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The bill that passed the house Thursday, which imposes a 90% tax on bonuses to people who companies receiving more than $5 billion in government money and whose household income is $250K-plus, is a bad bill. As Nate Silver points out, it’s basically a machine-gun approach to the problem, encompassing solvent firms that took the money to increase liquidity in the market at the request of the administration, auto companies, and everyone else. The provision that it applies to family income makes it worse – if you make $125k, which is a great salary but arguably not pitchforks-worthy-level-obscene, and so does your spouse (no matter where he or she works), any bonus on top of that gets nailed. It’s punitive on a lot of people who actually don’t deserve it. And Lawrence Tribe, who’d previously argued that some kind of clawback would be constitutional, says the current bill might not be constitutional because it’s, well, punitive.
In the NYT, David Leonhardt discusses ways of making compensation less risky.
