Tag: IRS

There’s No Such Thing as ‘Good Government’

National Journal’s Ron Fournier:

I like government. I don’t like what the fallout from these past few weeks might do to the public’s faith in it…

The core argument of President Obama’s rise to power, and a uniting belief of his coalition of young, minority and well-educated voters, is that government can do good things–and do them well.

Damn. Look at what cliches the past few weeks wrought.

Fournier then runs through how the various Obama scandals show:

Government is intrusive … Orwellian … incompetent … corrupt … complicated … heartless … secretive … [and] can’t be trusted.

And that’s when the good guys are running the show!

Maybe Fournier needs to brush up on his Common Sense:

Society in every state is a blessing, but Government, even in its best state, is but a necessary evil… Government, like dress, is the badge of lost innocence… For were the impulses of conscience clear, uniform and irresistibly obeyed, man would need no other lawgiver; but that not being the case, he finds it necessary to surrender up a part of his property to furnish means for the protection of the rest; and this he is induced to do by the same prudence which in every other case advises him, out of two evils to choose the least.

Translation: there’s no such thing as “good government.”

The IRS Has Already Abused Its Powers under ObamaCare

Over at Bloomberg, National Review’s Ramesh Ponnuru writes about the Obama administration’s disregard for the rule of law, including the IRS’s $800 billion power grab:

The Patient Protection and Affordable Care Act, the sweeping health-care law that Obama signed in 2010, asks state governments to set up health exchanges, and authorizes the federal government to provide tax credits to people who use those exchanges to get insurance. But most states have refused to establish the online marketplaces, and both the tax credits and many of the law’s penalties can’t go into effect until the states act.

Obama’s IRS has decided it’s going to apply the tax credits and penalties in states that refuse, even without statutory authorization. During the recent scandal over the IRS’s harassment of conservative groups, many Republicans have warned that the IRS can’t be trusted with the new powers that the health law will give the agency. They are wrong about the verb tense: It has already abused those powers.

For more, read my article (with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”

 

Gerson: ‘The Other IRS Scandal’

The Washington Post’s Michael Gerson writes that the IRS’s suppression of tea-party groups and the subsequent cover-up are the second-largest scandal haunting the agency.

Drawing from my article (with Jonathan Adler) on the illegal IRS rule meant to save Obamacare, Gerson concludes:

The IRS seized the authority to spend about $800 billion over 10 years on benefits that were not authorized by Congress. And the current IRS scandal puts this decision in a new light…

The whole enterprise [of Obamacare] is precariously perched atop a flimsy bureaucratic excuse. And the agency providing that excuse is a discredited mess.

When the IRS suppresses speech by the president’s political opponents, that’s nothing to sneeze at. Neither is it anything to sneeze at when the IRS tries to spend almost a trillion dollars against the express wishes of Congress.

Can You Vague That Up for Me?

As the IRS scandal thickens, targeted groups are coming out to describe their ordeals in dealing with that most-reviled of government agencies. The Ohio Liberty Coalition was one of the groups targeted by the IRS, and Tom Zawistowski of the OLC recently sat down with Cato’s Caleb Brown to discuss the experience.

Among the many lessons we can take from this scandal is to realize how bureaucrats enforcing vague government regulations can chill free speech. Campaign finance laws are filled with vague regulations–such as whether an ad is the “functional equivalent of direct advocacy”–and they are anything but harmless to political speech.

In assessing applications for (c)(4) status, the IRS looked for whether political campaigning was an applicant’s “primary activity.” Due to the vagueness of this term, “rogue” IRS agents were free to harass applicants for the “content of their prayers” and other uncouth requests.

Advocates for campaign finance restrictions often do not understand how political speech can be killed by a thousand cuts as much as it can by one fatal blow. Some FEC regulations clearly prohibit certain types of spending. Others tell would-be speakers to judge whether their ads “in context, can only be interpreted by a reasonable person as advocating a candidate’s election or defeat.” Complying with these regulations ultimately comes down to a silly “magic words” test–that is, a search for words such as “vote for,” “elect,” “support,” etc.

Some campaign finance advocates who understand what Citizens United was actually about–that is, a non-profit corporation prohibited from showing a movie critical of Hillary Clinton on Pay-Per-View–concede that Citizens United should have narrowly won the case. Rather than allowing all corporations to spend independently in elections, as the case turned out, they argue the Court should have carved out an exception for “genuine ideological organizations,” “voluntary media choices” (Pay-Per-View), or some other vague criterion that would ultimately have been enforced by bureaucrats at the FEC. We can now can see how such vague standards are applied and abused. 

.

Supreme Court Errs in Giving Agencies Power to Define Their Own Power

Although it did good by taxpayers today, the Supreme Court also issued a divided ruling that unfortunately expands the power of administrative agencies generally.  In City of Arlington v. FCC, six justices gave agencies discretion to decide when they have the power to regulate in a given area – which expands on the broad discretion they already have to regulate within the areas in which Congress granted them authority.

But why should courts defer to agency determinations regarding their own authority?  Courts review congressional action, so why should theoretically subservient bureaucrats – appointed by the executive branch and empowered by Congress – escape such checks and balances?  

Underneath the legal jargon and competing precedent regarding the line between actions that are “jurisdictional” (assertion of authority) versus “nonjurisdictional” (use of authority) is a very basic question: whether a government body uses its power wisely or not, it cannot possibly be the judge of whether it has that power to begin with.  Yet Justice Scalia, writing for the majority, essentially says that there’s no such thing as a dispute over whether an agency has power to regulate in a given area, just clear congressional lines of authority and ambiguous ones, with agencies having free rein in the latter circumstance unless their actions are “arbitrary and capricious” (what lawyers call Chevron deference, after a foundational 1984 case involving the oil company).

