tax law madness reaches new heights

Retroactive taxes are evil.  End of story.

You earn income through legal means.  You set aside the expected amount for taxes.  Chances are you spend the rest.   Even if you save or invest your income, likely you put it into something that is not very liquid — an educational savings account with penalties for withdrawal, for example.  Or real estate.  There is no reason to believe that any person, no matter how wealthy, parks his income in a bank account waiting to see if the government is going to ask for it back.  It is your money, legally acquired; it is reasonable to think it really is yours to do with as you please.

And then here comes Congress, deciding that because your income is unpopular, they should be free to tax it at 90%. Retroactively.  What if you can’t pony up the cash come tax time? Well, then you can pay penalties,  maybe have your home seized, maybe go to prison.

Am I outraged by the AIG bonuses?  Of course I am.   They are yet another symptom of lousy management by both AIG and our Congress who decided to invest in the company.  If we like, let us pass a law limiting compensation to government-funded entities.

But a retroactive tax is nothing short of confiscation of private property.  It is evil, and it is bad governance.


Edited to add this link to a description of the bill that passed the House.

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