“Scamming The Taxpayers”: The IRS Controversy And The Tax-Exempt Charade
As we’re learning more about the IRS giving heightened scrutiny to conservative groups filing for tax-exempt status, we should make one thing clear: If what we’ve heard so far holds up, the people involved should probably get fired, and new safeguards should be put in place to make sure nothing like it happens again. And let it be noted that liberal publications, at least the ones I’ve seen, have all taken that position and have been discussing this story at length.
Now, let’s see if we can understand the context in which this happened. There’s an irony at work here, which is that it may well be that the IRS employees involved were trying to obey the spirit of the law but ended up violating the letter of the law, while for the organizations in question it was the opposite: they were trying to violate the spirit of the law, but probably didn’t violate the letter of the law.
Let’s take the first part, the IRS employees. When a group files for tax-exempt status, the IRS investigates it, asks it some questions, and determines whether it qualifies under section 501(c)(3) or 501(c)(4). The difference between them is that a 501(c)(3) is supposed to be a genuine charity, like your local food bank or Institute for the Study of Foot Fungus, while a 501(c)(4) is still primarily devoted to “social welfare” but is allowed more leeway to engage in some political activities like lobbying and participation in elections, so long as the political activities make up a minority of its time. The biggest practical difference is that donations to (c)(3) groups are tax-deductible, while donations to (c)(4) groups are not.
Once the Supreme Court said in the 2010 Citizens United decision that (c)(4) groups could engage in “express advocacy” (i.e. explicitly saying “Vote for Smith!”), the IRS got flooded with new applications for (c)(4) groups, and its job was to determine if these groups were actually “social-welfare” organizations that also did some politicking on the side, or if they were groups whose main purpose was actually political, in which case, according to the law, they should be denied (c)(4) status. We know very little at this point about what the IRS employees in Cincinnati did and why, but the generous interpretation is that since so many of the applications they were getting in 2010 and 2011 were from Tea Party groups that looked a lot like their sole purpose was to elect Republicans, they looked for some way to handle them all together, so they searched for applications with words like “Tea Party” and “Patriot” in their names and subjected them to extra scrutiny.
Even if their motivations were innocent and they were just struggling to find ways to wade through all these applications and do their jobs properly—in other words, if there was no violation of the spirit of the law—it was still improper for them to sort the applications this way, because it could mean in practice that an ideological test was being applied to which groups got heightened scrutiny. But now let’s look at the other half of the story, the groups applying for tax-exempt status.
The truth is that a great many of the groups that request 501(c)(3) and 501(c)(4) status, of all ideological stripes, are basically pulling a scam on the taxpayers. Maybe that’s a bit harsh, but at the very least they’re engaged in a charade in which they pretend to be “nonpartisan” when in fact they are very, very partisan. For instance, nobody actually believes that groups like the Center for American Progress on the left or the Heritage Foundation on the right aren’t partisan. When there’s an election coming, they mobilize substantial resources to influence it. They blog about how the other side’s candidate is a jerk, they issue reports on how his plans will destroy America, and they do all sorts of things whose unambiguous intent is to make the election come out the way they want it to. CAP and Heritage, along with many other organizations like them, are 501(c)(3) charities, meaning as long as they never issue a formal endorsement and are careful to avoid any express advocacy, they can maintain the fiction that they’re nonpartisan (keep getting tax-deductible contributions, which are easier to obtain than those that aren’t tax-deductible).
And that fiction is even more exaggerated when you get to the (c)(4) groups, particularly the new ones. For instance, when Karl Rove’s Crossroads GPS applied for 501(c)(4) status, it explained to the IRS that it was a social-welfare organization for whom influencing elections wouldn’t be its primary purpose. Instead, the group said “Through issue research, public communications, events with policymakers, and outreach to interested citizens, Crossroads GPS seeks to elevate understanding of consequential national policy issues, and to build grassroots support for legislative and policy changes that promote private sector economic growth, reduce needless government regulations, impose stronger financial discipline, and accountability in government, and strengthen America’s national security.” It claimed that 50 percent of its activities would be “public education,” 20 percent would be “research,” and the remaining 30 percent would be “activity to influence legislation and policymaking.” On the section of the form where the group has to state whether it plans to spend any money to influence elections, it wrote that it “may, in the future” do so, but “Any such activity will be limited in amount, and will not constitute the organization’s primary purpose.”
As everyone knows, this is a joke. Crossroads GPS was created for one purpose and one purpose only: to get Republicans elected. Maybe they found a way to stay within the letter of the law, but there’s no question they were violating its spirit. And the same is true of Priorities USA, the pro-Obama group created in advance of the 2012 election by a couple of former White House staffers. Both are actually twin groups, a (c)(4) and a super PAC, which allows the people running them to keep within the letter of the law by moving spending around between the two. (Stephen Colbert and Trevor Potter memorably explained how all this can be done.)
Without knowing anything about the particular Tea Party groups that were subjected to heightened scrutiny (we’ve only heard about a few so far), the broader context is that you have a lot of groups of all political persuasions that are essentially trying to pull a fast one on the IRS, and through them, the American taxpayer. Keep in mind that tax-exempt status is a gift that we give to groups that can demonstrate they deserve it. Perhaps this part of the tax code should be made stricter, or perhaps it should be made looser so all these charades can stop. But either way, this wouldn’t be a bad time to start that discussion.
By: Paul Waldman, Contributing Editor, The American Prospect, May 13, 2013
“Bad Heritage”: One Wonders If Jim DeMint Is Quite The Person To Lead The Way Toward The Think Tank’s Redemption
When Jim DeMint left the Senate to assume command of the Heritage Foundation, some people questioned the wisdom of the move. Not from DeMint’s perspective—after all, instead of being a staunchly conservative member of the minority party with a staff of a few dozen whose job was to throw rhetorical bombs at the majority and say mean things about Barack Obama, now he’d have a staff of a few hundred and rule one of the right’s most important institutions, not to mention probably quadrupling his salary. No, the puzzle was why a think tank like Heritage would want someone like DeMint, not known for putting much stock in thinking, as its leader.
And before you know it, Heritage is taking a huge hit to its reputation. It was always known for producing tendentious analyses of issues, but the report it released this week on immigration, claiming that reform would cost the country trillions of dollars, was a masterpiece of glaring omissions and questionable assumptions; included among the latter was that immigrants and their children will never move up the economic ladder.
Then we got a little more insight into where that belief might have come from. It turns out that one of the report’s co-authors, the spectacularly named Jason Richwine, wrote a dissertation at Harvard claiming that there are immutable differences in intelligence between races, and that should govern our immigration policy. “No one knows whether Hispanics will ever reach IQ parity with whites, he wrote, “but the prediction that new Hispanic immigrants will have low-IQ children and grandchildren is difficult to argue against.” Then we discovered that this wasn’t the first time Richwine had opined on the alleged intellectual inferiority of certain races. With the heat growing, today Richwine resigned from Heritage.
But there may be an upside for Heritage in all this. For some time to come, their quantitative work will be subject to extra scrutiny, with observers on the lookout for both statistical shenanigans and the authors’ repellent views whenever a new Heritage report comes out. The organization will surely know this, which could lead them to be unusually careful and restrained in the arguments they make. If so, they could end up producing better work and eventually overcome the damage this episode has done. But one wonders if Jim DeMint is quite the person to lead the way toward redemption.
By: Paul Waldman, Contributing Editor, The American Prospect, May 10, 2013
“Bigoted Heritage”: At Right-Wing Think Tanks, Racism As Usual
The exposure of a Heritage Foundation research analyst as a proponent of racist theories reopens a troubling intellectual history that the right-wing think tank and its Republican allies would rather not discuss. This fresh embarrassment poses yet another obstacle for Republican leaders who are supposedly seeking to erase their party’s polarizing reputation and to connect with non-white voters.
Now led by former South Carolina Republican senator Jim DeMint, the team at Heritage – a lavishly funded Washington outfit long known for propagandistic research studies – certainly didn’t advance the Republican outreach effort last week. With a thinly sourced new study that claimed immigration reform would bankrupt the country with trillions of dollars in additional social welfare costs, they undermined Heritage’s fragile integrity and offended the Latino voting bloc.
However flimsy, the report certainly reflected a deep split within Republican ranks over immigration policy. What made matters far worse was the subsequent revelation in The Washington Post that Jason Richwine, the study’s co-author, had asserted in his 2009 Harvard doctoral dissertation that Latino immigrants are not only less intelligent than America’s “white native population,” but that their descendants can be expected to suffer from “low average IQ” – a condition he described as “effectively permanent.”
Following the Post article on Richwine’s dissertation, Yahoo News reported that he has posted inflammatory articles on a “white nationalist” website, Alternative Right, comparing crime rates among Hispanics, whites, and blacks. “The reality of Hispanic crime,” he concludes, “should be one of the many factors we consider when setting immigration policy.”
Seeking to control the damage from these revelations, Heritage quickly released a statement disowning Richwine’s racial theories. “This is not a work product of The Heritage Foundation. Its findings in no way reflect the positions of The Heritage Foundation,” said Heritage official Mike Gonzalez in a statement. “Nor do the findings affect the conclusions of our study on the cost of amnesty to the U.S. taxpayer.”
But the true history of the Heritage Foundation – and of the American Enterprise Institute, the other major think tank where Richwine enjoyed a sinecure – reflects the ugly racial bias that has long disfigured the right in this country.
Scandalous links between the racist far right and allegedly respectable conservative institutions date back to Heritage’s earliest days in the 1970s, when the editorial board of Policy Review, its monthly publication, featured the notorious racial theorist Roger Pearson. Shortly after the Post reported Pearson’s role at Heritage, the think tank dumped him. But in the decades that followed, Heritage still lionized racially divisive politicians like Jesse Helms, the late Republican senator from North Carolina, awarding him its “highest honor” in 2002 and depicting him as an “indispensable patriot” when he died in 2008.
Over at the American Enterprise Institute, where Richwine’s anti-Hispanic essay still adorns its website, racist “scholarship” is likewise encouraged and disseminated. Charles Murray, author of The Bell Curve, an infamous work of pseudo-science that argues the genetic inferiority of blacks and Latinos, has been based at AEI for more than 20 years. Dinesh D’Souza held a fellowship there when he wrote The End of Racism, a book-length screed urging the repeal of basic civil rights statutes and endorsing racial discrimination by businesses, landlords, and private citizens. While D’Souza’s work provoked the resignations from AEI of black conservatives Robert Woodson and Glenn Loury, he eventually moved on to yet another conservative think tank, the Hoover Institution.
These dubious organizations — which continue to provide the intellectual ballast for the Republican Party – have emitted a spreading cesspool of academic and political racism for decades. When I published Big Lies in 2003, I examined how the arguments of Murray and D’Souza had defined a “mainstream conservative position on race” that promoted bigotry and undermined civil rights. Ten years on, despite all the talk of a kinder, gentler GOP, nothing has really changed.
By: Joe Conason, The National Memo, May 10, 2013
“Politics Dressed Up As Math”: The GOP Starts Eating Its Own On Immigration
The conservative Heritage Foundation today – in a re-run of theirs from 2007 – released a “cost estimate” for immigration reform. Not surprisingly, Heritage predicts that the price tag of immigration reform will be just shy of astronomical: $6.3 trillion over the next few decades.
Back in 2007, Heritage helped prevent comprehensive immigration reform from becoming law by claiming that it would cost $2.6 trillion (in the last six years, something evidently happened to more than double Heritage’s estimate). In the intervening years, the GOP’s trouble attracting minority voters has only increased, so this time, Republicans in Congress and their allies who want to see immigration reform become a reality were ready.
“Here we go again,” tweeted Sen. Jeff Flake, R-Ariz., one of the so-called “gang of eight” in the Senate. “New Heritage study claims huge cost for Immigration Reform. Ignores economic benefits.” Former Congressional Budget Office director and McCain campaign adviser Douglas Holtz-Eakin wrote that the study “failed to consider the implications of reform and instead looked solely at the cost of low-skilled immigrants.” The Immigration Task Force at the Bipartisan Policy Center, cochaired by Republican former Gov. Haley Barbour and former Secretary of State Condoleeza Rice, said in a statement, “We strongly believe that this study’s modeling and assumptions are fundamentally flawed.”
For the record, the Congressional Budget Office found that the 2007 immigration bill – which Heritage said would cost $2.6 trillion – would have actually boosted revenue by tens of billions of dollars. And past Heritage studies on immigration have been, to put it mildly, a bit off the mark.
But critiquing the Heritage study on an economic basis means accepting that it is meant as a good-faith effort to assess the impact of proposed legislation. As the Washington Post’s Greg Sargent and the Daily Beast’s Michael Tomasky both note, that isn’t really the point. As Tomasky writes:
The Heritage Foundation has now come out against immigration reform, without exactly taking that position, indeed while claiming to take the opposite position … This is an old conservative play – go after the cost of something, which permits them not to be against the idea per se, only against its fiscal ramifications. “We’re not against immigration reform. Quite the contrary! We’re just against the cost of this particular bill.” It’s a cousin of the old saw one always heard back in the Cold War days: “We’re not against arms-control treaties in general at all, but we are certainly against this one,” which just happened to be the case with regard to every single one.
Heritage analysts even freely admit that their estimate isn’t of the gang of eight’s specific proposal, but about some phantom comprehensive reform bill. Adding in one more level of absurdity, Heritage chose not to use so-called “dynamic scoring” when assessing the impact of immigration reform, even though most of the time it screams bloody murder when dynamic scoring is not used to figure out how much a bill might cost.
So Heritage is not really trying to figure out what immigration reform will actually do to the economy; it is just giving the right-wing base a number to wield as a cudgel. But this time, other conservatives, rather than progressives, are trying to show Heritage’s politics-dressed-up-as-math for what it really is. Those of us on the other end of the political spectrum just get to sit back and watch.
By: Pat Garofalo, U. S. News and World Report, May 6, 2013
“Mundane Posturing”: House GOP Kills Eric Cantor’s Ridiculous Health-Care Scheme
It looked like House Majority Leader Eric Cantor (R-Va.) had come up with a fairly clever scheme. Unfortunately for him, it died yesterday when his fellow House Republicans refused to go along.
The gambit was a little complicated, but in a nutshell, Cantor thought he’d come up with a way to severely undermine the Affordable Care Act — the House would pass a bill to strip federal funds from the Prevention and Public Health Fund, which helps states set up the exchanges that are needed to make the ACA work. The proposal would then divert that money into existing-but- underfunded high-risk pools for the uninsured — a favorite GOP health care policy — that help people with pre-existing conditions buy subsidized coverage.
For Cantor, the plan checked a lot of boxes. If the exchanges are gutted, implementing “Obamacare” would be nearly impossible. At the same time, voters were supposed to see this and say, “See? House Republicans really are interested in providing solutions to problems people face in the real world.” As a matter of public policy, this was an awful idea, but the whole endeavor was billed as an element in the party’s “rebranding” campaign.
So what happened? Cantor’s plan failed miserably because his own allies balked.
On Wednesday, Republican leaders abruptly shelved one of the centerpieces of Mr. Cantor’s “Making Life Work” agenda — a bill to extend insurance coverage to people with pre-existing medical conditions — in the face of a conservative revolt. […]
Items that Mr. Cantor had hoped would change the Republican Party’s look, if not its priorities, have been ignored, have been greeted with yawns or have only worsened Republican divisions.
Cantor expected Democratic opposition and he received it — House Dems immediately saw through the scheme and the White House issued a veto threat yesterday morning.
But that wasn’t the majority leader’s real problem. Rather, far-right lawmakers, activists, and organizations saw Cantor’s proposal as an effort to “fix” the Affordable Care Act by investing in high-risk pools for those with pre-existing conditions.
For the left, Cantor’s “Helping Sick Americans Now Act” was a wolf in sheep’s clothing. For the right, it was just a sheep to be slaughtered.
Republican leaders assumed that if they just explained the legislation to their own members — this was about cutting “Obamacare” off at the knees, not actually improving the law — they’d have enough support to pass the bill. But House Republicans wouldn’t listen, seeing this as a misguided effort to spend public funds in support of a provision within the health care law they’ve been told to despise.
The Club for Growth, the Heritage Foundation and tea party groups have urged Republican lawmakers to oppose the bill, which was authored by GOP Reps. Joe Pitts of Pennsylvania, Michael Burgess of Texas and Ann Wagner of Missouri. Club for Growth said it would include this vote in its annual rating of members of Congress.
Brent Bozell, a tea party leader, dubbed the bill “CantorCare” in a news release Tuesday.
Republican lawmakers privately fretted that the bill would bolster Obamacare, which the GOP has long tried to dismantle.
Cantor, humiliated, was forced to pull the bill from the floor, realizing it would lose if brought up for a vote. His office insisted that the proposal would be brought back after the leadership had more time to educate its caucus, but there’s no indication of when that might happen.
Remember, Cantor and his allies didn’t really expect this to become law; they only hoped to use this as a political scheme that made House Republicans look better. In practice, it had the opposite of the intended effect, and divided the caucus instead of uniting it.
This was, as NBC’s First Read put it, “mundane posturing,” which should have been easy for the far-right lawmakers, but which ended up backfiring.
By: Steve Benen, The Maddow Blog, April 25, 2013
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 