That makes no sense.  As Cato explained in our brief, since the theory of deference is based on Congress’s affirmative grant of power to an agency over a defined jurisdiction, it’s incoherent to say that the failure to provide such power is an equal justification for deference. Furthermore, granting an agency deference over its own jurisdiction is an open invitation for agencies to aggrandize power that Congress never intended them to have. One doesn’t need a doctorate in public choice economics to recognize that we need checks on those who wield power because it’s in their nature to husband and grow that power.

More broadly, this case should make us question the whole doctrine of Chevron deference: Yes, decisions about the scope of agency power should be made by elected officials, not by bureaucrats insulated from political accountability, but courts should also review with a more skeptical eye agency decisions about the use of power even within the proper scope.

Scandals Keep Eroding Our Faith in Benevolent Government

George Will, Michael Gerson, and our own Gene Healy are among the columnists who reminded us – in the wake of the IRS and AP snooping scandals – of President Obama’s stirring words just two days before the IRS story broke:

Unfortunately, you’ve grown up hearing voices that incessantly warn of government as nothing more than some separate, sinister entity. . . . They’ll warn that tyranny is always lurking just around the corner. You should reject these voices.

No road to serfdom here. Just us folks working together, to protect ourselves from sneaky reporters and organized taxpayers.

And now lots of people are noting that a series of scandals in government just might undermine people’s faith in government. John Dickerson of Slate writes:

The Obama administration is doing a far better job making the case for conservatism than Mitt Romney, Mitch McConnell, or John Boehner ever did. Showing is always better than telling, and when the government overreaches in so many ways it gives support to the conservative argument about the inherently rapacious nature of government….

Conservatives argue that the more government you have, the more opportunities you will have for it to grow out of control.

And Paul Begala, the Bill Clinton operative, notes:

This hurts the Obama Administration more than similar issues hurt the Bush administration because a central underpinning of the progressive philosophy is a belief in the efficacy of government. In the main almost all of the Obama agenda requires expanding folks’ faith in government, and these issues erode that faith.

“Faith in government” indeed. To paraphrase Oscar Wilde, putting your faith in government is, like a second marriage, a triumph of hope over experience.

But most particularly this week I’m reminded of Murray Rothbard’s comment in 1975 about what the era of Vietnam, Watergate, and stagflation had done to trust in government:

Twenty years ago, the historian Cecelia Kenyon, writing of the Anti-Federalist opponents of the adoption of the U.S. Constitution, chided them for being “men of little faith” – little faith, that is, in a strong central government. It is hard to think of anyone having such unexamined faith in government today.

Another 38 years later, it should be even more difficult to retain such faith.

Conspiracy Not Required

The recent revelation that the IRS targeted conservative political groups is now moving into the second stage of a DC scandal: the first is finding out what happened; the second is finding out how high up it goes. Although it is important to find out how many, if any, high-level officials are culpable, high-level participation is not necessary for libertarians to have a small “I told you so” moment.

But we should not try to oversell it. Some libertarians have an odd tendency to believe that government is more effective at doing bad things than at doing good things. At the extremes, this manifests as the “libertarian conspiracy theorist”—someone who oddly believes that, while government can’t effectively run health care, schools, or welfare programs, it can successfully orchestrate and cover-up massive conspiracies. But we don’t need high-level conspiracies to point out that abuses of power, even by low-level officials, can be expected. Moreover, as government grows larger it becomes both less accountable and more important to our lives, thus giving government officials both more leverage and more freedom to misbehave.  

In his novel Child 44, a fascinating detective story that takes place in Stalin’s Russia, Tom Rob Smith tells of an encounter between a party-member doctor and the novel’s protagonist, a Muscovite police officer who was once a loyal party member but is slowly losing his faith. The officer is out sick and the doctor visits to see if he is really sick or just trying to avoid work. Shirking work is a grave offense, and the doctor’s judgment could destroy the officer and his wife. A bad report and they will go to the Gulag. A good report and they get to stay in their relatively comfortable apartment in Moscow. Knowing his power, the doctor makes unwanted advances towards the officer’s beautiful wife, telling her that “Ten minutes is hardly a high price to pay for the life of your husband.”

It is a chilling episode, and while I am certainly not comparing the U.S. government to Soviet Russia, there are some lessons to be learned. As much as we might like a sensational story implicating top-level officials, the most common form of government misconduct does not usually involve devious scheming by politicians. Instead, it is often both less insidious and more invidious—the cumulative effects of misconduct by less-accountable, low-level officials who enjoy immense power over small areas of our lives.  

My father, an attorney, once told me he first started having vaguely libertarian thoughts after he began dealing with banking regulators. The regulators were relatively low on the chain of command, yet they held an incredible amount of power over their areas of concern, more than enough to make my father’s job very difficult. And they did. Similar stories happen all over the country, and sometimes they make it to the Supreme Court.

But most don’t usually make it to any court, much less the Supremes. The United States government is the most powerful organization the world has ever seen, and lower-level officials wield a small fraction of that power, which is still more than enough to make most people sit down and shut up.

I’m not saying that most government officials illegitimately use their power. I believe that the vast majority of government officials do not. I am saying, however, that many abuses occur and more can be expected if the government continues to grow larger and more powerful. It is simply too large an organization for anyone to control.