The national outrage ginned up by politicians, and their enablers in the media, over the AIG bonuses has been used to create a very dangerous weapon; The Retro-Active Punitive Tax.
The awarding of the bonuses in this economic environment was a bone-headed move by AIG, but perfectly legal, thanks to the Democrat Congress and the B. Hussein administration. Language allowing this type of bonus was inserted in the 'Stimulus' package by Senator Chris Dodd (d) at the behest of someone in the Obama administration. That someone has yet to be determined with any certainty, but it is clear it was not a Republican since all Republicans were completely shut out of the writing of this legislation. This is a wholly owned mess of the Democrat congress and they have no where to run, and as the facts come out, less places to hide. They are in classic circular firing squad mode and provides this observer great entertainment!
Don't be fooled by the displays of congressional outrage and finger-pointing. This is largely an exercise in theatrics because lawmakers missed the boat the first time around. They knew about the bonuses in December, when AIG gave out $55 million in the first round of "retention" bonuses. AIG did not try to had these legal bonuses, they were even disclosed in their required Securities and Exchange Commission filings in September. But for a Congress who does not read their own legislation, why would they read an SEC filing?
The response to the public outrage to these bonuses resulted in hasty action (punative retro-active taxation) by the US Congress that doesn't make any sense. Experience shows that legislation forged in haste amid the swirl of headlines and theatrical hearings tends to produce bad policy, of which this is a perfect example.
Using the tax code as a weapon to exact revenge on a select few, no matter how badly they've behaved, is a horrible, frightening and dangerous idea. Slapping heavy taxes on the bonuses and on the company that issued them may satisfy the initial rage of taxpayers who see incompetent executives being reward for failure, but it sets a bad precedent. The bill aims at sanctioning supposedly bad people by confiscating their earnings. As such, it flies in the face of something the Constitution expressly forbids -- a bill of attainder, which is a punishment of particular individuals imposed not by a court of law but by a legislative body.
If this legislation is allowed to stand, the precedent is set for a vengeful Congress to willy-nilly decide that anything they do not like, be it action, item or idea, can be retro-actively taxed out of existence. For example: Some future wild-eyed, mouth-foaming Congress (it might well be this one) could decide to slap a retro-active tax of 90%-100% or more on all gun owners on the value of the guns. Or how about a retro-tax on all SUV owners in the name of a 'green' warm-and fuzzy feeling? Hopefully, when this monstrosity reaches the US Senate, cooler heads will prevail, but that may be too much to hope for.
There are better ways to channel taxpayers' anger at incompetence and greed. The place to start is the incompetence and greed of the US Congress, members of both parties! This bunch makes corporate America look like a bunch of pikers in the incompetence and greed department. It is time for action, swift and certain, or we will lose the greatest nation on earth. There is a revolution coming and it is necessary. Our current governance is out of balance and must be restored somewhere between socialism and anarchy.
Socialism seems to hold that the State is everything, the Individual nothing - or at best only a cog in a vast machine, an atom in an indistinguishable blur. Anarchy makes the State nothing, and the Individual everything - each a law unto himself, and chaos at the end. Between the two lies the way of wise government. There are certain things which every man must surrender in behalf of the common good, and other things which it would be a sin to abdicate. Therein lies the balance we are missing today. The balance we should seek is a free and representative republic with competent and moral representatives. Something that is in very short supply in Washington today.
The revolution starts with the 2010 mid-term elections!
