my money...i gave it to you...i will have some say into how my money gets used....you don't want to do it that way?...give me my money back?"

the whole AIG 'contract' situation keeps getting looked at through tight prisms....the simple truth is that AIG would be paying nothing, no insurance, no bonuses, no anything, had they not received US taxpayers' money...there are no contracts that cannot be 'revised' (ask UAW)...and no 'agreements' involving taxpayer money that should be exempt from any action related to the monies...maybe we should take back all of the money from AIG, let them pay out whatever they want, however they can...and then give them the 'loan'...hell, we are going to get screwed either way...

It wasn't to keep the company going as some abstract entity. It was intended to enable it to honor its contracts.

The bonus policy was known what--11 months ago? For some it was even renegotiated in late 2008. I can say I didn't know about it, but I'm a stay at home dad who does freelance translation, works intermittently on his dissertation, and is taking teacher ed classes. The Treasury dept. doesn't have the "luxury" of being able to say, "Hey, not my job." If they weren't aware of what's in the public record, they're simply blind and incompetent.

Laws are for general governance, not specific penalty. This whole idea of selectively taxing AIG bonuses is asinine and dangerous beyond measure.

:hi:

I find the whole idea of trying to take these bonuses away really creepy.

It's creeping me out how some Democrats and Progressives are adopting a pitchfork mentality now that we have an issue that has pushed our buttons. I thought this knee-jerk response was reserved for shallow minded Republicans and right wingers who don't know how to do penetrative analysis.

I have witnessed hang'em high attitudes about situations where the accusations and speculation being touted on this board were so far off the mark it wasn't funny. Having more personal knowledge about the some of the stories I've seen here, I have found the jacked-up outrage based on massive misinformation and group think to be not only frightening but counter-productive to achieving an economic recovery. Unfortunately even Obama, as smart as he is, took a turn at bat.

There is more to this story than just a few executives getting $10 million bonuses for gutting AIG (which does piss me off to no end). I would like to hear it before getting out the pitchforks. Why? Because my fear is just that day-to-day nose-to-the-grindstone workers are going to be the ones really hurt by this for doing no more than showing up to work and trying to earn a living wage to support their families with. People just like most of us on this board.

Also, the last thing I want to see is a precedence for retroactive punitive laws that Republicans can point to every time they have something in mind to punish us "socialists" with. It sends chills down my spine. These law-makers need to take a very deep breath and count slowly to 10. We live in a land of laws. Let's make sure they continue to mean something.

Tax isn't due until April 15, 2009. That's in the future, not the past.

Tax returns are always filed - yours included - on the basis of the law at the time of filing, not at the time the income was earned. You really think it takes two years to have a tax cut go into effect? Not bloody likely.

off with their heads.

I haven't seen these contracts, but if there is any way on earth to put them on the streets, we should do it as 80% owner.

I fear that we're becoming far too populist a nation and that it will be our downfall. Our founding fathers put three branches of government and a bicameral legislature in play specifically to avoid anyone ruling by angry mob, and yet that's precisely what we did under Republicans, and now under Democrats as well.

We have to fight the urge to follow the torches and pitchforks and rule by principle. We might not get this bonus money back, but we can ensure it doesn't happen again.

We are lead to believe that it's just some 'bad apples' who have brought us to this situation. But this didn't happen overnight, it is a culmination, a peak in the cyclical life of capitalism. In the lead up to this debacle a lot of money was made by these outfits, why does no one question that? What is the responsibility of the stockholders?

By concentrating on these miscreants we are lead away from questioning the system itself. They are criminals, but they are taking the fall for capitalism. It's like the mafia.

I'll be damned if I can figure out why the manufactured outrage, but it's obviously a coordinated effort.

http://freerepublic.com/focus/f-bloggers/2208528/posts

Unfortunately, the bonuses were paid in 2009 and the Congress is 100% within their constitutional powers to alter the 2009 tax code all the way up to midnight, December 31, 2009, and it won't be an ex post facto law.

