Congress’ 90 Percent Bonus Tax Is Probably Legal
For those who’ve been wondering whether Congress can really just vent its anger at those $165 million in AIG bonuses by levying a 90 percent tax on the bonuses of all executives who receive bailout money, the answer is: probably, yes.
The Los Angeles Times reports that legal experts agree that the bill that passed the House on Friday would probably not be considered a bill of attainder, which is essentially a law that singles out one group for punishment and is prohibited by the Constitution. It’s probably not an ex post facto law either, which retroactively punishes actions that were lawful when they were committed.
“The Supreme Court has limited those provisions to laws that ‘inflict punishment,’ mostly in the criminal arena,” writes The Times’ David Savage.
While it may feel like punishment to all those corporate executives accustomed to multi-million-dollar bonuses, tax laws are technically not punitive, and legal experts say they’re rarely struck down as unconstitutional.