Taxes, charity and the IRS

In a piece about the college admissions scandal, Adam Looney of the Brookings Institution noted that the scam should have been discovered by federal officials long ago, before one of the minor players in the crime tipped off authorities.

Specifically, the IRS should have known the sham charity was violating tax laws, as it charged wealthy families enormous sums to help get their children into the colleges of their choice. Some parents had their children fake disabilities. Some paid to cheat on their college entrance exams. Some bribed coaches to get spots on college sports teams.

Looney noted that the IRS never examined the charity, Key Worldwide, despite “a surprising amount of suspicious activity.”

He goes on to note that in 2017, the IRS reviewed the filings of 6,101 tax-exempt organizations. That was out of about a million public charities and 1.4 million more tax-exempt organizations.

In an unrelated piece on the radio, an NPR program noted that funding for the Internal Revenue Service has declined 25 percent, adjusted for inflation, since 2010. Staffing for enforcement has been slashed even more.

We have crippled the IRS to the point that it can no longer do its job.

A lot of people applaud this news, even if they don’t cheat on their taxes. Hating the IRS is almost a requirement of being American.

But even the Trump administration understands the damage that has been done. President Donald Trump’s budget proposal calls for more money for the IRS. That’s after the president last year proposed further reductions at the agency.

Taxpayers who think our government should be fair and competent should support an IRS that is sufficiently staffed and able to enforce the laws equitably.

Part of the agency’s problems are self-inflicted. During the Obama administration, the IRS drew the anger of the GOP for delaying and flagging tax-exempt paperwork from Republican-aligned tea party groups.

The GOP was right to draw attention to the claim that groups were being treated differently, depending on their political affiliation.

But Republicans and Democrats were wrong in their conclusion. While any IRS officials whose work is tainted by politics should be reprimanded or fired, the bigger issue is why political groups should be considered charities.

Regardless of their party affiliation, such groups should not be exempt from taxes. The laws were written to support charities involved in education, religion and social services. They were never intended to advance the fortunes of political machines with non-stop, massive fundraising operations.

The president and Congress should propose and pass legislation that would tighten the rules that award tax-exempt status to charities and other tax-exempt entities. Instead, many in Washington are working to further undermine the tax system by creating more loopholes for their political allies.

Responsible government requires that we care whether tax policy treats people equitably. It also requires that we raise revenues sufficient to pay the nation’s bills.

Today, neither test is met. And while many Americans still voluntarily pay what they owe, an unknown number of cheaters – companies, individuals, foreign entities and nonprofits – are undermining the integrity of the system and the fiscal stability of the nation.

Research by ProPublica found that the rate of audits conducted by the IRS dropped more than 40 percent over the last decade. The article published in December also found that the audit rate for wealthy Americans dropped much more than that for any other group.

No one should wish for a tax agency that is excessive in its size or demands. But it’s time Congress recognized that the punishment inflicted on the IRS is counterproductive. Eviscerating the IRS doesn’t help law-abiding Americans, only criminals and cheaters.

The fixes would be relatively simple. Restoring funding for enforcement and IRS support services are initiatives that would pay for themselves.

Congress also needs to tighten the rules for groups that claim to be tax-exempt charities. Again, it would be relatively simple. Politicians and the thousands of outfits that have been created over the last two decades to abuse the system could still be as politically active as they want to be. But like the rest of us, they would need to pay their taxes.

 

Honestly, let’s be consistent

Honesty has never been an absolute requirement for political candidates.

Even George Washington was known to mislead people on rare occasion, according to biographer Ron Chernow.

Chernow and most historians agree that Washington deserved his reputation as an honest and trustworthy businessman, military commander and political leader. But he could, contrary to legend, tell a lie.

The story about Washington admitting that he chopped down a cherry tree, and saying, “I cannot tell a lie,” is, well, a lie. It was invented not by Washington, but by an early biographer.

Still, by today’s standards, Washington’s honesty is impressive.

Now, it’s acceptable to justify the dishonesty of political leaders and publicly endorse double standards. Consider the cases of Michael Cohen and Michael Flynn.

Both used to work for President Donald Trump. Both were convicted of lying to federal authorities regarding actions that were performed on behalf of Trump.

Both admitted that they had lied.

But Trump and many others defend Flynn. The president called Flynn “a wonderful man” who had been treated “very, very unfairly by the media.”

Even after the former national security officer and career military officer pleaded guilty to lying to federal authorities, Trump claimed on a national TV show that authorities had found that Flynn had not lied.

