The "Geithner Plan" -- I'm not impressed

[Caveman_Nick]

There is some language in a few Supreme Court cases that say certain taxation, in theory, could be unconstitutional. But it would have to rise to the level of: (1) targeting a protected class (i.e., race, religion, national orgin, age, etc); or (2) would have to amount to a "taking" of property without due process such that it would fall under eminent domain jurisprudence. But a century of US Supreme Court case law states unambiguously that taxation may be retroactive. Congress doesn't "like" to do that because its unpopular; but make no mistake, they have that power and everyone who has ever fought against it in court has lost.

 

Yo, are you aware of any cases in the Supreme Court that deal with "punative taxation"? I think a case could be made for this here, especially considering the tax being levied targets a specific group of people and for a specific cause.

[TimC]

I think EVERYONE would prefer to see that happen--please help facilitate this process by posting links to the 12,467,000 needed job openings for these shovel workers.

 

There would be if we didn't have a revolving door for our border down South. We could take everyone on welfare and have them doing it instead. There are enough jobs for everyone who needs work....it may not be the job you want to do, of course. And there's the rub.

[Savage Beatings]

i have some weeds in my backyard.....

 

racist

[Perchoutofwater]

I emailed my House representative before the first bailout and told her if she voted for it I'd never vote for her again. The email response I got from her said "thank you for your support."

 

See I really like my representative. He didn't vote for the bail out, he didn't vote for the stealfromus bill, and he didn't vote for this stupid tax on bonuses. He calls me about once every other month for conference call type town hall meeting where he not only explains himself but asks for suggestions and appears to genuinely listen. I haven't looked over his entire voting record, but glancing over it the other day I didn't see a single bill he voted on differently than I would have. When I heard how many republicans voted for this stupid tax, I was real quick to check to see if my guy did, and he didn't.

[yo mama]

Yo, are you aware of any cases in the Supreme Court that deal with "punative taxation"? I think a case could be made for this here, especially considering the tax being levied targets a specific group of people and for a specific cause.

None that succeeded. Commentators seems to think that, even if retroactive, the broader the applicability of the tax the less vulnerable it is to attack. However, we've yet to see a retroactive tax that was so narrow in focus that it violated any constitutional requirements. The fact of the matter is that that the 16th Amendment does not contain any limiting language: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." Therefore, unless some other protection were to be involved (like the Equal Protection Clause, assuming the tax was imposed only on blacks, jews, people over 45, etc.) then legislation need only pass the "rational basis" standard of review. That's pretty much any stated reason that Congress pulls out of its ass.

[Caveman_Nick]

None that succeeded. Commentators seems to think that, even if retroactive, the broader the applicability of the tax the less vulnerable it is to attack. However, we've yet to see a retroactive tax that was so narrow in focus that it violated any constitutional requirements. The fact of the matter is that that the 16th Amendment does not contain any limiting language: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." Therefore, unless some other protection were to be involved (like the Equal Protection Clause, assuming the tax was imposed only on blacks, jews, people over 45, etc.) then legislation need only pass the "rational basis" standard of review. That's pretty much any stated reason that Congress pulls out of its ass.

 

In this case wouldn't the tax be levied on a specific list of people? Maybe I am misunderstanding something. but I would think that would be just as discriminatory as levying a tax just on jews.

[yo mama]

In this case wouldn't the tax be levied on a specific list of people? Maybe I am misunderstanding something. but I would think that would be just as discriminatory as levying a tax just on jews.

People (including the government) can discriminate against anyone they want, EXCEPT for people of a protected class. That's gender, race, religion, national origin, and age (over 45). Even then, Congress would merely be subject to a higher "strict scrutiny" standard. In that case, Congress must show that the law is "necessary" to promote a "compelling" governmental interest. The same would be true if the proposed legislation affected a "fundamental right," such as the right to marry, child-rearing, birth control, etc. Economic rights have not previously been deemed a "fundamental right," but some commentators believe that legislation specifically targeting one's chosen vocation could, in theory, ring the bell. Even so, that would only subject the legislation to the "strict scrutiny" standard, which Congress might be able to meet here.

Edited March 23, 2009 by yo mama

[Caveman_Nick]

People (including the government) can discriminate against anyone they want, EXCEPT for people of a protected class. That's gender, race, religion, national origin, and age (over 45). Even then, Congress would merely be subject to a higher "strict scrutiny" standard. In that case, Congress must show that the law is "necessary" to promote a "compelling" governmental interest. The same would be true if the proposed legislation affected a "fundamental right," such as the right to marry, child-rearing, birth control, etc. Economic rights have not previously been deemed a "fundamental right," but some commentators believe that legislation specifically targeting one's choose vocation could, in theory, ring the bell. Even so, that would only subject the legislation to the "strict scrutiny" standard, which Congress might be able to meet here.

