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> Could the government really pull this off =96 implementing a retroactive
> tax increase?
>
> In a word, yes. Back in August 1993, President Clinton passed the
> largest tax increase in history =96 the Omnibus Budget Reconciliation Act
> of 1993 (OBRA) =96 and made it retroactive to January of that year.
>
> It was challenged in court, and the court held that retroactive tax
> increases were legal. This was not the first time this sort of chicanery
> had been pulled. (You can read more on the topic of retroactive taxes by
> clicking here.)
Robert, could you give that l "No Bill of Attainder or ex post facto Law shall be passed." --Article I. Section 9, U.S. Constitution
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I'm curious how they justify passing a law ex post facto.
I guess that's the beauty of a living, breathing document--it lets you do whatever you want. Like jail opponents.
That article described several cases of retroactive tax increase, which led me to several Supreme Court decisions upholding them. Anyone who owns taxable businesses or property will want to read this
1rst case:
United States v. Carlton, 512 U.S. 26 (1994)
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The executor of an estate purchased and sold stock at a loss to an Employee Stock Option Plan (ESOP), to reap a legal tax benefit under the law for the estate he represented. A year later, a Democratic Congress changed the law so that the stockholder must have purchased the stock during his/her life to reap the deduction, and made that retroactive. The estate was therefore in violation of the modified law, and owed a bunch more tax.
The Supreme Court said, essentially, that Congress was just correcting the law to its original intent to prevent what was essentially a "sham transaction(s)," which was not unconstitutional. And, further, that a little bit of retroactivity is allowable and necessary--even unavoidable in tax measures.
Blackmun said the fact that the executor relied on the published tax laws for guidance "is insufficient to establish a constitutional violation. _Tax legislation is not a promise, and a taxpayer has no vested right in the Internal Revenue Code._" (emphasis added)
In United States v. Darusmont, 449 U.S. 292 (1981)
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a couple sold their house (a triplex)--to relocate for a new job-- after carefully consulting with their tax guys to sell in a way minimizing their tax. Congress changed the law later that year, and the IRS came after them for more tax.
The homeowners argued that tax change was a violation of their due process rights under the 5th Amendment; the justices said no, because the issue had been under discussion for a year prior, so the homeowners should've known. Further, the Court said changing the tax rate of an existing law was not the same as enacting a new /ex post facto/ law.
As usual, this crap started under FDR. Since FDR's in vogue again, business owners beware.
Can you count the many ways the constitution has been trashed, avoided and plain contradicted with "laws"? Slavery, stealing our gold, "selective service", sending national guard to foreign lands to be ordered around by foreign powers, etc & etc... "Patriot" act, Homeland "Security" act, wire tapping without warrants, etc, etc... One could go on for days...
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