Let’s take a closer look at the torches and pitchforks the U.S. Congress is brandishing. As you have undoubtedly heard, Congress overwhelming passed the 90% tax on “things we don’t like.” 85 Republicans joined the fracas, so this is a bipartisan ex post facto effort.
Our sister site, Dealbreaker, has already weighed in on the legality of this tax. (Aren’t you glad law firms didn’t take any government money?) They neatly summarize some of the key legal questions:
The “bill of attainder” test keys off these two prongs:
Is it targeted at specific individuals?
Is it of punitive intent?
So what’s punitive intent? The Fifth Circuit’s SBC Communications v. FCC ruling is about the most direct on this as the Supreme Court hasn’t touched the issue in decades.
We’ve collected some of the arguments, for and against, for your perusal. After the jump, we invite you to take our reader poll.
Such a tax would presumably be leveled on the basis of some criterion sufficiently general to avoid classification as a measure targeting solely a closed class of identified and named individuals. The fact that the individuals subject to the tax in its retroactive application would in principle be readily identifiable would not suffice to doom the tax either from a bill of attainder perspective or from a due process perspective. Moreover, the fact that the aim of such a tax would be manifestly regulatory and fiscal rather than punitive and condemnatory, and that the tax would be part of a measure that would be prospective as well as retroactive in its operation, would serve to blunt the force of any bill of attainder challenge. Finally, such a tax would be devoid of the sting of political retribution and would not partake of the classic “trial by legislature” that the attainder ban was designed to avoid.
Maybe it would be “devoid of the sting of political retribution,” but not the smell of it. Not when you have U.S. Senators calling on AIG executives to commit suicide.
Over at Blue Mass Group, the counter-argument to Professor Tribe is put plainly:
[O]ne of the definitions of “punishment” under Supreme Court precedent is “the punitive confiscation of property by the sovereign.” So the question boils down to whether the super-tax is “punitive.” …
Someone challenging the super-tax shouldn’t have any trouble finding evidence that the folks in Congress are interested in punishing AIG’s bonus recipients, even setting aside Senator Grassley’s call for them to commit suicide. And though there are cases that declare taxes as non-punitive, a 100% (or close to it) tax might be a different thing — especially with the current Supreme Court. It’s not a slam-dunk either way, but the argument that a 100% tax on pretty much anything is punitive seems pretty strong to me.
Okay Above the Law readers, what do you think? Are we looking at an unconstitutional punitive tax, or is this a perfectly legal clawback? Participate in the poll below.
The 90% AIG Tax: Good Politics, Bad Tax Policy [TaxProf Blog]
Laurence Tribe: Is Taxing AIG Legal? [The Atlantic]
Is The AIG Tax Constitutional? [Dealbreaker]