The Precedent of Punitive Taxation

The House of Representatives voted today on a bill to tax bonuses of executives at companies that received bailout money at a rate of 90%.  The Senate wants to apply that tax to anyone from the same companies making more than $100,000 in bonuses.  Republicans won’t be getting a pass on this one, they are just as guilty.

There are several problems with this tactic.  The first problem is the precedent it sets for Congress to apply punitive taxes to anyone it dislikes.  Right now it is companies that took the bailout money, we won’t even consider Wells Fargo that said they didn’t want the money but were forced by the government to take it anyway.  These companies are on the general public’s S*** List, so it has public support right now.  The problem is that it does set a precedent, and once that precedent is set there is no unsetting it.  If this passes the government is free to apply punitive taxation to anyone it wants.  I wonder how many conservatives will be utterly surprised when the Democrats that are in charge now decide to apply a punitive tax on them for opposing the Dems’ will.  How many liberals will scream foul when the Republicans are in control again and do the same to them?

The next problem with this bill is the attack on contractual law.  Those employees were guaranteed a certain amount of revenue from the companies in question.  The bonuses completed the companies contractual obligation in this matter.  Now Congress wants to override contractual law, again a dangerous precedent.  When this passes, Congress can override any contract it doesn’t like, not totally dissimilar to the card check program that would force companies to “deal” with unions, in a way the the unions and a union-loving-government desire.  It redefines “contracts.”  It gives the government control over contracts and allows them to decide what contractual obligations will be, regardless of what the parties involved decided.

The third major problem is the tactic of “retroactive” taxation. 

Rest assured, this bill will come back to bite us all.  It is just one more step to communism.  While it can be expected from the Democrats, I, for one, am highly dissapointed in the Republicans that are going along with this farce for plotical expediency.