He was, frankly, lying about lying.

Michael Cohen’s case brought a much different reaction.

After it was clear that Cohen would plead guilty and aid federal authorities in the investigation of the Trump campaign, the president called Cohen a “rat.”

When Cohen appeared to testify before a House committee, Republicans pounded him, claiming his word was worthless because he was a convicted liar.

“You’ve claimed that you’ve lied but you’re not a liar,” said Rep. Jody Hice, R-Georgia. “Just to set the record straight if you lied, you are a liar by definition.” That comment, reported in an Associated Press piece about the February hearing, was one of many examples of Republicans trashing Cohen.

It’s reasonable to doubt Cohen’s credibility. He does lie. A lot.

The same could be said of the president.

During a recent campaign rally in Michigan, Trump made false claims about where his father was born, the health effects of wind turbines and the amount of federal disaster relief sent to Puerto Rico. The dishonesty prompted eye-rolls among Republicans, but no apparent disappointment or anger from the same officials and pundits who earlier declared they could not abide dishonesty.

Selective outrage is not just a Republican ailment.

For example, Rep. Maxine Waters, D-California, repeatedly bashes Trump for his lies, but she defended Jussie Smollett, the actor who lied about being attacked in Chicago. She supported the controversial decision made by a Chicago prosecutor to drop the false-reporting charges against Smollett.

Not Trump. He was so angry about Smollett’s alleged crime that he claimed he was going to have the Department of Justice investigate.

Yet, the president thinks authorities should free Paul Manafort, who was convicted on multiple counts of bank fraud and tax fraud.

Trump has said repeatedly that federal authorities should not have prosecuted his former campaign manager, and he berated special counsel Robert Mueller for uncovering Manafort’s crimes.

“It’s a very sad situation,” Trump said to White House reporters about Manafort’s prison sentence. “Certainly on a human basis, it’s a very sad thing. I feel badly for him.”

What is sad is that we now treat honesty as a mere political tool – demanding it of others when it serves a partisan purpose and renouncing it to suit our needs.

Neither our government nor our society can survive such continued assault on basic principles.

Perfection is not expected. But we should demand an even-handed recognition that honesty is a good thing. We should still care when politicians – regardless of their political affiliation – lie.

We need not all set the bar to the same height. But we do need a bar, and the standard should be the same for Democrats and Republicans, regardless of who we voted for in 2016 or who we want to win in 2020.

It’s not the voters we should worry about

On Jan. 27, President Donald Trump used Twitter to warn the nation about voter fraud. As he had many times before and since, the president claimed huge numbers of U.S. residents were casting ballots illegally.

At the same time, officials in North Carolina were investigating a Republican campaign that abused the absentee ballot system to tip a congressional race in favor of the GOP candidate.

The two cases demonstrate an important distinction between claims of voter fraud and claims of election fraud.

Voter fraud involves people casting ballots when they are not eligible to do so. It would include cases of non-citizens, people who vote more than once, and felons who are barred by law from voting.

Election fraud involves illegal activity by candidates, campaigns and election officials. Voter fraud and election fraud can overlap, but they shouldn’t be confused.

Not so long ago, then Kansas secretary of state Kris Kobach led a special presidential commission focused on turning the president’s propaganda about voter fraud into something real. It failed spectacularly. Credible research repeatedly shows voter fraud is rare.

Election fraud is not quite so uncommon. But when confronted with evidence of election fraud in North Carolina, Trump was silent. Something’ has gone awry when federal officials eagerly accuse voters of cheating but try to ignore crimes committed by partisan campaigns.

For the most part, North Carolina state officials acted ethically as they responded to claims of misconduct. That’s why the Ninth District election is starting from the ground up, with a primary set for May 14 and a general election for Sept. 10.

Election integrity must be a bipartisan issue, one that requires officials to be smart and fair about the goals they set and the methods they use.

Trump’s Jan. 29 tweet, for example, amplified the “VOTER FRAUD ALERT” sent by the Texas attorney general.

Using inaccurate and out-of-date data, Texas top law enforcement official created a list that basically accused 95,000 Texans of breaking the law. Texas’ governor thanked him. The president used the alert to rally his anti-immigrant supporters.

Local election officials in Texas found the list full of errors. It was a waste of their time and taxpayers’ money.

