Legal Commentary

Don?t Bank on Legal Challenge to Bank Tax

By Jonathan H. Adler

Monday?s NYT reported the Securities Industry and Financial Markets Association is investigating potential constitutional challenges to the President?s proposed $90-billion bank tax.  It?s apparently not enough to argue that the President?s various economic and regulatory initiatives are bad policy ? as this proposal is ? it must also be unconstitutional.

Based on the article, SIFMA hopes to argue the tax is an unconstitutional bill of attainder or ex post facto law.  I suppose another challenge, if the tax legislation is poorly drafted, could be that it is a direct tax and must be apportioned to be constitutional.  None of this is likely to matter, however.  Barring exceedingly poor draftsmanship, I doubt any court would strike down the tax, should it be enacted.  If the AIG bonus tax would pass muster in the courts (as discussed in this thread), I don?t see any likelihood a more broad-based tax on banks would face any difficulty at all.

Full post as published by The Volokh Conspiracy on January 19, 2010 (boomark / email).