I get that people are upset that the executives now getting bonuses, but are people really willing to allow the government to break contracts and retroactively tax a select few at 90%, just to appease mob rule? What happens when the government decides that a certain other group is "making too much money"? Is no one else concerned that Bawney Fwank said, "The time has come, for us to take over the company!" Are we really heading down this road of having the government step in whenever people are upset about "making too much money?"
And just as an aside, if congress had written in something into their original bill about curtailing bonuses (before AIG accepted the $), that would be a completely different story IMO.
Would an AIG-Bonus Tax Pass Constitutional Muster? (A Tribe Calls ‘Yes!’) - Law Blog - WSJ
The most current proposal: tax the bejeezus out of the recipients. Senate Majority Leader Harry Reid and other congressional Democrats have proposed a 91 percent tax. There are problems with this, too. The NYT writes that some of the AIG employees are thought to be foreigners based in offices abroad and not liable for U.S. taxes.
But could such a tax also run into Constitutional problems? Some pundits (for example, here and here) have suggested yes. The most commonly mentioned difficulties include the prohibitions on so-called Bills of Attainder and retroactive laws (laws passed Ex Post Facto) mentioned in Article I, Section 9 of the Constitution. Other possible problems brought to our attention deal with the Contract Clause of the Article I, Section 10; the Due Process Clause of the Fifth Amendment; and the Takings Clause of the Fifth Amendment.
For a little help with this, we turned to Harvard’s Laurence Tribe, he of the canonized treatise “American Constitutional Law.” In an email exchange, we asked Tribe to address each of the five possible constitutional problems and he determined none of them likely poses a problem.
lifted from the "comments" is a pretty good response to the harvardite cited in the article.
are 1) the whole point of this law would be *not* to “pass a . . . broad law” but one that “target[ed] a closed class.” Just because the executives aren’t named, if the legislation in practice served only to strip a couple hundred execs of their bonuses, it seems that it could be vulnerable to a Bill of Attainder challenge. 2) even though a tax is generally not a taking, when you are taxing at a rate approaching 100% it seems that the courts similarly would have to consider looking through the nominal character of the act to its practical effect. Otherwise, the next time it needed to build a road through my house, my state could decide that it was necessary to levy a 95% “tax” on my house and use that as leverage to take my house without providing just compensation.
I think Tribe is looking at this from too abstracted a viewpoint: If Congress passes a law that, in effect, simply yanks these bonuses, there are serious questions about that act’s legitimacy.