Daily Archives: 23 May 2013

An Outcome of Big Government

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The proper lessons of the unfolding IRS scandal are twofold.  First, any effort to have the IRS police advocacy activities of social-welfare organizations is bound to be clumsy and prone to degenerate into either selective or broad witch hunts.  Second, the remedy is not to further limit political speech by nonprofit entities—which would certainly raise significant constitutional issues—but to encourage such speech by imposing fewer restrictions.

That combines with this:

There are two valid takeaways from the IRS scandal [and the other scandals: AP; Benghazi; Sebelius’ HHS “fund-raising” for Federal government’s health exchanges, just exposed this year].  First, it confirms that big government, whose power Obama is bent on expanding, cannot be trusted to behave properly.  Second, it calls for further investigation to determine how high up the chain the wrongdoing extends and whether the administration acted promptly to stop the targeting once it learned of that activity.

The need for an investigation and the firing of miscreants and subsequent jailing of those miscreants whose behavior was criminal certainly is warranted.  However, the IRS’ unconscionable behavior, and the Obama administration’s behavior vis-à-vis the other…scandals…, aren’t unique to the Obama administration.  These are the inevitable outcomes of Big Government, even when that government acts with the best of intentions.

Our Federal government needs to be drastically shrunk in size and scope, returning it to the small, limited, and so controllable, entity that it was designed to be.

A first step in this, in the present context, would be to do away with the distinction between 501(c)(3) and 501(c)(4) organizations—the legal distinction is wholly artificial and without meaning, anyway.  All entities engaged in otherwise tax exempt activities must be able to engage in some political activity.  That’s at the core of the speech clauses of the 1st Amendment:

Congress shall make no law…abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

There’s nothing in there about “except for when individual Americans or groups of them peaceably assembled are doing certain government-identified things.”

Subsequently, reform the tax code altogether to a single low, flat tax and thereby eliminate the need for tax exempt status for any organization.

Yet Another Thought on Taxes

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The Wall Street Journal has reported that

Apple, Inc paid no corporate income tax to any national government on tens of billions of dollars in overseas income over the past four years, Senate investigators found, a revelation that fuels the debate over whether the US tax code needs an overhaul.

The Senate thinks this is a bad thing, even as they acknowledge that Apple actually paid all the taxes it legally owed.  Senator John McCain (R, AZ), ranking Republican on the Senate Permanent Subcommittee on Investigations that hectored Apple’s CEO, Tim Cook, on that dastardly legal behavior earlier this week, gripes that

What they often leave out is the second part of the story, that Apple is one of the largest tax avoiders…Apple [is] the most egregious offender [among US corporations trying to avoid tax bills].

This despite the Subcommittee’s already completed investigations finding that Apple has, indeed, behaved entirely legally.  (Which makes me wonder, as an aside, whether McCain has outlived his usefulness and become just another RINO who needs to be terminated in his next primary.)  Regardless of any findings, though, in the finest Federal government tradition (can you say, “IRS,” boys and girls?), we’re going to hector and harass, anyway.  That was the point of haling Cook before the subcommittee to answer their inquisition.

This comes as part of a debate that the

US is undergoing…about the earnings that US companies are keeping overseas.  The profit at foreign subsidiaries are out of the reach of the IRS, and largely unusable to their US operations.

The sums amount to an estimated $1.9 trillion, according to an analysis by Audit Analytics….

However, instead of thinking about how to get their grubby mitts on all that money—which they then can dole out to select groups in return for votes and political power—these politicians should think about how much good that money would do in terms of jobs and innovation (and so more jobs) and lower product costs (and so more demand and so more jobs) were that money allowed to come home by an intelligent tax régime that would contain rates that encouraged rather than prevented repatriation of the money.

But thinking about that would require these politicians to “ask not what they can do for themselves, ask what they can do for their country.”