House Passes Bill to Tax Back Most of The AIG Bonuses

The House has passed a bill to tax back most of the AIG bonuses that have been the focus of recent outrage. I spoke about the issue before at Berman Post: Santelli on The AIG Bonuses (Plus my Thoughts). Yes, it is boarder line insanity that people who drove their company into the ground should get bonuses. That said, in this country we respect the rule of law and part of that is the enforcement of contracts.

While there was some discrepancy between the political parties the Republicans were not lining up to fight it. Democrats voted for the measure 243 to 6, while the Republicans voted for it 85-87. The final vote was 328 for to 93 against.

As I said before, we should all be frightened that the government would even think about specified punitive taxes. There are a few legal issues here. Is this a bill of attainder, is the punitive tax rate passed (90%) violate takings law), and the specific targeting of people. Will these issues end up blocking this effort, or will they only provide some guidelines for a legal work around? No one can tell you the answer right now. All I have left to say on the matter is that as frightened as we should be that they are trying it, imagine if they succeed.

More at http://finance.yahoo.com/news/House-passes-bill-taxing-AIG-apf-14693850.html.