The Big Banks are weighing a constitutional challenge to the tax that Obama is proposing to impose, to recover the government’s bailout costs. According to experts consulted by the New York Times the legal theory behind the challenge is “dubious”:
[The Bank’s] primary argument, however, might be that a tax so narrowly focused would penalize a specific group. Legal scholars say the Supreme Court has overturned only a handful of laws on those grounds, and those were typically rules that singled out political outcasts like former members of the Confederacy or people accused of being communists.
The article fails to account for the overriding fact that we are encumbered with a Supreme Court that has a disdain for precedent and a fealty to corporations unlike any court since the early 20th century. John Roberts was appointed not for his socially conservative positions, but for his steadfast support for the American corporation, a support that increases in proportion to the size of the corporation Alito ditto. There’s every reason to believe that the court, as presently constituted, would reach out to use this case as a way to serve its corporate masters and push us back toward the 18th century, where they think we belong.
It happens that the tax is probably the wrong tax for Obama to propose. It would make more sense to pass a transaction tax, a tiny tax on each sale of securities that would have little effect on those of us who buy and sell stock for the long haul, but would have a huge and salutary effect on speculators. Still, the proposed tax is better than nothing.
Whether its the best policy, it is good politics. Consider this, also from the Times:
Republicans have remained unusually silent on the tax, hoping to avoid a choice between supporting a tax increase and defending big bankers.
Yes, indeed. As Jesus said, you can’t serve two masters, and this would give us a great opportunity to see which master, the tea partiers or the bankers, means the most to the Republicans. My prediction: the Republicans have become so inflexibly negative that they will ultimately oppose this bill out of pure instinct. Now, if they can only get Baucus, Nelson and the other so called Democrats to get out of the way, the real Democrats might have a chance to salvage the elections in November.
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