If the poor…because they are more in number, divide among themselves the property of the rich–is not this unjust? …[I]f this is not extreme injustice, what is? …[I]s it not evident, if this goes on, that they will ruin the state?” —Aristotle, The Politics, III.10
courtesy, wikipedia.org
One of the reasons I admire President Washington is his acute understanding of the power of precedents. From the mundane (e.g. what should we call the president?) to the important (e.g. how many terms should a president serve?), Washington understood that any action taken by the national government had the potential to set a precedent that might not soon be overturned. Too bad our current leaders lack Washington’s prescience.
After allowing AIG to honor its contractual obligation to provide $165 million dollars in bonuses to executives as part of the “American Recovery and Reinvestment Act,” the U.S. House of Representatives voted 328 – 93 to impose a special 90 percent tax on those who received these bonuses and fail to return the money to the federal government before the end of the tax year. My new congressman was leading the charge to reclaim this money. In a press release issued shortly after the vote, Rep. Tom Perriello (D-VA) stated in part: “…I am proud that we turned justified outrage into real results quickly.” (Rep. Perriello, himself, cosponsored a similar bill that would have taxed these bonuses at a rate of 100 percent.) While I disagree with any company in financial straits issuing bonuses, I also have a problem with the U.S. Congress targeting a special, retroactive tax at specific individuals. Today we might cheer this tax because it reclaims our tax dollars, however, today’s action is tomorrow’s precedent. What’s to stop the federal government from seizing 90 percent of some other group’s income in the future if they feel that it, too, is more than an individual deserves? There is a better way to reclaim the money, as Mitt Romney and Larry Kudlow illustrate, that would not set potentially dangerous precedents for the future.
When legislators, like Rep. Perriello, stoke public anger toward a specific group of people, the results can get out of hand quickly—as we are seeing now. Innocent people are getting caught in the crosshairs because some politicians are more interested in playing politics to cover their past mistakes* than they are in making just, responsible policies.
*After Rep. Perriello voted for the American Recovery and Reinvestment Act, he defended his vote by saying “…Congress acted quickly, transparently, and responsibly to get something done for American families.” Perhaps Rep. Perriello should have read the American Recovery and Reinvestment Act before voting for it; if he had, maybe he would have discovered the AIG bonuses.
UPDATE: Apparently, it doesn’t take long to establish a precedent.
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