Commentary

Taxing the Public’s Patience

It certainly has been a scandalous week for the White House with an investigation into the Internal Revenue Service (IRS) after allegations that the agency wrongfully targeted conservative political groups. The allegations stated that the IRS had subjected organizations associated with the Tea Party to biased scrutiny in determining whether such organizations qualified for tax-exempt, not-for-profit status. There is evidence that top IRS officials knew of these actions as early as October 2010, and that the House Ways and Means Committee conducted investigations in March 2012. No serious actions were taken until April of this year, when the IRS’s behavior was finally brought to the attention of the White House. On May 10, Lois Lerner, the Director of the IRS Exempt Organizations division, issued an apology, setting into motion an investigation. The IRS, no matter what your political leanings, is in the wrong; its actions were unfair, if not illegal. Still, the groups targeted did not deserve tax exemptions. Something needs to change. Rather than examine the groups themselves, the IRS should review the legislation that determines tax-exempt status, the Section 501(c) of the internal revenue code. Since the 2010 Supreme Court ruling on Citizens United v. Federal Election Commission, the section has become a problematically outdated clause, and the source of this trouble. 501(c) names 28 types of organizations that qualify as not-for-profits and are exempt from taxes. All of these organizations may lobby in order to influence legislation, but are prohibited from contributing to political campaigns. That is, all except for one type of organization which is defined as a “civic league.” These civic leagues, groups that promote “social welfare,” may contribute to campaigns as long as it is not their primary focus. It is these conservative civic leagues that were targeted by the IRS. While condemning the agency’s actions, Democratic voters may see some righteousness in this behavior. Since the ruling on Citizens United, conservative civic leagues function very much like groups known as Political Action Committees (Super PACs). Super PACs are allowed to spend unlimited sums of money on behalf of political candidates, as compared to the limit of $5,000 per individual donor on direct campaign financing. We must reconsider why civic leagues receive tax-exempt status at all. It is doubtful that their contributions actually constitute “social welfare.” Unless, of course, we are willing to say that Super PACs contribute to social welfare. In asserting that, we would be suggesting that Americans benefited from the nearly $1 trillion, according to the Center for Responsive Politics, spent on the 2012 election. Civic leagues are costing the government money when our primary goal should be balancing the budget. I am not suggesting a solution to our deficit problems. Nonetheless, every cent counts, so we must search for painless ways to cut spending. It’s time for civic leagues to stop pretending they are the same as typical non-profits. It’s time to start taxing civic leagues, and time to put the money towards real social welfare: ending the deficit. Lily Grossbard is a new Lower from New York, NY.