Thursday, March 26, 2009

Bill to tax bonuses an 'outrage' and unconstitutional

Paul: Bill to tax bonuses an 'outrage' and unconstitutional
David Edwards and Rachel Oswald
Thursday March 19, 2009

Rep. Ron Paul (R-TX) yet again went against the grain in Congress when he stood up in the House and argued against a proposal that would tax 90 percent of AIG executive bonuses, saying that it was a "disgrace," a "distraction" and an "outrage" that undermined the Constitution.

"I rise in opposition to this rule and the bill because of the problem -- because of the lack of need for this and the disgrace that this has brought upon us," Paul said. "Yesterday, for instance, the Federal Reserve met and they came out and they announced that they would create new money to the tune of $1.25 trillion."

Paul, a dark horse Republican candidate for president in 2008 who still enjoys considerable popularity with a base of hardcore supporters, noted that the value of the dollar went down significantly after that announcement by the Fed.

"Today...on emergency legislation, we're going to deal with $165 million of bonuses, which obviously shouldn't have never been given, but who's responsible for this?" Paul said. "It's the Congress and the president who signed this [$787 billion stimulus bill that allowed the bonuses to go forward]. So this is a distraction, this is an outrage."

He chided his fellow House members who were considering supporting the new tax legislation for only caring about the millions in bonuses when they should be concerned with the trillions in deficits the country is facing.

"So everybody can go home that voted for this bill, say, 'Look, I'm clamping [down] on this $165 million but I don't care about the previous $5 trillion the Fed created and the $1.25 trillion they created yesterday,'" he said. "Think of the loss of purchasing power in less than 24 hours."

Paul urged his House members to support his bill, H.R. 1207, which would change the way the Federal Reserve is audited.

"Let's quit appropriating funds in an unconstitutional manner. Let's quit bankrupting this country," Paul said. "The Fed is not even required to answer any questions. So it's about time we have an open book about the Federal Reserve and solve some of these problems."

House passes tax bill Thursday afternoon

Despite the protestations of Paul and a few others, the House voted overwhelmingly to pass the bonus tax legislation Thursday afternoon.

Roll Call reports the vote was 328-93 to impose a 90 percent tax on employee bonuses at companies that received federal bailout funds.

"While the vote was bipartisan, the GOP was split on the bill, with Minority Leader John Boehner (Ohio) voting against it and Minority Whip Eric Cantor (Va.) voting in favor of it," reported Roll Call.

CNN notes that the measure, which now heads to the Senate for consideration, would tax individuals on any bonuses received in 2009 from companies getting $5 billion or more in money from the Troubled Asset Relief Program. Those with incomes more than $250,000 would see their bonuses taxed at the 90 percent rate.

"We can't have any concept of we're getting even, but we must have a concept that we're trying to show that Congress ... cannot tolerate that," said Charlie Rangel (D-NY), chairman of the House Ways and Means Committee on Wednesday.

Said House Speaker Nancy Pelosi, "We must also protect the American taxpayer from executives who would use their companies' second chances as opportunities for private gain. Because they could not use sound judgment in the use of taxpayer funds, these AIG executives will pay the Treasury in the form of this tax."

Speaking before the House on Thursday, Boehner questioned why they were only taxing 90 percent of the bonuses.

"Why 90 percent?... We can get 100 percent back because the Treasury Secretary has the ability to get it all back. The Administration has the ability to get it all back," Boehner said. "Why don’t we just get it all back? Why are we bringing this bill to the floor today to give members political cover when in fact the Treasury Secretary has the authority, the Administration has the authority to get all of it back?"

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