Letters To Jim Webb And Mark Warner Concerning Retroactive Taxing Of Bonuses

Here are copies of the letters I emailed to Senators Webb and Warner concerning the retroactive taxes Congress wants to impose on the bonuses to be paid to employees of AIG.

Feel free to copy and paste this message and send it to your own Senators:

[Senator], I am writing you to ask you to vote "Nay" on the upcoming bill that would impose retroactive taxes on bonuses paid out to AIG employees. Whether those bonuses are right or wrong, good or bad, is immaterial to my concern here. I am concerned about the integrity of the Constitution of the United States of America. Specifically, Article I, Section 9, Clause 3 which clearly and unambiguously states: "No Bill of Attander or Ex Post Facto law shall be passed." HR1586 which passed the House yesterday falls, by definition, under that clause in two ways. 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 (e.g. 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. This too makes this legislation unconstitutional. 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. Anyone who would willingly violate a single provision of the Constitution would most certainly be willing to violate any other provision. Please do not be such a person. Please vote "Nay" on the Senate version of HR1586 and preserve the integrity of the Constitution. Thank you.

As I wrote earlier, if this becomes law and is not struck down by the Supreme Court, the Republic will be in grave danger.

House Of Representatives Votes Congress A Power It Never Had And Should Not Ever Have

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.

UPDATE:

Looks like the Wall Street Journal agrees with me:

A Smoot-Hawley Moment?
Wall Street Journal Review & Outlook
March 23, 2009

Tax The AIG Bonuses? Only If You Want To Violate The Constitution.

Article I, Section 9 of the Constitution of the United States of America clearly and unambiguously states: "No Bill of Attainder or Ex Post Facto Law shall be passed."

I'm sure we all remember this from our 4th grade history lessons. That's where I learned that "Ex Post Facto" means "After the Fact."

But, apparently, the Democrats and other members of Congress are not as well versed as I am about what is written in the Constitution.

First, we know that the Democrats in Congress voted to approve of a stimulus package that contained the Dodd Amendment which explicitly exempted the bonuses that AIG would pay out to its employees. Then, President Obama signed that legislation into law. This means that those bonuses were made perfectly legal according to the current Congress and the current President.

Now, they want to pass legislation that retroactively repeals that amendment.

According to the Fox News:

Senate and House lawmakers have returned to the idea of imposing heavy taxes to recover the bonus money. Ten House Democrats introduced a bill Tuesday to tax all bonuses above $100,000 at 100 percent to recoup all the "outrageous" AIG bonuses. Senate Majority Leader Harry Reid also vowed to recover a sizeable chunk of the money. "Remember, we, as a Congress, are not defenseless. We can also do things," the Nevada Democrat said Tuesday, announcing he has tasked Senate Finance Committee Chairman Max Baucus, D-Mont., with crafting a proposal to recover the bonuses. He said the legislation would be proposed by Wednesday and subject the bonuses to a tax of more than 90 percent. He also said lawmakers would soon work with the administration to complete a Wall Street accountability bill.

This is precisely what the Framers of the Constitution envisioned as an "Ex Post Facto" law.

This legislation must not even be considered. Those who will be considering it or supporting it will be in violation of their oaths to uphold and defend the Constitution of the United States.

So, what would you choose? Irrational emotionalism over something that the Democrat-controlled Congress and the Democrat President approved of, or would you choose to support the explicit admonitions of the U.S. Constitution?

I choose the latter.

You can access the complete article on-line here:

To Recover AIG Bonuses, Lawmakers Scramble To Undo Protections They Approved
FoxNews.com
March 17, 2009

AIG Bonus Furor: Senator Chris Dodd (D-CT) Made The Bonuses Possible

Don't you just love it when a Senator steps on his/her own foot and trips him/herself up? I do. That's why I am blogging about Senator Chris Dodd and his hypocrisy about bonuses being paid out by American International Group (AIG).

While Congress was working on the porkulus/spendulus bill, Sen. Dodd added an amendment that I am pretty sure he wishes nobody remembered.

According to Fox Business:

That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax. The amendment made it into the final version of the bill, and is law.

So, the Democrats (and a few ignorant Republicans) are all up in arms about bonuses being paid out in strict accordance with a law that they themselves passed!

Can you say CHUTZPAH?

Here are the rules of the Dodd amendment:

Crack down on bonuses, retention awards and incentive compensation: Bonuses can only be paid in the form of long-term restricted stock, equal to no greater than 1/3 of total annual compensation, and will vest only when taxpayer funds are repaid. There is an exception for contractually obligated bonuses agreed on before Feb. 11, 2009. For institutions that received assistance totaling less than $25 million, the bonus restriction applies to the highest compensated employee; $25 million to $250 million, applies to the top five employees; $250 million to $500 million, applies to the senior executive officers and the next top 10 employees; and more than $500 million applies to the senior executive officers and the next top 20 employees (or such higher number as the Secretary determines is in the public interest).

Now, why would Sen. Dodd have done something like this? Perhaps OpenSecrets.org can provide us with the answer:



Note that Chris Dodd and Barack Obama were the two top recipients of money from AIG.

Now, people have known for over a year that these bonuses were coming out and a Democrat Senator introduced an amendment to make sure that those bonuses were legal. Why is their such a furor going on over all of it?

It is a distraction from other things, that's why. It turns out that AIG was used as a launderer to spread money around to other banks. Someone doesn't want us investigating that so they blow the bonus issue way out of proportion to try and make it into some type of scandal.

As for the outrage, I wonder why there was no outrage when public funds were used to shore up UAW retirement accounts?

You can access the complete article on-line here:

Amid AIG Furor, Dodd Tries To Undo Bonus Protections He Put In
Rich Edson
Fox Business
March 17, 2009