Is Taxing AIG Legal?
Conor Clarke agrees with me that taxing AIG bonuses amounts to an unconstitutional bill of attainder (although I think non-criminal legislation doesn’t technically qualify). Clarke takes the additional step of interviewing Laurence Tribe, one of the country’s foremost legal minds, on the subject and gets the preliminary answer that, “It would not be terribly difficult to structure a tax, even one that approached a rate of 100%, levied on some or all of the bonuses already handed out (or to be handed out in the future) by AIG and other recipients of federal bailout funds so that the tax would survive bill of attainder clause challenge.” There’s more at the link, including a PDF’d note from Tim Lee.
As I noted on last night’s OTB Radio, the Supreme Court has frequently neutered provisions of the Constitution through ridiculously narrow interpretation. The Self-Incrimination and Double Jeopardy Clauses are classic examples but there are many others. That doesn’t make it morally right or in accordance with the views of the Framers, of course, but it satisfies Justice Brennan’s Rule of 5 (the Constitution means whatever a majority of the Supreme Court says it means).
With respect to the AIG bonuses, however, a much more pragmatic issue exists: Most of those receiving said bonuses are citizens of the UK who live and work in the UK. How the United States Congress proposes to tax them is anyone’s guess.