But if they make it specific to AIG they'll be challenged on Constitutional grounds and almost certainly lose.

Bills of pain are considered bills of attainder, and that's what you'd have. There's no sane way to distinguish between cash bonuses and salaries that wouldn't affect lots of people. And the choice whether to make income taxes for amounts over a certain amount per year confiscatory or punitive is best not done when discussing a specific, outrageous incident. "Difficult cases make bad law" isn't just true for the courts; when you're trying to stabilize business and the economy, altering laws willy-nilly is counterproductive.

Federal Reserve loans, they're in like Flynn.

perfectly healthy companies who did absolutely nothing wrong and now have to take an even heavier burden for doing nothing more than going to work at a successful company, doing a their job and having the government force their company to take TARP funds in order to mask who the troubled companies were.

Why do these people, who followed the rules, deserve to take on a huge burden for the sins a few at a completely different corporation? Not every bank that got TARP money was involved in unscrupulous activity. Not every bank that got TARP money asked for it. So it is okay for the government to force your company to take money from them and then start punishing its workers because of the sins of a few gluttons in a completely different corporation?

Why not focus in on the people who actually did wrong and root them out? Punishing everyone who works for a financial institution just because the people who caused this mess worked at financial institutions seems a little arbitrary and cold.

Anything below 100,000 as a bonus gets taxed as standard income.

Everything above that gets taxed at 100%.

It isn't rocket science.

as a bonus at 100% just because they work at a financial company whether or not their company or they did anything wrong. Why stop at financial institutions if your just going to arbitrarily apply a law because you're PO'd at a comparatively handful of people who are gluttonous asses?

I have no problem with a tiered marginal tax, but not at 100%. But it should be applied equally to everyone no matter where you work and no matter if your income is called a bonus, salary or wages. There are hundreds of thousands of people who work in financial institutions who just go to work and do their jobs. The vast majority of them have absolutely nothing to do with this mess and deserve every penny they get. They are taxpayers just like you and me and have not shared in this spectacularly disgusting money party.

It's like punishing pilots for the greed of the executives. Or punishing assembly line auto-workers for the greed of theirs. This is going after the individuals instead of the corporations. It's really not much different from what Republicans do. It's just with white collar instead of blue collar workers.

We are looking in the wrong direction, just like the Republicans do. The problem isn't the workers, it's the upper level executives. And Congress can share some blame in this too. After all, they let this pass without restriction and gave the money to probably the most corrupt administration ever to dole out to some of the most worthless financial officers ever.

Look up, not down.

their company DID SOMETHING WRONG And they are being rewarded for FAILING!

So yeah, I have no pity. I can get a bonus from my company, but if my company doesn't make its numbers, I get NOTHING for a bonus.

A bonus is a bonus. There's never ANY guarantee when it comes to bonuses.

Not all companies that got TARP money were failing or did ANYTHING WRONG. In fact some were and are profitable and highly rated banks. All of the largest banks were forced to take the money so that no one would know which were failing in order to prevent a run on the banks.

Some did not actually receive money outright but instead sold their stock to the government. Despite that, their reputations have been sullied and they have been subjected to unfair criticism mostly as a result of a knee-jerk pitchfork mentality of an uninformed public. In fact, I fault Obama for not putting an end to that. Their employees, some who make as little as $18,000 a year, have already lost well deserved rewards for their outstanding performance because some very vocal people (some of whom are competitors), politicians and the media are playing fast and loose with the facts causing the public to throw collective childish temper tantrums insisting that these "criminals" not enjoy any rewards. After all they supposedly were naughty and failed and caused the economic collapse and taxpayers had to pay to save their butts. Nice story but utter BS.

Some that received TARP funds are successful companies that DID make their numbers and then some. But you are proposing that just because they got TARP funds that their employees should not get their full bonuses. For what purpose? Just to satisfy senseless outrage by some who don't know what they are talking about? Somehow people who have run or worked for successful companies should pay because some jerks at another company completely screwed the pooch? That even though the company played by the rules and did what their government insisted that they should still be punished?

