Auditing the Auditors

In Washington, D.C., the journalist Michael Kinsley famously said, the true scandal is not what is illegal, but what is legal.

What ought to outrage us the most, the thinking goes, is not when the government does ridiculous things that are plainly against the law, but rather when the government does ridiculous things that are not.  When the shenanigans being undertaken are, in fact, business as usual.

So when the U.S. Senate rejected the Manchin-Toomey gun control bill last month despite it being supported by an overwhelming majority of the American public, the real problem was not that the Senate failed to align with its constituents on a major domestic issue, but rather that the bill actually had more than 50 votes in its favor but, thanks to a provision in Senate rules that no one outside Washington quite understands, the legislation was rendered dead on arrival.

Of course, this emphasis on the Kinsley adage should not blind us to old-fashioned lawbreaking and political and governmental malpractice, which will never go away and must always be guarded against.  But it is nonetheless a useful reminder that many of the most entrenched failures of our federal government are endemic precisely because they are legally (if not morally) permissible.  If we hope ever to genuinely reform and improve the system, we need to begin at its deepest roots.

With that, we arrive at the kerfuffle surrounding the Internal Revenue Service, one of several official Washington scandals in which the Obama administration presently finds itself embroiled.

Ostensibly, what makes the IRS business so alarming is the apparent bald politicization that has infected this supposedly apolitical wing of the Treasury Department.

In case you have heretofore tuned the story out:  The IRS stands accused (with strong supporting evidence) that it was excessively and purposefully slow and circumspect in granting tax-exempt status to politically conservative groups who applied for the designation, and that the IRS did so precisely because such groups were politically conservative.

I hazard to surmise that no serious person would interpret this behavior as fair.  Quite to the contrary, the notion that the efficiency with which one’s tax forms are processed be subject to one’s political views is a rather frightening one.  The IRS should knock it off.

Yet somehow, that is not the real scandal.

As officials at the IRS abuse their agency’s authority by turning it into a practitioner of partisan politics, we should realize their behavior, however unethical, is a byproduct of a far more comprehensive abuse currently festering across the United States, unabated.

I frame this larger problem in the form of a question:  Why are so many groups exempt from paying taxes in the first place?  Why are any?

The theory behind the exemption in question, known as the 501(c)(4), is that it applies to organizations that engage in “social welfare” activities and steer clear of politics.  Somewhere along the line, the injunction for “no political activity” morphed into “not too much political activity” and, thanks to excessively vague language in the tax code as to what constitutes “political activity” in the first place, organizations that seem to engage in nothing but politics are being granted tax exemptions they were never intended to receive.

Politics begat politics.

The logical short-term solution to this conundrum, methodically laid out by the New York Times editorial board, among others, is simply to clarify what the rules are regarding the 501(c)(4), restoring the original proviso about qualifying organizations not being political outfits in disguise.

But why stop there?  Why not take the opportunity to reevaluate the rationale for granting no-tax status to any organization operating on American soil?

When we say, through our tax code, that certain organizations are entitled to conduct business in America for free while the rest must pay the price of admission, we are imparting a moral judgment upon these groups’ comparative worth.  In a society in which everyone is supposed to be treated equally under the law, why should this be?

If it was unfair for the Internal Revenue Service to discriminate against conservative organizations because it viewed their agendas as being of lesser value to the country than liberal organizations’, is it any less unfair for our tax code to make similar value judgments about any other organization, at any other time, for any other reason?  Dare we say that such assessments are beyond the competency of the IRS?

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