I never thought we would live in a United States where the government, on a dime, would shred the Constitution in order to punish a select group of people.  Yet that is what occurred today.

The House just passed a bill that would “levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.”  That’s a long-winded way of saying that the bill will levy a 90% tax on the $165 million in bonuses paid to AIG employees this past week.

Some have wondered in recent days (including me) whether such a law (if it ultimately becomes law) is constitutional. 

It probably isn’t.  A court could strike down this law as an unconstitutional bill of attainder.  At best, the law raises serious constitutional questions.

What is A Bill of Attainder?

Article I, Section 9 of the U.S. Constitution states that “[n]o Bill of Attainder or ex post facto Law will be passed.”

A “bill of attainder” is a legislative act that singles out an individual or group of individuals for punishment without a trial.

In a case called United States v. Brown, 381 U.S. 437 (1965), the United States Supreme Court stated that “[t]he Bill of Attainder Clause was intended . . . as an implementation of the separation of powers, a general safeguard against legislative exercise of the judicial function or more simply – trial by legislature.”  Id. at 440.  It “reflected the Framers’ belief that the Legislative Branch is not so well suited as politically independent judges and juries to the task of ruling upon the blameworthiness, of, and levying appropriate punishment upon, specific persons.”  Id. at 445.

Instead, “[i]t is the peculiar province of the legislature to prescribe general rules for the government of society; the application of those rules to individuals in society would seem to be the duty of other departments.”  Id. at 446.    

Giving the Bill of Attainder Clause a broad reading, the Court stated that a “bill of attainder may affect the life of an individual, or may confiscate his property, or may do both.”  Id. at 447.  Thus, “the Bill of Attainder Clause . . . was . . . to be read in light of the evil the Framers had sought to bar: legislative punishment, of any form or severity, of specifically designated persons or groups.” 

Citing earlier cases, the Court stated that “[l]egislative acts, no matter what their form, that apply either to named individuals or to easily ascertainable members of a group in such a way as to inflict punishment on them without a judicial trial are bills of attainder prohibited by the Constitution.”  Id. at 448-49.

Based on this language and other cases, the House bill could face some serious constitutional scrutiny. 

The House Bill Could Be Viewed as a Bill of Attainder

What is this bill if not a form of legislative punishment?  My old law professor thinks that a broadly-worded bill would be enforceable.  Sure, it may not name the individual AIG employees, but its specific parameters certainly single out ”easily ascertainable members of a group.”  

Moreover, I agree that the bill represents a form of punishment.  The Supreme Court, in Nixon v. Administrator of General Services, 433 U.S. 425 (1977), defined “punishment” as, among other things, “the punitive confiscation of property by the sovereign.”  Id. at 474.

The Court further explained that a “punishment is not restricted purely to retribution for past events, but may include inflicting deprivations on some blameworthy or tainted individual in order to prevent his future misconduct.  This view is consistent with the traditional purposes of criminal punishment, which also include a preventive aspect. . . . Brown left undisturbed the requirement that one who complains of being attainted must establish that the legislature’s action constituted punishment, and not merely the legitimate regulation of conduct.”  Id. at 476 n.40.

There is no doubt that this House bill inflicts a level of “deprivation” (monetary in this case) on the ”blameworthy or tainted” AIG employees who accepted bonuses.  It does both, “affect the life of an individual” and “confiscate his property.”  A near-100% tax on a bonus payment is confiscatory, punitive, and affects one’s life because those payments were expected based on contracts freely negotiated and agreed to over a year ago.

Instead of focusing on the economy or going back to business as usual (i.e., “the legitimate regulation of conduct”), Congress has decided to confiscate the earnings (whether deserved or not) of these employees.  It’s a shoot-from-the-hip move designed to remedy the shortsightedness of these politicians and their stupidity in passing a $700 billion “stimulus” bill that no one read.

Even if this bill is constitutional and passes muster in court, Congress has set a dangerous precedent today.  If Congress can single out a group of people and punish them monetarily, there is no telling who or what this administration will target next and how it will do it.

Hold on to your wallets.  

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