AIG is a failing company and those who failed should feel the brunt of it. But try to refrain from lumping every financial employee or company into one group, because the vast majority had no involvement in this whatsoever. They have not failed and they have not benefited. They are as angry as you and their taxes are also paying for it.

IF they took TARP fundws, NO BONUSES!

Fuck 'em if they don't like it.

My sister makes 40-50k as a "Service Manager" for a bank that is doing great, but was FORCED to take TARP funds. She met all of her objectives and was to received a bonus. 3 days before getting it, she was told she is considered an "executive" and they could not pay it. If think this is reasonable, you are a freaking tool shed.

Tough times call for tough actions. People are accepting pay cuts all over in order to keep jobs.

Your sister should be no exception.

I have worked for companies that shoot up in good times and implode in bad times. Raises were huge during good times and layoffs/pay cuts rampant in bad times. I decided to leave this area and go to company that is somewhat sheltered from bad times, with the tradeoff being they don't grow by huge amounts in good times (just a nice steady growth). Over the long term, raises/bonuses equal out to about the same, but without the stresses of the wild swings.

However, by your reasoning, I should accept the drawback (smaller raises in good times), but give up the benefits (same size raises in bad times) because "everybody else is doing it." Just doesn't make sense.

If a bank took TARP money, they were FAILING because ALL the banks were so tied together with default credit swaps that if one went they were all going to go.. ALL of the banks were failing, so nobody who works for any bank deserves any bonus.

End of discussion.

Many good companies were forced to take the TARP funds when they did not need it. These companies most likely did not experience as large of an increase in profits and their employees, thus, got smaller raises than many of their counterparts. Now, when the employees of the corrupt companies are having to take a hit to bring their wages back into alignment with reality, you expect employees who did not experience those artifical increases to still take a hit. It makes absolutely no sense.

The only possible reason I can come up with is that you want to hammer the people at AIG (and similar companies) so badly that you do not care one bit how much collateral damage there is. Sure, tens of thousands (if not more) of innocent middle class people will have to take bullets, but that is cool so long as you get the satisfaction of sticking it to the original group of people.

None of the banks are innocent.

NOT A ONE!

End of discussion.

Facts get turned into opinions.

There are several banks that were not in trouble, but were forced to take TARP money.

That isn't open to interpretation. It is a fact.

Not ALL banks participated in the lending debacle. Some didn't deal in sub-prime loans.

This isn't open to interpretation. It is a fact.


It seems your OPINION is that the innocent should be punished along with the guilty.

The incestuaous nature of the default credit swaps had EVERY bank at risk.

Not a one of them are innocent.

People try to stretch everything into an opinion so they can pound their fist on the table.

Your overbroad and twisting analysis could apply to EVERY industry and make every company in every industry culpable for the failure of the entire industry.

The actual facts are not all banks are responsible.

Sorry, not letting you get away with that.

Everybody knew the risks involved with default credit swaps, yet every bank participated in them and every bank went to AIG to insure them.

Every bank is responsible.

There is a difference between accepting a reasonable amount of risk and loading up on it. Maybe Wells Fargo was aware of the risk, took on SOME of that risk, and properly hedged that risk with investments elsewhere. Sure, they took a hit on the risk that they accepted, but that is the nature of ANY investment. They were adequately capitalized to absorb the risk and carry on with their business. This is a STARK contrast to the company that loaded up on the risk and drove the company into the ground when it went bad.

Risk is a part of business. Some took steps to mitigate the risks accordingly and wouldn't have gone out of business. Others went blindly into that goodnight and would have gone under.

You cannot lump them all in together just so you can be angry at all of them.

nobody gets a bonus.

EVERY BANK FAILED!

Since the banks that failed were a business, EVERY business in the world failed and nobody anywhere deserves a bonus. And of course, since a person murdered another here last night and we are all humans, we ALL deserve to go to prison. I see no logic in your reasoning. Only blind rage and a desire to exact revenge so strong that you cannot control it. Kind of like the death penalty supporters.

