"Constitutional question." Topic

The Contract Clause appears in the United States Constitution, Article I, section 10, clause 1. It states:

" No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Do the provisions in bold type apply to the Congress, too? Yes, I am talking about the AIG bonuses. It seems to me that trying to punitively get them back by law violates all three. However, the "Contract Clause" seems to me to only prohibit any STATE from doing so.

Please note that I am NOT asking for a rant about vultures or posturing blowhards. THAT is indeed Blue Fez territory. I am merely asking about the Constitutionality of CONGRESS retroactively collecting 100% tax on the bonuses.

Oh, well. Duck and cover…

Hmmmm.

Section 10 prohibits CONGRESS thus: "No Bill of Attainder or ex post facto Law shall be passed."
But, I am still looking for Congress and contracts.

Congress could pass a law that takes effect on all income earned this year. They could go ahead and set the tax at 100% on all bonuses over 100,000.00, which I think in the main would be a good idea for the entire country,not just the AIG people. Part of the problem is that some of the people who got the bonuses are foreign employees that don't pay income tax.

I wonder if we could go ahead and tax the companies on salaries, bonuses, and other sorts of income paid to foreign employees.

They'll find a way to justify it. Have no fear.

Or rather, have a lot of it. What they can do to AIG execs, they can do to you. Remember that.

Well, from what I read this morning, Congress may impose a 35% excise tax on salaries and bonuses over a certain amount, so I guess they can tax the companies on foreign salaries.

I don't think it's specifically prohibited in the Constitution.

I think it would be a very bad idea.
-Kle.

Whatever they do, it will still be an ex post facto bill of attainder.

Or rather, have a lot of it. What they can do to AIG execs, they can do to you. Remember that.

why I'm watching this.

Spurred by the anti-AIG anger, congressional Democrats, moving swiftly, unveiled legislation Wednesday to put new taxes on executives working at any firm receiving at least $5 USD billion in federal assistance. The legislation would impose a 90% surtax on payments made to executives and high-earning employees, effective retroactively to bonuses paid after Dec. 31, 2008.

it appears they are already doing it.

Whatever they do, it will still be an ex post facto bill of attainder.

I'm with you on that.

if they hadnt limited the amount of money that executives could be paid in the first place, there wouldnt be all these underhanded methods of rewarding mediocrity.

No one limited the amount executives could make. I don't know where you got that idea. A company can pay it's employees whatever it wants to pay. In the case of the AIG people their salary and bonuses are set out in their contracts. I did hear/read somewhere that several of the people involved in the mess had agreed to take $1.00 USD a year in return for receiving their bonuses before this started.

No one limited the amount executives could make. I don't know where you got that idea. A company can pay it's employees whatever it wants to pay. In the case of the AIG people their salary and bonuses are set out in their contracts. I did hear/read somewhere that several of the people involved in the mess had agreed to take $1.00 USD USD a year in return for receiving their bonuses before this started.

I think what Ravenscraft is referring to is that business aren't allowed to deduct executive salary expenses above a set amount ($500,000, I believe), courtesy laws passed in 1993. This act led to the practice of paying executives in stock options and bonuses, which the law doesn't cover. (Which is why companies are more than happy to agree to the "$1 salary" deal.)

The pathetic thing is that all the AIG bonuses amount to less than 0.1% of the bailout money given to the company. Would someone please ask questions about where the remaining $164-some-odd billion is going? Maybe we should be trying to get that back, and look at the paltry $165 USD million as payment for a lesson learned. :-P

And that's enough from me about that, because this isn't the Blue Fez.

The bill to impose penalties was just defeated. It had over 300 votes, but some 75 members changed their votes. Perhaps, SOME congress-critters had an attack of Constitutional remorse? I hope so. We have been sadly lacking in such regard for years now.
I can't remember ever hearing anyone voting against something because it was unconstitutional. Not since my youth, back in the 1820s. 8^)

EDIT. No, I got that wrong. A Bill to condemn AIG was defeated. That's unconsitutional, too, by the way.
No, congress is still busy raping the corpse…

Congressman Kanjorski's office was rather snotty, insisting that it was "just a tax bill".

I believe AIG sent the list of companies they paid with the bailout money to both the Feds and the State of New York. I haven't seen the list, but the NYT announced it had been done.

I am with the OFM on constitutionality. Anything further I would say would be Blue Fez territory

Congressman Kanjorski's office was rather snotty, insisting that it was "just a tax bill".

Did you point out that was basically Parliament's response to the colonies in 1773?

Personally, I think there is some Wagging of the Dog going on…..

John is right. This is clearly a violation of the constitution, and this whole mess ought to scare the hell out of everyone. This is why AIG should have been forced into Chapter 11 and reorganized by the government. Once you are in chapter 11, the courts and the congress could have negated all of those contracts. Seeing as they botched the whole thing, they are now trying to fix the problem by violating the constitution. A government managed takeover under chapter 11 would have solved this whole mess. Each of ought to think of this when GM and Chyrsler ask for more bailout money. Do we really want our government creating special laws designed to nail one particular group? It may also violate equal protection clause.

My favorite moment in this whole thing was when a certain Senator, musing on possible "solutions," said, "Well, we don't want to end up taxing ourselves."

No, of course not.

Not, apparently, that you pay taxes anyway.

If we're going to talk about what they should have done, then they obviously should have let the economy crash hard, and not even contemplated bailouts.

The only check upon capitalism is the risk of failure. What the hell did they expect, when they told these incompetent swindlers that they couldn't be allowed to go out of business? Gee, you mean we can do whatever we want, and the Feds will just give us money? Scratch of head…
-Kle.

how about if they didn't give all these banks and investment companies the money in the first place?

really.

Many Americans were/are in debt. the banks weren't able to give out anymore loans to those who had any other income. People were starting to live off loans and not work income because they got laid off.

so… if the banks collapsed, wouldn't all the debt go away?

another thing, do we really need all those banks?

why not forgive/waive most or all of the debt Americans have instead of buying the debt from the banks? I still owe money. So does my neighbor and his neighbor. My parents are in debt, so are my Girlfriend's parents and their friends.

why not press that big red 'restart' button on all this?

can't we revamp the credit score system so it isn't so insane?

I'm not really ranting or Blue fezzing here. I'm calmly typing away without anger or frustration.

honestly, the banks and execs and the automakers should have never gotten the money. they should have fallen and gone under just like all the small businesses in my town. just like my Dad's business and everyone's else's business.

ok I'm done.

oh and I agree with Klebert. if we supposedly lived in a 'true' capitalist society, then those banks should have shut down last year. along with GM and Chrysler.

now I'm done.