The real IRS scandal
The IRS has interpreted our tax laws to allow big corporations and wealthy individuals to make unlimited secret campaign donations through sham political fronts, Reich writes.
The IRS has interpreted our tax laws to allow big corporations and wealthy individuals to make unlimited secret campaign donations through sham political fronts, Reich writes.
鈥淭his systematic abuse cannot be fixed with just one resignation, or two,鈥澛爏aid聽David Camp, the Republican chairman of the House tax-writing committee, at an oversight hearing Friday morning dealing with the IRS. 鈥淭his is not a personnel problem. This is a problem of the IRS being too large, too intrusive, too abusive.鈥�
David Camp has it wrong. There has been a 鈥渟ystematic鈥� abuse of power, but it鈥檚 not what Camp has in mind. The real scandal is that:
The IRS has interpreted our tax laws to allow big corporations and wealthy individuals to make unlimited secret campaign donations through sham political fronts called 鈥渟ocial welfare organizations,鈥� like Karl Rove鈥檚 鈥淐rossroads,鈥� the U.S. Chamber of Commerce, and 鈥淧riorites USA.鈥�
This campaign money has been used to bribe Congress to keep in place tax loopholes like the 鈥渃arried interest鈥� rule that allows the managers of hedge funds and private equity funds to treat their income as capital gains, subject only to low capital gains taxes rather than ordinary income taxes, and other loopholes that allow CEOs to get special tax treatment on giant compensation packages that now average $10 million a year.聽
Despite a growing number of billionaires and multi-millionaires using every tax dodge imaginable 鈥� laundering their money through phantom corporations and tax havens 鈥� the IRS鈥檚 budget has been cut by 17 percent since 2002, adjusted for inflation. To manage the $594.5 million in additional cuts required by the sequester, the agency will furlough each of its more than 89,000 employees for at least five days this year.
Finally, all of this, coming at a time when the Supreme Court has deemed corporations 鈥減eople鈥� under the First Amendment and when income and wealth are more concentrated at the top than they鈥檝e been in over a hundred years, has enabled America鈥檚 financial elite to further entrench their wealth and power and thereby take over much of American democracy.
This is the real scandal and the real abuse, Congressman Camp. Your indignation over the IRS鈥檚 alleged 鈥渢argeting鈥� of conservative groups is a distraction from the main event.聽聽