By LawReader Senior Editor Stan Billngsley March 19, 2009
The media is throwing around the theory that a retroactive tax bill is a Bill of Attainder which is prohibited by the U.S. Constitution.
There is a large body of law which holds that retroactive tax laws, and tax breaks are not ex post facto laws, and are constitutional.
See:
Nationsbank of TX v. U.S., 269 F.3d 1332 (Fed. Cir., 2001) October 30, 2001
“Although the tax code does contain many provisions eventually subjecting recalcitrant taxpayers to criminal liability for refusing to pay taxes, the entire tax code was criminal in nature. If the entire tax code was criminal, every retroactive tax law would become an unconstitutional ex post facto enactment. To the contrary, the Supreme Court has acknowledge Congress’ constitutional authority to enact retroactive tax laws. See, e.g., United States v. Carlton, 512 U.S. 26,114 S.Ct. 2018,129…”
Rocanova v. U.S., 955 F.Supp. 27 (S.D.N.Y., 1996)
“When faced with due process challenges to retroactive tax legislation, the Supreme Court “repeatedly has upheld” the legislation. United States v. Carlton, 512 U.S. 26, 30, 114 S.Ct. 2018, 2021, 129 L.Ed.2d 22 (1994) (citing United States v. Hemme, 476 U.S. 558, 106 S.Ct. 2071, 90 L.Ed.2d 538 (1986); United States v. Darusmont, 449 U.S. 292, 101 S.Ct. 549, 66 L.Ed.2d 513 (1981); Welch v. Henry, 305 U.S. 134, 59 S.Ct. 121, 83 L.Ed. 87 (1938); United States v. Hudson, 299 U.S. 498, 57 S.Ct. 309, 81 L.Ed. 370 (1937); Milliken v. United States, 283 U.S. 15, 51 S.Ct. 324, 75 L.Ed. 809 (1931); Cooper v. United States, 280 U.S. 409, 50 S.Ct. 164, 74 L.Ed. 516 (1930)).
The standard applied in determining the validity of retroactive tax legislation under the Due Process Clause is whether “`retroactive application is so harsh and oppressive as to transgress the constitutional limitation.’” Carlton, 512 U.S. at 30, 114 S.Ct. at 2022 (quoting Welch, 305 U.S. at 147, 59 S.Ct. at 126). Under the “harsh and oppressive” standard, retroactive tax legislation will be upheld if the government can show that “the retroactive application of the legislation is itself justified by a rational legislative purpose.” Id. (quoting Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 730, 104 S.Ct. 2709, 2718, 81 L.Ed.2d 601 (1984)).”
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The Ex Post Facto provision of the U.S. Constitution is in the same phrase as Ex Post Facto laws. Most definitions we have found suggest that a Bill of Attainder applies to crimes and not to taxes. A tax (unless it is a punishment) is not a criminal offense.
The proposed legislation being considered, and which passed the House today, applies to all companies which have accepted bailout money and is limited only to bonuses above $200,000. Plus the tax is not 100% but only 90%. Up until the Kennedy Presidency, the top income tax rate in the U.S. was 90%.
Definition: Bill of Attainder
A legislative act that singles out an individual or group for punishment without a trial.
The Constitution of the United States, Article I, Section 9, paragraph 3 provides that:
“No Bill of Attainder or ex post facto Law will be passed.”
“The Bill of Attainder Clause was intended not as a narrow, technical (and therefore soon to be outmoded) prohibition, but rather as an implementation of the separation of powers, a general safeguard against legislative exercise of the judicial function or more simply – trial by legislature.” U.S. v. Brown, 381 U.S. 437, 440 (1965).
“These clauses of the Constitution are not of the broad, general nature of the Due Process Clause, but refer to rather precise legal terms which had a meaning under English law at the time the Constitution was adopted. A bill of attainder was a legislative act that singled out one or more persons and imposed punishment on them, without benefit of trial. Such actions were regarded as odious by the framers of the Constitution because it was the traditional role of a court, judging an individual case, to impose punishment.” William H. Rehnquist, The Supreme Court, page 166.
“Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. … The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less-informed part of the community.” James Madison, Federalist Number 44, 1788.
Supreme Court cases construing the Bill of Attainder clause include:
- Ex Parte Garland, 4 Wallace 333 (1866).
- Cummings v. Missouri, 4 Wallace 277 (1866).
- U.S. v. Brown, 381 U.S. 437 (1965).
- Nixon v. Administrator of General Services, 433 U.S.425 (1977).
- Selective Service Administration v. Minnesota PIRG, 468 U.S. 841 (1984).