Some banks never lost profitability and retained strong balance sheets.

I've never heard that banks were being forced to take tarp funds. It may be true. This whole thing is more complex than I can take the time to digest.

But ...

I have heard that there was fear that some banks would refuse tarp funds if there were strings attached. Now I don't know why some banks that were in trouble would have the option to refuse tarp funds while other backs that were doing well would not have that option.

"The first $125 billion will be divided among nine of the largest U.S. banks, which were forced to accept the investment to help destigmatize the program in the eyes of other institutions. "

http://uspolitics.tribe.net/thread/08067ae0-1f3e-4093-8ead-60085b76537f


I didn't save them as I read them, but you can google for more if you want.

There are lots of stories on the smaller banks being pressured into taking the money.

Statements like "not a one is innocent" shows you no longer care about facts and are more concerned with emotion.

I agree with the root cause of your views, but am not someone who is going to sentence a whole group without looking at individuals (there are too many examples of how prejudices are wrong).

The fact of the matter is, AIG was too big to fail because AIG INSURED all of the default credit swaps.

So if AIG went down, ALL of the banks were going down with it because NONE of the banks refused to participate in default credit swaps.

Increase the marginal tax rate above $250,000 to 50%

That's what it was under Ronald Reagan.

Salary = any money or assets awarded to the employee. This includes bonuses, retention awards, actual stock, conversion of stock options to real stock or money, etc.

It would take care of quite a bit of the problem and bring in about a hundred billion extra per year in tax revenue to the federal government.

Then, if any Repuke or media pundit whines about it, tell them that it was the level that their savior Ronny Raygun had it in the 1980s. That should shut them up.

During bankruptcy, prior obligations are subject to renegotiation or revocation.

This tax plan is simply a creative way to void the bonuses, which most certainly would have happened if the government didn't intervene and AIG did go bankrupt.

And bankruptcy proceeding are matters before courts anyway, not legislatures.

None of these people took an oath to "more or less" uphold the Constitution.

For the last 20-25 years the single worst thing about the Republicans has been a willingness to pass bogus laws knowing the courts would get the eventual blame for killing the thing.

Passing unconstitutional but popular laws is very, very, very, very, very bad behavior.

Tax law is frequently updated to apply to past earnings or past investments.

For example, when the tax rates on capital gains are raised, you can't claim that you bought a stock 30 years ago when the tax rate was lower so you should pay the lower rate.

The reason you cannot claim the lower rate is that the capital gain (the taxable event) did not occur 30 years ago.

Had you sold the stock 30 years ago and the government called you today and said, "we decided to tax you some more on that stock sale you made in 1979" the first word that came to mind would not be creative.

Notice that the bill is written to apply to bonuses paid by any bail-out recipient the government controls more than 79% of. Which applies to only one firm.

Why is it phrased that way, instead of just saying "people who work for AIG"?

Because everyone knows it would be DOA if explicitly directed against AIG employees. (This is directed against individual current and former employees, not AIG itself.)

So even the guy who drafted it knows it's probably unconstitutional.

And since bankruptcy is a legal status, you cannot be "effectively bankrupt" and still have those rules apply.

I googled "ex post facto tax" and, unhappily, ended up at the following Cato Institute paper: http://www.cato.org/pubs/journal/cj15n2-3-4.html

excerpt:

United States v. Carlton: Modern Difficulties of Civil Ex Post Facto Laws

Recently, the Supreme Court unanimously held that retroactive tax laws were constitutional in United States v. Carlton (1994). While acting as an estate executor, Carlton relied upon a provision of the Tax Reform Act of 1986 that gave companies a favorable deduction from the proceeds of sale of a company's securities to its Employee Stock Ownership Plan. The government then proceeded to retroactively deny this favorable deduction by amending the 1986 law. The court of appeals in Carlton struck down the amended law as unconstitutional after finding that the estate had detrimentally relied upon the 1986 law and had no notice of the impending change. The court of appeals also cited the fact that retroactive income tax laws have been allowed but only for the year of enactment and the year prior to enactment (thus about a two-year limit). This decision was the first such invalidation of a retroactive tax law in almost half a century.