 

Thanks. Very helpful.

 

I don't agree with the legalities of this, but it's helpful to understand what they are

[yo mama]

Thanks. Very helpful.

 

I don't agree with the legalities of this, but it's helpful to understand what they are

Frankly, I previously thought the law abhorred retroactive taxation. I spent an hour Friday night researching the point because I thought for sure there would be *some* Constitutional limitations. I was a little frightened to learn there are basically none. But hey, I guess it beats living in Rwanda.

[driveby]

Frankly, I previously thought the law abhorred retroactive taxation. I spent an hour Friday night researching the point because I thought for sure there would be *some* Constitutional limitations. I was a little frightened to learn there are basically none. But hey, I guess it beats living in Rwanda.

More outrage: A refresher course on the Constitution is in order for Congress, which seems collectively to have forgotten Article I, Section 9, paragraph 3, which provides: "No bill of Attainder or ex post facto Law will be passed."

 

Nevertheless, our "outraged" Congress seems ready to pass a bill retroactively taxing the AIG bonuses. The website techlawjournal.com quotes James Madison's Federalist Paper No. 44, "Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation."

 

Perhaps we are too hasty in prescribing an constitutional refresher course. It is apparent many in Congress never have read the Constitution at all. Otherwise they wouldn't pass laws sure to embroil the state in costly, and losing, litigation.

 

Either that or – dare we say it? – they're grandstanding. We dare.

 

[Ursa Majoris]

Problem is that this isn't a bill of attainder nor a ex post facto law, in the proper sense.

[yo mama]

Problem is that this isn't a bill of attainder nor a ex post facto law, in the proper sense.

Correct. Bills of attainder and ex post facto restrictions are concepts that apply only to criminal laws.

Edited March 23, 2009 by yo mama

[Perchoutofwater]

Correct. Bills of attainder and ex post facto restrictions are concepts that apply only to criminal laws.

 

This is why we need to have a constitutional amendment banning the income tax, and setting up a sales tax.

[yo mama]

This is why we need to have a constitutional amendment banning the income tax, and setting up a sales tax.

Any system of taxation is capable of being manipulated or enforced for ill-purpose. While the "Texas" model of revenue collection certainly has its merits, the current AIG bonus fiasco doesn't strike me as supporting one revenue collection method over another.

[westvirginia]

Didn't slick willie pass a retroactive tax increase in '93 or '94?

[wiegie]

Interesting compilation of econ-bloggers on the Geithner Plan:

 

http://opinionator.blogs.nytimes.com/2009/...toxic-reaction/

[Avernus]

that was before the usg decided to print dollars at the rate they are. the us dollar will be worthless.

 

finally people are starting to come around...

 

commodity gold is the way to go, I think...

 

I still believe this North American Union has already been set in place even though I'm getting the sense that most of you here don't think that's possible or that it's a myth...

 

the writing is on the wall..

[yo mama]

Interesting compilation of econ-bloggers on the Geithner Plan:

 

http://opinionator.blogs.nytimes.com/2009/...toxic-reaction/

That was an interesting read. Thanks for posting it.

[Avernus]

That was an interesting read. Thanks for posting it.

 

+2

[Azazello1313]

 

Irony -- geithner's plan has unregulated institutions bailing out regulated ones.

[Perchoutofwater]

How does this plan differ from what was proposed by the Bush Administration last year, aside from having wasted close to a trillion dollars on needless government expansion prior to enacting it?

[Pope Flick]

I'm beginning to think that the more Wall Street approves of a plan, the worse it is for the rest of us. They're holding the country hostage, threatening to take down everyone if they get taken down as well.

 

At least that's the sense I'm beginning to get.

[Jimmy Neutron]

Just heard on a local radio new show that Geithner testified before the CFR today that he would not be "directly opposed" to the creation of a new world currency.

 

Russia and China asked for one this week, no? The upcoming G20 summit may be newsworthy.

[TimC]

How does this plan differ from what was proposed by the Bush Administration last year, aside from having wasted close to a trillion dollars on needless government expansion prior to enacting it?

 

Because it has Obama doing it and therefore that makes it okay.