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DanWeiss



Joined: 24 Jun 2008
Posts: 2296
Location: Connecticut, USA

PostPosted: Sat Mar 21, 2009 10:06 am    Post subject: Reply with quote

isobars wrote:
SNIP

The unconstitutional 90% tax-targeting of exec bonuses is a frightening example. If the Congress can just wave their hands and take back funds legitimately and contractually earned by any group BECAUSE IT'S THE POPULAR THING TO DO, what's to stop them from doing it to any pot of money they want, from Rush Limbaugh's to your IRA (as Pres Clinton tried to do with his 15% one-time levy)?
SNIP
Mike \m/


Mike: Please point out in a defensible way what part of the constitution prohibits the federal government from setting federal tax law. I think I can find language quite to the contrary.

You and I might not like it, but there is a remedy in this republic: vote. I know that's something you're just getting used to Smile

Under the Internal Revenue Code, all income of all variety may be subject to taxation. It's called the accretion of wealth test. It's only through the Code that we get to keep any portion of the wealth. Think of it this way: All the money you make would be taxed to some degree except when the Code excludes portions of it and provides opportunities to reduce your taxable income through deductions etc.

The top tier tax rate was over 63% since 1933. For may of the subsequent years that tax rate was 91% and later dropped to 70% until the 1981 Economic Recovery Act which dropped the max rate to 50% for a few years until Reagan's Tax Reform Act of 1986. From that point the max rate has hovered in the 30% range -as high as 39%.

90% target taxing is a tool of social taxation and not a function of raising tax receipts. It's similar to a sin tax on cigarettes and booze.
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MalibuGuru



Joined: 11 Nov 1993
Posts: 9300

PostPosted: Sat Mar 21, 2009 11:50 am    Post subject: Reply with quote

Dan, it is called ex-post-facto. In effect our founding fathers did not want legislators legislating after the fact. They were smarter than our current crop of morons who think the American people haven't read the constitution. It is their fault they didn't read the legislation they signed.
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isobars



Joined: 12 Dec 1999
Posts: 20935

PostPosted: Sat Mar 21, 2009 12:07 pm    Post subject: Reply with quote

DanWeiss wrote:
isobars wrote:
SNIP

The unconstitutional 90% tax-targeting of exec bonuses is a frightening example. If the Congress can just wave their hands and take back funds legitimately and contractually earned by any group BECAUSE IT'S THE POPULAR THING TO DO, what's to stop them from doing it to any pot of money they want, from Rush Limbaugh's to your IRA (as Pres Clinton tried to do with his 15% one-time levy)?
SNIP
Mike \m/


Mike: Please point out in a defensible way what part of the constitution prohibits the federal government from setting federal tax law. I think I can find language quite to the contrary.


Of course you can; that’s a lawyer’s job. When one side can’t find a valid contradiction to the other side’s claim, the latter side wins by default. I’ve used the approach you imply 8-10 times against lawyers -- bevies of them in some cases -- to win every time in issues ranging from a parking lot shopping cart nudge to 9-figure Pentagon weapons research funds (that one was a hoot and a significant coup for me, my unit, and national defense).

From http://tinyurl.com/djs47j ,
<Lawmakers outraged over the AIG bonuses have told the people who got the money to watch out -- the government will get it back one way or the other, even if it means taxing the heck out of their paychecks. But legal scholars say Congress will have a tough time defending itself in court if it goes down that road. Not only would Congress be retroactively meddling with contractual agreements, they say, but it would be passing laws that would essentially target a specific group of employees.

Jonathan Turley, George Washington University law professor, said targeting those employees through taxes would invite a valid court challenge. "It could well trigger years of litigation," he said. "Just because a company or individual is unpopular does not mean the government can retroactively impose punitive measures against them. ... There's a host of difficult contractual and constitutional and statutory barriers that would have to be overcome by Congress."

Two of those difficulties, lawyers say, lie in Article I of the U.S. Constitution -- a section stating Congress cannot pass any "Bill of Attainder" or "ex post facto" law. A Bill of Attainder is an act of the legislature that singles out and punishes a group or individual without trial. An ex post facto law retroactively changes the legal consequences of an act.>

I’ve seen dozens of lawyers, judges, and news and legal and economics analysts debate this for days, and their overwhelming -- nearly unanimous -- consensus concurs with the above … and the law suits Turley warns of are under way and far exceed AIG’s measly $218M exec bonus figure.

