People who even know or care in the least about the IRS scandal currently engulfing Washington, whereby the IRS has been preferentially delaying tax exempt status applications from TEA Party and other conservative and religious groups, are upset about the wrong aspect of the case. The initial and still continuing focus is on what they consider ridiculously and insultingly intrusive questions. The IRS official in charge of the Cincinnati office, where these applications are processed, famously testified in Congress that she has done nothing wrong, that she had done nothing illegal; and then took the Fifth. What outrage… Congressmen and others are falling all over each other, vowing to root out this corruption.
Good luck with that one.
Why? Because the IRS official is right. She has done nothing wrong — not if the ridiculously and insultingly intrusive questions are the same ones sent to every applicant; not if the IRS makes the same attempt to get answers from every applicant; not if they do the same due diligence with every applicant — because the ridiculousness, the intrusiveness and the insult in the questions are perfectly legitimate.
Put yourself in her shoes for a moment. An organization comes to you to claim tax exempt status. That means,
(1) They admit to having a source of income. The tax code defines whether and which type of income is taxable. It is legitimate to ask about the source of that income; and if it comes from donors, wouldn’t you ask, who?
(2) They claim to have deductible expenses. The tax code defines whether and which type of expense is deductible. It is legitimate to ask what those expenses are; and if the money or goods go to groups or individuals, wouldn’t you ask, who?
They claim to engage in charitable, educational and other non-profit activities. The tax code defines whether and which type of activity qualifies. It is legitimate to ask what those activities are.
(3) If they claim to be educating the public, it is legitimate to ask, who teaches what to whom, using what resources and materials. Wouldn’t you ask, who is doing the teaching, who is being taught, what it is being taught?
(4) If they claim to be a religious organization, it is legitimate to ask, to whom you are praying, for what, and what you hold up as holy scripture. How else are you going to verify the veracity of the claim and its conformance with the tax code? Wouldn’t you ask?
But if there is any hint that you are engaging in politics, not education (for example) then you are in for more detailed scrutiny because — as far as I know — political activity is not tax-exempt; donations to candidates, parties and causes are not deductible to the donor. I may be wrong, but is does not matter whether I am right or wrong, because either way:
The evil that has to be rooted out comes in three forms. There are three evils to be rooted out.
One evil is unequal enforcement of the law. The IRS scrutiny is practically nonexistent and speed of processing applications is practically immediate for left-wing groups and other political supporters of the current administration, but excessively “diligent” and lengthy for groups suspected to be conservative in their politics. The level of unequal treatment practiced by this office of the IRS is in direct violation of the 14th and other amendments from the Civil War era. (Don’t hold your breath waiting for any prosecutions to happen.)
The other evil is violation of privacy. The confidential information that is submitted to the IRS in support of an application of tax-exempt status somehow, magically, finds its way to left-wing activists and organizations. In effect, the government is supplying data for their “opposition research.” This is a violation of trust between a citizen and the government. It rises to the level of a criminal violation of various federal laws, and is subject to serious penalties. (Don’t hold your breath waiting for this one, either.)
The third evil, the real evil, is the INCOME TAX. The real evil the philosophical foundation of the tax code. “From each according to his ability, …” Sound familiar? Our schools and colleges are working hard to make sure you know it and accept is as the most succint statement of the highest possible level of morality. It’s from Karl Marx, in the Communist Manifesto, written in 1848 (not nineteen forty eight, but EIGHTEEN forty eight; so much for “progressives” being “modern” and up to date). With the imposition of the income tax — the 16th Amendment, in 1913 — the federal government gave itself the power to intrude into everyone’s most private business in the most excruciating detail. Accordingly, the tax code has grown into the monstrous size and complexity that nobody understands anymore today, in response to the desperate urge to make it “fair” (whatever that means), to serve to needs of various special interests, and to cure various social ills, real or not. And that was before the advent of obamacare as yet another law to be enforced by the IRS.
The solution to this scandal is not the punishment of some IRS employees who committed numerous violations of the Constitution and federal criminal law.
The solution is very simple. The government has to be made NOT TO CARE about people’s incomes. The only effective solution is the total repeal, the total elimination and total eradication of the legal foundation and all the legal constructs that enable this kind of criminal abuse — the income tax and the monstrous tax code built to enforce it. If the government has any role in “promot(ing) the general welfare,” its activities should be so directed as to help — or at least not to hinder — the natural growth of the economy. The best way to do that is to readjust the government’s attitude to stay the hell out of the way, to let private enterprise bring prosperity to all; that is, to make government revenue dependent directly on the health of the economy; that is, to let the government’s tax collections increase only as the economy and as the peoples’ prosperity increase.
That form of taxation does exist; it is the SALES TAX. It has already been practiced in many states, and in many forms at the federal level, too.
(1) A sales tax is the most fair of all taxes; you pay it only if you have money to spend on buying something.
(2) The amount of sales tax you pay is proportional to the amount you spend. If you are poor or have modest tastes, you spend little and you pay little; if you are rich and have extravagant tastes, you spend a lot and you pay a lot. The tax still manages to “soak the rich.”
(3) With a sales tax there is no issue with the source and nature of your income, your expenditures or the nature and purpose of your activities. The government has no reason to demand you account for your life in microscopic detail.
(4) A sales tax is the most efficient of all taxes; as an individual payer you never have to file any forms or tax returns.
(5) A sales tax is the cheapest to collect, because the collection is done at the point of sale by the merchants and other sellers who are vastly fewer in number than the purchasers. And the mechanism is already in place in most states, many counties and many cities.
(6) There is no need for an entire army to enforce a sales tax, such as the current IRS, because the US Department of the Treasury would have only 50 clients to deal with; that is, one tax department in each of the 50 states. I doubt if the amount of work would ever justify even a single full time federal employee, but I am sure the Treasury will find a way to bloat it at least to the level of an office with a small permanent staff, possibly using the excuse that they’ll need to audit the state tax departments.
Will Congress have the courage to display a level of dedication to freedom and a level of opportunism in the current political climate, sufficient to repeal the income tax, abolish the IRS, and replace them with a national retail sales tax? Not in my lifetime, or yours. The miracle such as 1787 happens only once in history. Huh? 1787? Yea, you know, the year of the Constitutional Convention, when those “evil slave-owning rich dead white men” wrote that document that everybody today loves to hate, ignore or twist out of shape to fit their special interests.