Taxing AIG, again (for the third time)

All the overlapping suggestions for how to get bonuses back from AIG are starting to get confusing. But I see that the tax bill I've written about before is getting a vote today:

The House is scheduled to vote today on 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.

If Laurence Tribe's standard was right, this bill certainly seems like it passes a constitutional smell test. But it does seem to me that when the the tax become more broadly applicable, the question of who gets swept up by the law becomes much harder to answer. A law that taxes specific individuals at a single company might be unconstitutional, but would at least have very narrow and predictable consequences. The consequences of this bill seem less certain. And since the proposal for this bill existed for all of about 15 minutes before this vote, I doubt Congress has thought about it.

A more general point is that legal cleverness cuts in both directions. Congress has demonstrated an amazing ability to cease dithering over every other matter of public importance, climb its way to the top of a high horse, and come up many truly inspired schemes for recouping something on the order of 1/10,000 of the money it's spent on the financial crisis thus far. But the ability to manipulate the law is not a skill unique to Barney Frank, and if any of these companies are intent on dodging the congressional dragnet then they will find the lawyers with which to do so.

Presented by

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

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