What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
“It is difficult to make predictions, especially about the future,” says a proverb often attributed to Yogi Berra. Imagine the world of freedom, or lack of it. Who could foresee the technologies that make our lives so rewarding and convenient? The same technologies have us all under the government’s giant microscope. Thankfully, the brave have turned the microscope around.
In the months since Edward Snowden revealed the nature and extent of the spying that the National Security Agency (NSA) has been perpetrating upon Americans and foreigners, some of the NSA's most troublesome behavior has not been a part of the public debate.
National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The problem for NSA apologist is that when guys like Snowden disclose that the government conducts comprehensive surveillance in ways that would have made 1984’s O’Brien drool, it puts the entire progressive agenda in jeopardy.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
In times of war and national emergency, it’s sometimes necessary to sacrifice civil liberties to secure vital gains in public safety. In those cases, we may have to accept a loss of privacy or freedom rather than invite mass slaughter of Americans.The National Security Agency’s domestic phone records collection is not one of those.Never have […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
Do you trust your doctor? Most patients assume their doctor is working in their best medical interests whenever he or she orders a diagnostic test or recommends a particular treatment. Customers might wonder whether an unscrupulous auto mechanic is being truthful when he recommends a brake job or a new transmission. But most patients trust […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”As the inequality gap grows, there is an ideological battle unfolding in the West.On the one hand, there are those who think government can fix things. It must do more, tax more, […]
On Feb. 7 the United States will once again reach its statutory debt limit, meaning it cannot legally borrow any more money. Since the obvious option of cutting spending to match the amount of revenue that the government collects is off the table for some inexplicable reason, Congress will have to pass a new, higher […]
The New York Times published an interminable article on health care recently. Plenty of facts — how scrupulous are these journalists! — but the article displayed absolutely no comprehension of the basics of cause and effect. I was left wondering about the whole point.The article details how the health care system rewards specialists to an […]
The power to tax has long conferred the power to destroy one’s political opponents. When the latest IRS politicization scandal erupted in May, many commentators talked as if the abuses were a novelty in American history. But, as David Burnham noted in his masterful 1990 book, A Law Unto Itself: The IRS and the Abuse of Power, “In almost every administration since the IRS’s inception the information and power of the tax agency have been mobilized for explicitly political purposes.”
The IRS has a long history of trying to ruin the political careers of its critics. In 1925, Internal Revenue Commissioner David Blair personally delivered a demand for $10 million in back taxes to Michigan’s Republican Sen. James Couzens — who had launched an investigation of the Bureau of Internal Revenue — as he stepped out of the Senate chamber. Couzens fought the case, and eventually proved that he had actually overpaid his taxes by roughly $1 million. But the precedent of using threats to deflect oversight was firmly established.
President Franklin Roosevelt used the IRS to harass newspaper publishers, including William Randolph Hearst and Moses Annenberg (publisher of the Philadelphia Inquirer). He also dropped the IRS hammer on political rivals such as Huey Long and Father Coughlin, and prominent Republicans like former Treasury Secretary Andrew Mellon.
Perhaps Roosevelt’s most pernicious tax skullduggery occurred in 1944 when he spiked an IRS audit of massive illegal campaign contributions from a government contractor to Texas Rep. Lyndon Johnson. Johnson’s career would likely have been destroyed if Texans had learned of his dirty dealing. Instead, Johnson survived, and scores of thousands of Americans and more than a million Vietnamese died as a result.
John F. Kennedy raised the political exploitation of the IRS to an art form. Shortly after capturing the presidency, he denounced “the discordant voices of extremism” and, in a passage that could have been lifted from Obama’s recent Ohio State University commencement speech, derided people “who would sow the seeds of doubt and hate” and make Americans distrust their leaders.
At a news conference a few days later, a reporter sought his views on the legality of campaign contributions supporting “right-wing extremist groups.” Kennedy replied, “As long as they meet the requirements of the tax law, I don’t think that the Federal Government can interfere or should interfere with the right of any individual to take any position he wants. The only thing we should be concerned about is that it does not represent a diversion of funds which might be taxable to — for nontaxable purposes. But that is another question, and I am sure the Internal Revenue system examines that.”
Actually, Kennedy heavily elbowed the IRS to make sure that it targeted the tax-exempt status of conservative organizations that had criticized Kennedy or his agenda. The IRS launched the Ideological Organizations Audit Project, which targeted numerous right-leaning groups, including the Christian Anti-Communist Crusade and the American Enterprise Institute.
Shortly before his assassination, Kennedy specified that he wanted an “aggressive program” against the IRS targets. Kennedy also used the IRS to bolster compliance with “voluntary” price controls, targeting steel executives who defied the administration for audits.
Nixon’s tax enforcers
A 1976 Senate report noted, “By directing tax audits at individuals and groups solely because of their political beliefs, the Ideological Organizations Audit Project established a precedent for a far more elaborate program of targeting ‘dissidents.’” After Richard Nixon took office, his administration quickly created a Special Services Staff (SSS) to mastermind “all IRS activities involving ideological, militant, subversive, radical, and similar type organizations.”
