Monday, March 23, 2009

Obama: Bonus Tax Unconstitutional

From the Associated Press account:

WASHINGTON (AP) — President Barack Obama wagered significant political capital Sunday, signaling opposition to a highly popular congressional drive to slap a punitive 90 percent tax on bonuses to big earners at financial institutions already deeply in hock to taxpayers.

Obama defended his stance by saying the tax would be unconstitutional and that he would not "govern out of anger." He declared his determination, nevertheless, to make Wall Street understand it must shed "the old way of doing business."

The related Politico article expounded on this a bit more:

Still, Obama would not endorse legislation moving through Congress to tax nearly all the bonuses of executives at AIG. Asked if the measure is constitutional, the former law professor said: “Well, I think that as a general proposition, you don't want to be passing laws that are just targeting a handful of individuals…And as a general proposition, I think you certainly don't want to use the tax code—is to punish people.”

“So let's see if there are ways of doing this that are both legal, that are constitutional that uphold our basic principles of fairness, but don't hamper us from getting the banking system back on track,” Obama said.

The key words here are "targeting" and "punish" which is the basis of the strongest Constitutional argument against this tax that troubled me from day one:

It's hard to say with any certainty what the final language of this proposal may be, if it even gets off the ground to begin with, but from the attitude and descriptions thus far it seems set to become a legal battle over whether it violates this part of Article I, Section 9 (the section that states specific limits of legislative authority) of the Constitution:

No bill of attainder or ex post facto Law shall be passed.

For a quick refresher for those who may have forgotten (perhaps Dodd himself?)

bill of attainder: a legislative act that imposes punishment without a trial

In other words: this could get interesting.

Obama seems to at least recognize that this legislation is on shaky ground, even if he may be able to eventually win in drawn out court battles finding loopholes in precedent, that the precedent being set could be a dangerous one. I've always found one of the sure fire ways of testing whether one truly believes a government power is necessary is to contemplate how it may be abused by your political opponents when the election cycles change to their favor again.

With Bush setting the precedent on signing statements that essentially pass what he felt were unconstitutional provisions of bills into law as "advisory" now being fully executable by the Obama Administration, would his die hard supporters still defend the practice? Will they, only now, hypocritically criticize Obama for doing the same thing with signing statements? What good would it do? People would treat it as partisan posturing, as laughable to their political opponents as their born again faith in fiscal responsibility... after years of self-serving pork projects and funding their own agenda with mass deficits while in power. Now the other guys have the ball and they claim they've 'seen the light' when all it comes off as is wanting to block the other side from doing the same stuff they'd pull if they hadn't gotten the boot.

Unfortunately for independents who prefer a stricter adherence to the Constitution, both major parties in our country are far too self-serving to come off as much more than hypocrites vying for power and changing their tune endlessly to that end at the expense of the document they swear to uphold.

In a rare example, President Obama is bucking the trend and asking the mob to simmer down and respect the founding document, as he puts it, at the expense of some political capital. It's more than a bit sad that such a notion should cost any of our elected leaders political capital.

Thank you, Mister President for the reminder, as unusual and probably brief, it may be.

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