The Supreme Court, however, reversed the decision by the Court of Appeals for the Ninth Circuit and found that due process was not violated by retroactive application of the amended tax statute. According to the Court, the retroactive application of the tax amendment was consistent with the Fifth Amendment's due process clause because: (1) The purpose of the congressional amendment, which was to avoid a significant and unplanned federal revenue loss, was neither illegitimate nor arbitrary; (2) Congress acted promptly and established the retroactivity for only a short duration; (3) Carlton's reliance was insufficient to establish a constitutional violation; and (4) Carlton's lack of notice regarding the retroactive changes was not dispositive.

<snip>

Note the casual reference two-year retroactive income tax law changes. Sounds like actual law has drifted pretty far away from Article 1, Section 9 of the Constitution.

And what will the lynch mob want next?

Congress is doing its job for once. Smacking down a huge attempted rip off is what they're supposed to do. Quibbling about them being a few months' late nixing AIG's contrived contracts is really small. These execs should be glad they're not fired, or worse, indicted.

Fraud - ya know? It voids everything. If these execs want to play that game, I'm sure a good case for fraud could be brought against them. They need to STFU and take their medicine... before it gets worse for them.

What a joke this thread is.

I wonder if this guy would have demanded that slavery be abolished only when the last slave died. Can't break the existing contracts!

If you believe Congress's job is "Smacking down a huge attempted rip off" you seem to have confused our legislature with the Mod Squad or something.

If it is fraud - ya know - then it is a matter for the fucking Justice department acting on a civil or criminal basis using laws Congress passed a long time ago... DUMB-ASS.

Ever heard of BCCI and Iran Contra?

No, you are the one making these grandstanding statements and pretending to be the only serious entity on the planet.

Congress can pass retroactive tax laws. They can force companies to void contracts. They can.

Serious enough for you?

AIG is not (yet) part of the U.S. Government. Nice try though.

The government has 80% onwership.

BCCI was not an American government-owned bank.

There was also the Savings and Loan scandal.

Sorry, but that example doesn't fly.

And while the government may own 80% of AIG, they do not legally have control over it. Perhaps that should change, but it is currently not the case.

I'm not going to argue BCCI with you. It was referenced in response to this comment: "If you believe Congress's job is "Smacking down a huge attempted rip off"

It was not a comparison of AIG And BCCI.

It is not run on a day-to-day basis by the government. Government may own a stake in it, but as of right now, they do not have control over it. I don't understand the intricacies of the situation, I must admit, but they are not operated by the government.

well said

that I sometimes wonder if it hasn't been taken over by Freepers. It's rather bizarre.

It's like: "No need to let facts get in the way of our self-righteous indignation."

There is so much misinformation and knee-jerk BS going on it is unbelievable. We have a few people at the very top of a few financial institutions whose corruption, no doubt aided and abetted by the last administration, have created huge economic issues. So let's not just focus on that. Let's encourage our Congress to act like clowns and attack anyone working at the bank instead of focusing in on determining if there was criminal activity and prosecuting it.

In reality their outrage should be focused on the Congress for supporting deregulation and not insisting on stronger enforcement of the remaining regulation.

It reminds me of the Freepers bitching about immigrants while hyper-supporting corporations and the Republicans who are really the ones screwing up their lives. Another thing that remains me of the Freepers is this frightening willingness to go along with any law to satisfy their lust for vengeance. There is no way to be overly dramatic about the precedent this legislation would set and how it could be used against us "socialists" once the Repukes get back in power. Scary stuff.

I think this is the first time that I've disagreed with a substantial part of one of your posts.
You usually hit the nail on the head. Not this time imho.

The bill covers only bonuses paid by bail-out recipients of which we control more than 79%.

