The House passed H.R. 1586 today. The bill would levy a 90% tax on the AIG retention bonuses just issued. Is H.R. 1586 an unconstitutional bill of attainder, as some have claimed? I seriously doubt it.

Article I, section 9, clause 3 of the Constitution provides:

No Bill of Attainder or ex post facto Law shall be passed.

A bill of attainder is a law that imposes punishment or retribution on certain, named individuals or a closed class of individuals. With language of sufficiently general applicability, Congress could claw back the AIG bonuses without running afoul of the Bill of Attainder Clause. H.R. 1586 targets employees or former employees of TARP recipients. I think that’s an open class—especially if TARP funds are still being distributed. It’s not just AIG employees, and not just past bonus recipients, who are within the bill’s reach.

Some members of Congress have expressed concern about the bill’s retroactivity. (See the Times story linked above.) But would this tax really be retroactive? The tax won’t be owed until April 15, 2010, for any bonus paid after December 31, 2008. And moreover, the Ex Post Facto Clause only prohibits retroactivity in criminal, or punitive statutes. Even a 100% tax on bonuses like these would not likely be considered punitive. The government here is acting not in a law-enforcement mode, but in a regulatory mode, trying to effectively and responsibly spend public dollars to stimulate economic recovery.

This entry was posted on Thursday, March 19th, 2009 at 9:50 pm and is filed under Legislative. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.