More than 10,000 groups and individuals were targeted because of their political activism or slant between 1969 and 1973, including the John Birch Society and Nobel laureate Linus Pauling. The IRS was also given a list of Nixon’s official enemies to, in the words of White House counsel John Dean, “use the available federal machinery to screw our political enemies.” Contributors to the Democratic Party were also high on Nixon’s target list.
Nixon’s administration vastly expanded a secret computer database — the “Intelligence Gathering and Retrieval System” the IRS began in 1963 — to sweep up information on individual Americans and groups. By 1975 the IRS had stockpiled data on almost half a million persons and groups; the program was abolished after its existence became known outside of official circles.
The exposure of Nixon’s IRS abuses profoundly weakened him during the uproar after the Watergate break-in. The second article of his 1974 impeachment charged him with endeavoring to “obtain from the IRS … confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.” Congress enacted legislation to severely restrict political contacts between the White House and the IRS.
But the IRS continued its freelance work. After Sen. Joe Montoya of New Mexico announced plans in 1972 to hold hearings on IRS abuses, the agency added his name to a list of tax protestors who were capable of violence against IRS agents. When IRS Commissioner Donald Alexander was challenged on the listing at a 1975 Senate hearing, he replied, “The only connection that I can think of immediately is that Senator Montoya is, after all, the Chairman of the IRS Appropriations Subcommittee, and someone might have thought that he did violence to our appropriation.” Information from an IRS investigation of Montoya was leaked to the Washington Post. Partly as a result of the IRS leak, Montoya lost his reelection bid.
The IRS targets conservatives
In the following decades the IRS regularly sparked outrage by abusing innocent taxpayers, but there was scant controversy about the agency’s politicization until Bill Clinton took office. In 1995 the White House and the Democratic National Committee produced a 331-page report, “Communication Stream of Conspiracy Commerce,” that attacked magazines, think tanks, and other entities and individuals who had criticized Clinton.
In subsequent years many organizations that were mentioned in the White House report were hit by IRS audits. More than 20 conservative organizations — including the Heritage Foundation and the American Spectator – and almost a dozen high-profile Clinton critics were audited.
The Landmark Legal Foundation sued the IRS after being audited. Its brief quoted an IRS official who claimed at a meeting that documents revealing the names of congressmen and their staffers who had requested audits were being or had been shredded. The official went on to recommend tactics for masking such requests in the future.
The IRS claimed that it could not find 114 key files relating to possible political manipulation of audits of tax-exempt organizations. The Clinton administration fought vociferously to prevent Americans from learning how it had abused IRS powers. As a Wall Street Journal editorial noted, “The IRS position is incredible. It says letters from politicians asking that someone be audited are confidential tax-return information.”
Bipartisan tax bullying
In perhaps the least recognized media bombshell of the Clinton era, the Associated Press reported in late 1999 that “officials in the Democratic White House and members of both parties in Congress have prompted hundreds of audits of political opponents in the 1990s,” including “personal demands for audits from members of Congress.” Audit requests from congressmen were marked “expedited” or “hot politically,” and IRS officials were obliged to respond within 15 days.
The AP noted, “The IRS computer tracking system in Washington denotes the name of a politician who refers a matter. The original letter from the White House or lawmaker is forwarded to the case agent.” Permitting congressmen to secretly and effortlessly sic G-men on whomever they pleased epitomized official Washington’s contempt for average Americans and fair play. But because the abuse was bipartisan, it evinced little or no interest on Capitol Hill.
After Obama’s first presidential election, conservative groups began mobilizing across the nation to resist what they perceived as his socialist policies and programs. By mid-2010, conservative organizations were complaining of harassment by the IRS. The Obama administration perpetually denied that any such targeting was occurring.
However, a May 2013 Inspector General report confirmed that IRS employees had devoted far more scrutiny (sometimes amounting to seeming harassment) to nonprofit applications that used the terms “tea party” or “patriot” or that criticized government spending or federal deficits. The Inspector General report concluded, “Developing and using criteria that focuses on organization names and policy positions instead of the activities … does not promote public confidence that tax-exempt laws are being adhered to impartially.” Surprise, surprise.
Congress claims to be vigorously investigating the latest scandal, and further facts may come out in the future. Thus far the media have largely ignored how the Obama-era abuses vivify how the tax code allows rulers to suppress political opposition.
This fundamental truth has burst forth only occasionally over the past century — perhaps most eloquently in a 1967 federal appeals court decision overturning the conviction of a leftist Oregon lawyer: “The court will not place its stamp of approval upon a witch-hunt, a crusade to rid society of unorthodox thinkers and actors by using the federal income tax laws” to silence them.
But as long as the federal tax code is incomprehensible to most Americans, the IRS will continue to have vast power over its targets. And we cannot expect politicians to fix the problem as long as they expect to profit from the IRS’s machinations. But, as Alexander Hamilton, later the nation’s first secretary of the treasury, warned in 1782, “Whatever liberty we may boast in theory, it cannot exist in fact while [arbitrary tax] assessments continue.”
– James Bovard
This article originally appeared here on the Future of Freedom Foundation website.