Of far more importance are the implications of an administration or a Congress passing laws, in reaction to populist demands, targeting a specific group of PEOPLE (as opposed to BEHAVIOR, such as smoking). Why (and legally, how?) AIG and not other bailed-out corporations? That’s where it goes off the legal rails. If the government can do this to AIG, it can do it to Oprah, Limbaugh, Buffett, Gates, our IRAs and estates, etc. as punitive or opportunistic raids on any pot of money they want or any individual or agency they don’t like. What citizen, entrepreneur, megacorp, or nation will ever again be foolish enough to trust any contract entered in the U.S.?

Mike
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DanWeiss



Joined: 24 Jun 2008
Posts: 2296
Location: Connecticut, USA

PostPosted: Sat Mar 21, 2009 1:57 pm    Post subject: Reply with quote

Mike, c'mon. It's one thing to take a certain position. Nobody -at least most- don't take issue with that even if they disagree vehemently. It's quite another to defend a position regarding a consitutional quesiton by suggesting you know better than someone who studies the law for a living. To be clear, I do not claim that my profession and practice concentration gives me much of a leg up on your insight. You are a very bright guy and quite able to analyze material.

If the IRS determines to pursue a particular tax rate on certain transactions that occurred in a tax year that preceded the signing date of the enabling legislation I believe that may be unenforceable. If the IRS decides to go after the bonuses paid after the beginning of the tax year in which the law is passed then those taxes are due without argument.

In any event, this is not a bill of attainder. A bill of attainder is a piece of legislation declaring a person or group of people guilty of a crime and punishing them without the benefit of a trial. Nothing in this proposed legislation declares the receipt or payment of a bonus a crime.

The controlling case is Nixon vs. Administrator of General Services, 433 U.S. 425 (1977) that established a three-prong test for determining whether a piece of legislation went afoul of the prohibition against bills of attainder. First, does that law impose a penalty traditionally held to violate Article I Clause 3; second, whether the law, viewed functionally in terms of the type and severity of burdens imposed, could rationally be said to further nonpunitive legislative purposes; and 3) whether the law had no legislative record evincing a congressional intent to punish.

Here, first, taxation is not considered by the court to be one of those penalties. Second, the target of the legislation is non-punitive because the clear intent of the legislation is to recover public money and to discourage such behavior in the future. It is important to note that the recipients of these bonuses are not asked to surrender all benefit. Third, and finally, the legislative record is dominated by clear expressions of outrage regarding AIG's determination to use gov't funds to pay bonuses rather than the employees unmitigated gall to accept these bonuses.
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isobars



Joined: 12 Dec 1999
Posts: 20935

PostPosted: Sat Mar 21, 2009 2:05 pm    Post subject: Reply with quote

DanWeiss wrote:
1. It's quite another to defend a position regarding a consitutional quesiton by suggesting you know better than someone who studies the law for a living.

2. Third, and finally, the legislative record is dominated by clear expressions of outrage regarding AIG's determination to use gov't funds to pay bonuses rather than the employees unmitigated gall to accept these bonuses


1. I never thought, suggested, or implied that. That's why I based my comments on "dozens of lawyers, judges, news and legal and economics analysts, and a specific named law professor." They trump any one lawyer, IMO.

2. A Republic is not and should not be driven by public outrage or mob rule. It is/should be driven by rule of law. And how is it "gall" to expect and accept what's earned and contractually obligated? Those who returned their whole bonuses after Liddy asked them to refund half should be publicly lauded, not scorned.

Mike
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swchandler



Joined: 08 Nov 1993
Posts: 10588

PostPosted: Sat Mar 21, 2009 3:37 pm    Post subject: Reply with quote

Hey, what happened to isobars' shaka in the last two posts?

Dan, as civil and balanced as you always are with isobars, I think that he's giving you a signal that he really doesn't wish you the best in his responses.
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