Florida learned the same lesson in 2012, when it used obsolete and unverified databases to try to manufacture a similar voter fraud crisis. As in Texas, Florida officials were focused on intimidating and scaring immigrants. They claimed they found about 180,000 non-citizens who had illegally registered to vote in Florida. Simple checks by local authorities showed the list to be out of date and virtually useless. According to factcheck.org, in the end about 85 people were removed from voter registration rolls, but it was unclear whether any of them had ever voted.

The Texas list shows that some Republicans remain intent on suppressing the votes of people who tend to vote Democratic. Something has gone awry when officials who are supposed to champion voter participation instead discourage it.

Meanwhile, the misuse of absentee ballots appears to be growing – and not just among Republicans. Democratic campaigns also have misused absentee ballots to boost votes for their candidate.

The process can include requesting and submitting ballots for people the campaigns know won’t be going to the polls; collecting ballots from voters and submitting only those that support their candidate; or registering people to vote and then using their names to cast ballots.

It’s hard to know the size of the problem with absentee ballots. Usually no investigation is initiated unless the election is close, fraud is suspected, and multiple complaints are made. Even then, investigations often hinge on whether officials are motivated more by partisan loyalty or public duty.

Our election system is pretty solid, but it could be improved if we had more transparency in the system and more independent audits of elections at the local and state levels. Those are steps that would help ensure fair and honest elections, without hindering citizens’ ability to participate.

 

Why small states should appreciate the Electoral College

It’s easy to understand why many Americans hate the Electoral College. But the system does deserve some respect, especially from smaller-population states such as Kansas.

Lots of Democrats renewed calls to eliminate the Electoral College after the 2016 election. President Donald Trump’s final tally was just shy of 63 million votes, while Hillary Clinton finished with 65.8 million. But Trump won more Electoral College votes – 304 to Clinton’s 227.

Many voters argued it wasn’t fair that Clinton could win the popular vote but lose the election.

The system reflects yet another compromise devised by the nation’s founders. The U.S. Constitution includes lots of similar compromises, especially when it comes to what constitutes fair representation and how to elect senators and the president.

Back in the 1780s, some of the men voting on how to structure the nation’s new government thought the president should be elected directly by voters. Others thought the general public couldn’t be trusted to make good decisions, so Congress should make the pick. They compromised with the Electoral College.

Today, the Electoral College has 538 electors. It takes 270 votes to win the presidency. Each state gets as many votes as it has members of Congress. In Kansas, that’s six – four congressional districts and two Senate seats. The District of Columbia gets three electors.

Typically, but not always, all of a state’s electoral college votes go to the candidate who wins that state, even if the margin of victory is tiny.

The system gives more clout to smaller states than they would otherwise have – not just during campaigns but also through the course of a presidency.

Without the system, candidates for president would have little reason to concern themselves with the interests of smaller-population states, and even less reason to care about them once they were elected.

Candidates for president and officials who want to stay in office would have lots of incentive to focus on heavily populated urban and suburban areas – along the coasts and a handful of population centers elsewhere.

If you live in states such as Texas, California or New York, you would feel a lot of love from the candidates. If you live in states such as Kansas or Montana, you would not.

You might think that if your priority issues aren’t geographic in nature, then it won’t much matter.

If, say, affordable and accessible healthcare is your top concern, it might seem like the elimination of the Electoral College is irrelevant.

But if you live in a region that relies on federal funding to keep rural healthcare providers in business, you would be smart to worry that such services and funding would end as elected officials decide they are inefficient and serve relatively few people.

A multitude of issues – tax policy, highways, clean drinking water, internet service, and so on – affect rural and urban areas differently.

Because the Electoral College provides smaller-population states a bit more influence than they would otherwise have, it furthers the aim of electing officials who will ensure all citizens – regardless of where they live – are treated fairly and equitably.

The trade-off is that it’s not purely democratic. Critics argue that the system gives states such as Wyoming – with fewer than 600,000 residents and three electoral votes – unwarranted power compared to, say, California, which has 40 million residents and 55 electoral votes.

Some states in which Democrats hold legislative control are passing laws that would undercut the Electoral College. Colorado is among those that have voted to join the National Popular Vote Interstate Compact. According to the news service The Independent, the compact would require states to cast their electoral college votes for the candidate who wins the national popular vote – rather than the candidate who wins in the state.

A better course might be to tweak the system to look more like the process used by Nebraska and Maine.

Those states award Electoral College votes based on congressional districts, rather than the statewide total. Such a system would distribute electoral college votes more in line with the popular vote, but would still give smaller states a bit of an advantage.