Of course AIG is the only entity that meets the bills requirements because we own 80% of AIG.

It was crafted specifically for AIG and the fact AIG is defined by cutesy means rather than naming it outright demonstrates that the bill's author knows full well it's defective.

that have received TARP funds. I don't know about cutesy terms, unless you consider "organizations that receive TARP funds" as cutesy.

1. I have not seen anything stating ownership percentages.
2. This would not be the first time legislation was crafted to affect a single company. A couple of years ago, some state (I can't remember which) passed a law requiring all companies with a certain number of employees to provide health insurance to all their employees. Of course, the ONLY employer in the state that met the requirement was WalMart. Additionally, I had a client that built coal burning power plants. The state of Georgia did not want them to build there, but they met all the requirements of the state. The state then proceeded to pass all sorts of laws that were crafted to affect only them. I do not know how it was resolved, as I left my company in the middle of it, buy they completed the plant there.

But congress can't just make up laws like this as we go because there was none to begin with and we needed this new law to get somebody. Isn't there a law against that?

yet and the taxes for this year can be amended.

bush* already INACTED laws SPECIFICALLY DESIGNED FOR ONE PERSON, in direct violation of the supposed "expost facto" law - and NOBODY challenged it at the times they were created. NO ONE.

AND they made these NEW laws RETROACTIVE, which is ALSO expresslly forgidden IN THE CONSTITUTION...

so that boat left the dock LONG AGO...

There was plenty of outrage here at the time...

So your argument has already been proven null and void.

(while I agree that these things SHOULDN'T happen)...

money is being used to float the company at this time.

I have never seen a contract that rewards failure; seems to me there would be something in those contracts that could be used in litigation.

These matters should go through the Courts, to be sure, I am no ex post facto fan, that is a surefire road to disaster in a society that is governed by law.

I have to wonder if there si any hint of ethical behavior in any of these people that take huge bonuses for failure at their jobs. It is one thing to make a company more profitable for shareholders by various means; it is something entirely different when one drives a company into the ground, and then gleefully accepts a huge reward for doing it.

I'm not a lawyer, nor an economist. I have a decent education, and am quite often broke. I don't blame anyone but myself, and while I've been bailed out in the past for a few of the situations that have come my way, I know who I owe, and when things get a little better, my intention is pay these people back. The thought that I could actually get a "bonus" for my messing up never enters my mind.

My sense of justice runs deep. My father was lawyer, my mother ensured i knew what was "fair and right". I was brought up to accept my failures and learn from them...most Americans, most people on this planet, have the same "basics" in this area. It appears that those who know how to "play the game" become exceptionally wealthy in situations that border on, if not actually, corruption. By making these contracts public and open to scrutiny, the taxpayers would be well served. It would also serve as a "shot across the bow" to those who would pursue such fiscal irresponsibility.

to seize all of their property and ownings and cash using eminent domain and auctioning it all off to the highest bidder, and using a portion of their procedes to televise the public firing squads.

I considered making it a pay-per-view event, but that really wouldn't be fair to the poor, which would include the surviving families of the executives who'd naturally be in the poor house.

Congress has plenary power to regulate commerce.

Ex Post Facto laws deal with criminal punishment of acts which were legal when committed.

Tax for 2008 is due and payable on April 15, 2009, depending on your accounting method. The requirement to pay tax, and the tax law, can be changed at any time prior to that date. The law is to pay the tax - not to "criminalize" income earned in 2008.

Let's put it this way.

You got a million dollar bonus in November 2008. Congratulations.

The government, in March 2009, amends the tax code to add a surcharge to million dollar bonuses.

When you file your tax return on April 15, 2009 then you have to do it in accordance with the law as it exists on April 15, 2009.

The only "criminal" penalty you can face is not properly reporting your income and liability on April 15, 2009.

WTF is "ex post facto" about that? According to my calendar, it is not even April yet.

