Wouldn't a tax on the AIG bonus boobs be Ex Post Facto? Consitutionally shaky?

[Perky]

I am not opposed to the messagee it sends. ALthough I don't fault the Bonusees nearly as much as the bonusers. But It occurs to me that while it may feel good, it might run afoul of Ex Post Facto language. not to mention prohibition against harsh and unusual punishment.


Just saying. :shrug:

[HiFructosePronSyrup]

1. No.

Ex post facto applies to criminal law.

The Supreme court's upheld retroactive taxes.

[Perky]

Does it not become criminal when they refuse to pay?

[DevonRex]

6. If they refuse to pay, they're breaking a different law. So no.

And even then, it begins as a civil matter and might end up a criminal matter down the line but not at first.

[HiFructosePronSyrup]

8. Yes, then they become criminals.

But they became criminals after the law passed.

[Perky]

9. Yeah you are right... the Cruel and Unusual punishment is the better argument,

[HiFructosePronSyrup]

14. Cruel and unusual punishment?

Cruel and unusual punishments apply to crimes.

Also: they apply to punishments.

[Perky]

15. I think it is an itneresting argument

The founders did not specify a distinction between civil and criminal and the a 90% tax on something like a contractual bonus which popular opinion say you should not get (without a finding of fact) is penalizing some one who may or may not have done anything wrong. It is certain unusual and certainly capricious and probably cruel in the absence of either preexisting law or a finding of fact

Let me ask another way. Are they being taxed because AIG failed in it fiuciary obligations when this whole mess started to percolate? Are they being penalized because AIGm chose to honor its contractual obligations to its employees? Ar they being penalized because the bonuses came from bailout dollars? Seems to me that the penalty out to accrueto AIG and not the employee.

[PBS Poll-435]

2. Ex Post Facto applies to criminal proceedings

Although you may have an argument with an "equal-protection" defense...

[Bok_Tukalo]

3. The are taxing 2009 income

It wouldn't be ex post facto unless the law is passed after December 31st.

[Perky]

7. ahh. good point

[NewJeffCT]

10. bonuses paid before Feb 28 of this year, however

are likely applied to last year's earnings. I know I used to work for some big corporations who would do that - accrue for the bonuses in 2008, but not actually pay for them until 2009.

(or, accrue in 1998, but pay in 1999, etc)

[Bok_Tukalo]

11. Bonuses may be accrued but the income tax liability is in 2009

That is how mine works, anyway.

[DevonRex]

4. Taxation is a civil matter, not criminal. So, no it wouldn't be.

[rateyes]

5. I think it would be a bill of particulars,

and thus unconstitutional. Not everyone who receives a bonus is taxed, just those who received TARP money. Add in contract law, and I think that all this stuff with the Congress is more show than dough.

They don't want to vote against it, for political reasons, but know it will probably be struck down by the courts.

[WCGreen]

12. As an accountant, that is what I believe as well.

It's a feel good measure that will play nice at home but will be declared unconstitutional.

[endarkenment]

13. that would be bill of attainder

but you would have to argue that any tax law that applied to one group of individuals but not another is also a bill of attainder. The law appears to apply to all bonuses paid by companies that receive more than 5B in federal 'bailout' funds. That would be difficult to argue as a bill of attainder any more than applying, for example, estate taxes only to people whose estates transfer more than 5,000,000 dollars.

[Hansel]

17. I think you're right. They know it won't fly.

I would be surprised if Obama signed it. He will explain the constitutional issues with it and they have an excuse to back away from it.

Why are they going after the employees anyway? Why aren't they going after the corporation to just pay the money back? It's kind of a creepy precedent. Especially since some of the banks that got TARP money were never in trouble and only got TARP money (in exchange for stock) only to mask which banks were the bad ones. Now their employee's are being punished for the sins of AIG.

Does anyone advocating for this understand the precedent it would set for their company? What if Republicans in Congress decide that because GM made a car that spontaneously combusted due to a design flaw, that every company who accepted government funds should have their assembly line people taxed at 90% because they're angry about this? The law Congress just passed would certainly provide the precedence for doing this and Republicans hate union workers. So why not? They could build up public outrage against union workers through their right-wing echo chamber until everyone is convinced it's union workers that have caused the cars to explode and don't deserve to be paid.

I don't get the overwhelming support on this board for punishing employees instead of the corporation. It's really pretty scary.

