Friday, May 17, 2013

The case for impeachment, part 2

I want to call this whole IRS scandal a tempest in a teapot. After all, it seems confined to a few agents in one regional IRS office. And their investigations of the bona fides of some 501(c)(4) organizations serve an entirely legitimate purpose, which is to find out whether those organizations are legally entitled to claim tax exempt status. The acting IRS commissioner who resigned over this incident says that these were simply “foolish mistakes . . . made by people trying to be more efficient in their workload selection.” In other words, they took some shortcuts because they thought they would be more likely to find abuse among Tea Party-affiliated groups than other types of organizations. At worst, these IRS employees deliberately acted in a politically biased way, but there is nothing so unusual about that. The IRS scandal doesn't seem to compare to the outright politicization of the Justice Department that occurred under President Bush, or the deliberate targeting of political enemies by President Nixon--scandals that reached all the way up to the White House. This problem, by contrast, seems unlikely to involve any officials outside of the IRS itself.

This matter will of course be investigated to the hilt, until all but the most paranoid of the radical right are satisfied that the Obama administration was not misusing government agencies for political purposes. But that is not why we have to take this scandal seriously. The reason that have to take this IRS scandal seriously is because it represents another battle in the ongoing war between the powerful interests seeking to hide the corrupting influence of money in politics, and the rest of us. The way this scandal gets resolved will help determine who wins that battle. In that battle, Tea Party sympathizers are to some extent being used by business interests who want to weaken regulation and lower the costs to business of employee wages and benefits. The right wing fringe and these business interests share a fear of government: in the first case a fear that government will impose liberal values on them, take away their guns, and shower the undeserving poor with benefits; in the second case a fear that government might make industry pay for what economists call the negative externalities of their operations.

It is well documented that business interests, most notoriously the Koch brothers, have financed and fomented the popular uprisings of Tea Party groups, most visibly as a means of opposing health insurance reform. These interests would prefer to conceal their involvement. And that is why it is important to them that organizations that are at least partially performing a political function not be required to disclose their donors. Here's where the tax code comes in. As explained in more detail in places that the people who are stirring up this mini-tempest are probably not reading (e.g., the Los Angeles Times, the New York Times, the New Yorker), in articles with variations on the title the "real IRS scandal," the tax code allows groups that are primarily social welfare organizations, with religious, educational or cultural purposes, to claim tax exempt status, which also allows them to keep their donors secret. Due to lax enforcement, many organizations are able to claim the benefits of 501(c)(4) status even though they are primarily engaged in political activities.

Politicians of all stripes are not doing enough to combat the corrupting influence of money in politics. Their campaigns depend on that money. And these covert political organizations serve causes that politicians favor.  Combine that with the concerted effort on the part Congressional Republicans to reduce the IRS budget and you have a recipe for undue political influence and abuse of the tax laws.

As this investigation plays out, it will be important to keep the focus on the abuse of the tax laws by organizations that are not entitled to tax-exempt treatment. That way, the efforts by the right to use this scandal to attack President Obama and weaken the IRS could even backfire. Yes, we should demand even-handed treatment of all political action groups, left, right and center. No organizations should be targeted because of their political bent. But ALL political organizations that are abusing the privileges of the tax code should be targeted. We should demand stricter enforcement of the requirements of section 501(c)(4) to expose the influence of every moneyed interest on our political system. If this scandal results in such exposure, that would not only be a delicious irony, but would actually serve a useful and important purpose.

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