Is the Bonus Tax Unconstitutional?

Posted on Wednesday, March 25, 2009 at 10:32 pm

richard-epstein.jpgRichard A. Epstein: The AIG bonuses were made pursuant to valid contracts entered into before the receipt of the bailout money. They were ratified in the legislation that provided for the bailout, and efforts to find loopholes in these contracts have proved unavailing. Thus any sensible system of limited government should consider the proposed bills unconstitutional. Special taxes on some forms of income (but not others) and retroactive taxes put in place after business transactions are complete both merit strong condemnation. The bills in Congress are rife with both elements. See here.