More on a subject recently discussed. On March 25, 2009 FORCES published A Very Important Taxation Article. That posting included the following observation:
Objections to that tax passed by Congress this week are based on punitively taxing a single group of people deemed to have acted improperly or a group that offends the sensibilities of the majority, even though the actions complained of were legal.
No sooner posted than expanded by the Agenda Afflicted. From the Seattle Times, April 1, 2009, WaMu Staff Promised Retention Bonuses to Aid JPMorgan Transition May Face Big Tax [stored], by Drew DeSilver:
Hundreds of former Washington Mutual employees, expected to lose their jobs this year after working temporarily as part of JPMorgan Chase’s transition team, could get winged by the congressional shotgun blast aimed at recouping multimillion-dollar bonuses paid to executives at insurance giant American International Group. That’s because the retention bonuses JPMorgan Chase promised those workers to get them to stick around would be taxed heavily under either of two bills in the Senate. . . . After word of the AIG bonuses spread, an outraged House quickly passed a bill aimed at recovering them. . . . The measure, now in the Senate, would slap a 90 percent tax on bonuses given to employees of companies that received more than $5 billion in federal bailout money (including JPMorgan Chase). The tax would apply to all workers whose household adjusted gross income exceeds $250,000. The Senate also is considering another version. That bill — whose co-sponsors include Sen. Maria Cantwell, D-Wash. — would impose a 35 percent tax but apply to a wider range of banks and financial-services companies. . . . "Clearly, the purpose of the legislation originally was AIG," Paravano said. "But Congress knows how to target things, and I think they knew and understood that there were midlevel managers who were receiving smaller bonuses." Still, he said, should either bill become law in its current form, affected individuals could challenge it as a violation of the Constitution’s "equal protection" clause — the requirement that government treat similarly situated parties similarly.
April Fool’s: Thought you had a bonus, didn’t ya . . . !
Persons who choose to smoke have experienced the above phenomenon for more than a decade. Smokers have felt the sting of politicians’ inherent ability to target others, while proclaiming the alleged mandate to “do something” about a compelling crisis. Once a door is cracked open the stench of opportunistic legislation seeps through one’s entire political house. In this case, it took a mere week for senators to figure out how to expand taxation while seeking to avoid legal action related to the original bills. It appears that the mindset of “If we screw more constituents the few whom we originally targeted will not have a legal basis to complain” is pervasive.
The very good news is that the same politicians who taxed smokers to fund SCHIP – including senators Maria Cantwell and Patty Murray plus Rep. Jay Inslee – now demonstrate their propensity to tax others on pretense as well. Sooner or later everyone gets it: the alleged purposes of the legislation are a manufactured pretense based on politics of the moment. It appears that those who currently feel the sting of having their legitimate bonuses unfairly taxed away may have reason to pause and consider the interests of those who have been placed in the “Target Group” barrel for years.
Perhaps voters will respond appropriately in November 2010: if it’s a serving incumbent on the ballot it’s gone.