Wait, wait, don't tell me - whenever taxes are LOWERED prior to April 15 in any year, you file your taxes in accordance with the requirements as they existed during the previous year?

No you don't - that's nuts.

But I didn't.

Its specific defects are more akin to a bill of attainder.

The litany of ex post facto, double jeopardy, bill of attainder, taint of blood, and a host of concepts I didn't mention were offered as, in aggregate, demonstrating the philosophical underpinnings of our system.

I could have thrown in "takings" also. And due process.

It is an internally consistent approach to law.

Of course one can try to find ways to circumvent the spirit through lawyering... that's how we got torture. That's how we got a lot of things.

Your thesis that congress can change 2008 tax rates on any date before April 15, 2009 is, of course, ridiculous, but I don't know if you were offering it seriously.

A person can pay their taxes on January 1, 2009. You suggest those taxes are subject to continual revision from January 1-April 15. They are not.

A general observation: a person is supposed to know the rate at which any activity is taxed before undertaking the activity. That is implicit in everything about our system. The fact that that may not have always been honored is evidence that Congress didn't start treating our system with contempt this week, which we already knew.

Exhibit A - the 2001 "tax rebate"

Aside from which, they have due process - they can sue over it in tax court. Notice, opportunity to be heard, the works. Indeed it is why we have lawyers.

All laws can be challenged by a person with standing so there's something Orwellian in noting that people have intrinsic due process rights as a defense of a bad law.

And the tax rebate example is more than off point... increasing and decreasing taxes are not legally symmetrical actions any more than arresting someone and freeing someone are symmetrical.

One could put forward a theory that the President's pardon power implies the symmetrical power of convicting anyone of anything by executive fiat, but it doesn't.

Taking money is a different Constitutional class of action from declining to take money. For instance, anyone can unilaterally decline a tax rebate by throwing the check in the trash the check. One can not unilaterally decline to pay a tax increase.

It's how our system works. Legislators are generalists. Take the bill to add a voting rep for DC to the House. On my casual read, it seems that the Constitution assumes that representatives will be from "states" and that the DC electoral vote amendment refers to the rep DC would have "if it were a state". So while DC is considered a "state" for the purpose of a lot of legislation, the Constitution suggests it is not one for the purpose of representation.

But, hey, I'm all in favor of the bill, and I assume its constitutionality will be worked out by those who apply more candlepower to the question than I have time or expertise for.

Given the size of the bonuses, I'm not worried in this instance about whether they will be able to find the resources to mount a challenge, so as a practical matter I'm not all that concerned about it.

Now, let's take another example of an unconstitutional law. Remember when the nutjobs wanted a constitutional amendment enshrining idolatry in the form of an anti-flag burning amendment? Do you remember the Senator who, as an alternative, championed a piece of flag protection legislation?

Joe Biden.

Did he know that the bill was unconstitutional as all get-out? Yes he did, and I know this for a fact.



Did he do it as a political maneuver to provide cover for those who would rather not tinker with the constitution over a largely symbolic gesture? Yes, he did.

We're not running some lab experiment here - there is an element of politics to a lot of things.


The Constitution assumes a conversation among the branches in the operation of its procedural features. Congress should pass more unconstitutional laws, courts should shoot them down, and congress then has clearer "back to the drawing board" instructions. It's all good. A common misperception is that the Supreme Court has some kind of monopoly on interpreting the constitution. Every branch, in the execution of its powers, must by necessity arrive at and apply its interpretation. The hitch is that the other two can call "shenanigans" on any one which goes off the reservation.

Avoiding "having the system work as designed" is not the same as "having the system work as designed", and its unfortunate that we deem it a "crisis" whenever an interesting constitutional issue is presented. That's no crisis - it's the system functioning. How much of the Patriot Act, for example, was rendered inoperative in various decisions challenging various parts of it? Quite a few.

And it wouldn't be after the fact anyway.

but they pass it anyway just to get on the record that there were officially 'outraged' and did all they could, but at the end of the day, there was 'nothing we could do.' :eyes: