WASHINGTON – To a great extent, Republican investigations into IRS harassment of conservative and tea party tax-exempt organizations that play politics are a bad joke. And the joke is on the average taxpayer back home.
The tax-exempt status these outfits obtained was never meant to aid groups engaged in campaigns – to use our tax money to pay for the rough business of electing or defeating candidates for public office.
There are two types of tax exemptions that political groups sought right after the Supreme Court legalized unlimited corporate and union money in political campaigns. The 2010 ruling was Citizens United v. Federal Election Commission.
A handful of political groups asked for exemption as public charities, under a part of the tax code used by churches, universities, art galleries, symphonies, the United Way and Red Cross.
But soon after the Citizens United ruling, the IRS was deluged with more than 3,300 applications for tax-exempt charters under a separate code as “social welfare organizations.” Official IRS documents list veterans organizations, softball leagues, free community newspapers, neighborhood security and outfits that run holiday parades as examples of social welfare organizations. There’s no mention in the IRS guidelines anywhere for political parties.
But somehow, capital insiders warped the meaning of the tax code to allow political play so long as it was not the “primary purpose” of a chartered social welfare organization. Congress ought to be investigating how that happened, but it won’t.
It won’t because this twisting of the tax law provides yet another massive pipeline for dark money to flood the political process to both parties. This further isolates Washington, D.C., from the voices of middle-class Americans. As in Albany, big money insulates members of the House and Senate from frustrated, middle-class critics on Main Street. For incumbents, the bigger the cash and the more cloudy the source, the better.
You see, the core purpose of these controversial social welfare organizations is to permit shrouding the sources of gargantuan political gifts to influence the outcome of elections – be they from the Koch Brothers on the right, or George Soros on the left. While the law requires tax-exempts to report donors to the government, it permits them to conceal these influencers from the public.
It creates a whole new shady level of political money laundering. Republican Karl Rove created a social welfare organization that spent more than $70 million trying to defeat President Obama. Democratic friends of Obama created one that spent about $4 million. The IRS quickly licensed both.
The Republican outcry must be bittersweet for old-time tea partyers. They had no more devoted opponents than the Republican establishment, particularly Karl Rove. No one, not the tea party, not patriots, not constitutionalists, needs tax-exemption to do politics. That’s licensed at relatively little expense at the state and federal levels by separate agencies.
None of the above is said to obscure the evil of the Obama IRS using the stark fear of auditors to intimidate conservatives, administration critics and religious leaders. Through his press secretary Meredith Kelly, Sen. Charles E. Schumer, D-N.Y., said: “Congress should fully investigate this potential abuse of power. The IRS must adopt neutral, objective criteria for reviewing groups seeking tax-exempt status and make them clear to the public and to groups that apply. As long as the guidelines remain murky, the risk remains the agency will enforce the law arbitrarily or, worse, based on political motives. And that is unacceptable.”
The best answer is to outlaw the use of tax-exempts in political campaigns altogether. Better still, overturn Citizens United. But there is no real interest in either party to do either.