[ProSense]

18. Not unconstitutional.

here

[BlooInBloo]

16. No. People just like saying that. For no reason other than they like saying that.

[Beacool]

19. It's a witch hunt.

It's all phony outrage by a bunch of hypocritical people who in the past would sell their mother for corporate contributions. They are all now soooo angry? Well, then let Dodd, Obama, McCain, etc. return their AIG campaign contributions just for starters.

Most of these contracts date back to late 2007 - early 2008 and most of them did not go to executives of the financial products division. Furthermore, the majority of AIG employees do not receive bonuses, not even a freaking turkey for Christmas. Nevertheless, AIG employees are being harassed, their lives have been threatened and many fear going to work.

So, pardon me if I don't give a rat's ass what some bloodsucking politician who has eaten for years at the public trough thinks of AIG.

x(

[Jennicut]

20. I do agree its a witch hunt. AIG has headquarters here in CT and people are wary to go to work

These are low level people. Dodd received a lot of money from AIG because of the fact that it is based here in CT. Most politicians receive money from employers in their states. Dodd was never trying to be holier then thou either.

[Beacool]

21. My point is that these are standard corporate practices

and all of a sudden these politicians act as if they had never heard of a bonus. AIG had informed the Fed about these bonuses (and others that are due later in the year) back in the fall when they negotiated the bailout deal. Who put the deal together? One of those people was Geithner. How can he claim not to have known about them? Besides, the government attorneys were the ones who told AIG that they had to pay the bonuses to avoid costly litigation. The Fed even hired outside counsel and they too came to that same conclusion. So, what's with all the phony outrage?

It's the usual B.S. Politicians are receiving many calls and emails from angry constituents who have lost their jobs and homes and want something done against these corporations. Politicians, knowing that these people can turn on them and vote them out of office, are using AIG as a scapegoat. Well fine, let AIG go belly up and default in over 70M policies worldwide and watch bank after bank go bankrupt.

Whatever........

:-(

[Jennicut]

22. Well the public demands their outrage. They react to the public

who overall cannot understand critical complicated thinking. There are exceptions of course but the MSM has people taught to be outraged over the newest and latest topic. If they did not react the politicians would be thrown pitchforks. The AIG outrage is pent up anger at the banks, Bush, the failure of the govt. to protect us from the greed of corporations. Most people still cannot handle the fact that the entire economy collapsed and so focus on only one thing.

[Beacool]

23. People don't seem to understand what AIG was going to do with the bailout money.

AIG, until recent years, was a conservative company. Meaning that they diversified, but were careful to remain financially sound. The Financial Products division was a small part of AIG. It's principal office is in London and a smaller office is in CT, they total about 400 people. While Hank Greenberg was CEO the company's involvement with these risky derivatives was minimal. After Martin Sullivan became CEO, he trusted Joseph Cassano (the president of Financial Products) to know what he was doing. These transactions are very complicated and most in the organization didn't understand them, they only knew that they liked the profits. Well, when the crap hit the fan, the failing banks turned to AIG to pay them on their claims. That's why the majority of the initial AIG bailout money went to US and foreign banks. If AIG had reneged on their obligations, most of these banks would have failed and the world economy would be in far worse shape than it is now.

The average person doesn't understand, or care, about any of this. They only know that they are angry and they need to take it out on someone. So, the vultures in the media whip their anger into a frenzy and the hypocritical politicians go against the spirit of the law solely to cover their asses.

;(

[Jennicut]

24. Thanks for the background Beacool. Awesome explanation!

The media certainly tried to whip up the anger, didn't they?
I feel for the people in CT who work at the smaller office. Most of them nothing to do with the bonuses.
I know people who received the bonuses live here in CT, mostly the Fairfield area. Most of CT is not like this area...my friends and I always referred to it as Snob Central. Greenwich, Stamford, Westport. A lot of wealth there. I live in Northwestern CT which is actually one of the least wealthiest areas of CT. Still, they are not even to blame...it was the ceo's decision in the first place.

[Beacool]

25. Yes, it was!!!

Martin Sullivan sank in a short time the largest international insurance company in the world. He, and a few others should be hang to dry, but the majority of AIG employees are hard working stiffs who do not deserve to be demonized. Let alone by the vultures in the media and Congress. Employees have been confronted and cursed at, a guy on his lunch hour here in NJ was surrounded by several people and pushed around (he had his ID hanging from his belt). A woman on the lightrail dropped her ID and a man asked whether she worked at AIG and then proceeded to curse at her. Women in some offices are being escorted to and from work by their husbands and boyfriends. AIG has had to put extra security in their buildings. They have received death threats, bomb threats and menacing emails. These a-holes are inciting some kook to do something violent. The whole thing is sickening.

:(