Freedom Line Blog

In our Liberty Update this week, we highlight the latest illegal leak of thousands of supposedly confidential Internal Revenue Service (IRS) taxpayer returns spanning over 15 years, confirming that the partisan and power-hungry IRS simply cannot be trusted to safeguard our sensitive records, let alone to begin collecting sensitive private information from nonprofit organizations on donors who contribute to them in violation of the First Amendment.

Getting to the substance of the ProPublica/IRS leaked documents themselves, former Senator Phil Gramm and U.S. Policy Metrics partner Mike Solon explain in The Wall Street Journal how there’s nothing scandalous in the least in what they reveal:

ProPublica’s ‘blockbuster’ story showing that the wealthy ‘pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year, looks at first like a stunning revelation.  But the whole tempest plops into a teapot once you ask yourself:  How much of the total growth in the value of my home, retirement funds and business did I pay federal income taxes on last year?  The answer is none.  Nobody pays federal wealth taxes in America, but ProPublica and its Democratic allies are using stolen tax returns to try to change that.”

As they correctly conclude, suddenly imposing a nonsensical “wealth tax” would not only be unfair, but destructive:

Proponents of a federal property tax on wealth offer guarantees and protections that they will only tax the superrich like Mr. Buffett, promising not to touch your retirement plan, home, farm or business.  But the federal income tax started out only taxing the superrich like John D. Rockefeller.  The same politicians who promise to protect you from the federal wealth tax voted to impose income taxes on ‘wealthy’ Social Security retirees with an annual incomes above $25,000.  And these are the same politicians who are proposing to tax your businesses and farms at 43.4% when you die, before they take another 40% in death taxes.  In taxing wealth we eat the nation’s seed corn.  That may be worth it to politicians who want power, but for most Americans a wealth tax, whether they have wealth or not, would mean fewer jobs, lower wages and less opportunity for human flourishing.”

Well said.

In this week’s Liberty Update, we highlight the ironic absurdity of the “authentic” label constantly applied to 2020 Democratic presidential candidate Bernie Sanders, as his long career exposes him as perhaps the least authentic candidate of all.  His behavior simply doesn’t match his professed beliefs, including on so-called “campaign finance reform” laws (which violate Americans’ First Amendment rights).

In that vein, The Washington Post today highlights how the powerful Service Employees International Union (SEIU), perhaps the most powerful labor union of all, plans on spending a whopping $150 million – a record amount – to elect Democrats in November:

The Service Employees International Union plans to spend $150 million this year to get out the vote for Democrats in November, its largest political investment ever.

The union will deploy canvassers across more than 40 states, but its efforts will mainly focus on turning out infrequent voters from the African American and Latino communities across the eight battleground states of Colorado, Florida, Michigan, Minnesota, Nevada, Pennsylvania, Virginia and Wisconsin.

SEIU President Mary Kay Henry previewed the strategy to defeat President Trump during an extended interview in her office off DuPont Circle in Washington.  The union, which represents 2 million members, has opted not to endorse in the presidential primary, at least for now, but to focus instead on building a massive field operation to help whoever emerges from the convention this summer, as well as Democrats down the ballot.”

Wait…  A DuPont Circle office?  Pretty posh for an organization pretending to represent the interests of working-class members.  And if things are as bad for American workers today as the SEIU and leftists constantly claim despite all of the evidence to the contrary, why are they redirecting $150 million from dues paid by their own members toward nakedly partisan political purposes?

And more broadly, aren’t leftists the ones constantly claiming that we must “get money out of politics?”  Any chance that any of the Democratic candidates who stand to benefit from this will call them out and practice what they preach?

Don’t risk suffocation by holding your breath.

In this era of increased harassment and persecution of people on the basis of political viewpoints and First Amendment expression, there’s actually good news to report.

In fact, that positive development comes from none other than the Internal Revenue Service (IRS), which few people typically consider a font of good news.

Specifically, the IRS just announced a proposed rule to stop requiring nonprofit organizations to file what’s known as a Form 990 Schedule B, which exposes sensitive donor information not only to the federal government and potential rogues like former IRS official Lois Lerner, but also people who seek to access and use that information to target people on the basis of political belief.

As we at CFIF have long asserted, this welcome move will help protect the privacy of American citizens, which the U.S. Supreme Court unanimously ruled in NAACP v. Alabama (1958) is critical to preservation and exercise of the First Amendment’s rights to free speech, freedom of association and freedom to petition government:

Effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association, as this Court has more than once recognized by remarking upon the close nexus between the freedoms of speech and assembly.  It is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the ‘liberty’ assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech…  This Court has recognized the vital relationship between freedom to associate and privacy in one’s associations…

The Supreme Court in that seminal ruling rightly drew a straight-line connection between privacy of one’s associations and donations and the ability to exercise one’s First Amendment freedoms:

[R]evelation of the identity of its rank-and-file members has exposed these members to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility.  Under these circumstances, we think it apparent that compelled disclosure of petitioner’s Alabama membership is likely to affect adversely the ability of petitioner and its members to pursue their collective effort to foster beliefs which they admittedly have the right to advocate, in that it may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs shown through their associations and of the consequences of this exposure. 

That logic applies with even greater force today, as we’ve witnessed time after time, because of the modern ability to instantly identify, locate and stalk people whose political views one finds disagreeable.

As we’ve further noted, the IRS acknowledges that it doesn’t even use the collected information for any substantive purpose in enforcing the nation’s tax laws, and the IRS isn’t even the agency in charge of enforcing so-called “campaign finance reform” laws in any case.  Accordingly, the information only serves to expose people to potential targeting.

CFIF enthusiastically supports this IRS decision, which will help protect the right of American citizens to exercise their First Amendment rights.

ALEXANDRIA, VA – In welcome news, the U.S. Treasury Department and Internal Revenue Service (“IRS”) announced yesterday evening that the IRS will finally cease requiring certain nonprofit organizations to file “Schedule B” forms that list sensitive personal information like the names, addresses and other identifying information about private citizens who donate to those organizations.

In response, Center for Individual Freedom (“CFIF”) President Jeffrey Mazzella issued the following statement:

“As many Americans are all too aware, recent years have witnessed an increase in assaults against our First Amendment freedoms of speech and association.  In some cases, the IRS has collected and leaked private information on contributors to 501(c) nonprofit organizations contained in mandatory Schedule B forms that by law were to remain confidential.  And across America, hyper-partisan government state-level officials have demanded Schedule B forms and confidential donor information contained therein as part of their campaign to harass organizations and donors with whom they disagree politically.

“With this announcement, the IRS and Treasury are acting on the acknowledgment that Schedule B information is irrelevant to its handling of tax filings, and serves no substantive purpose. In this era of persecution of private citizens for their political beliefs, together with the IRS’s admission that it can’t guarantee the confidentiality of the information contained on the Schedule B, this decision is welcome news.

“We at CFIF applaud the Trump Administration Treasury Department and IRS for their leadership and doing the right thing by eliminating the Schedule B form filing requirement for many nonprofit 501(c) organizations.”

CFIF has spearheaded the broad conservative and libertarian coalition to eliminate the Schedule B from filing requirement, including, among other efforts, coordinating a letter to President Trump and Treasury Secretary Steven Mnuchin earlier this year signed by more than 60 influential organizations and individuals urging executive action to accomplish that end.

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In the Mario Lopez interview immediately below and a recent Liberty Update piece noting a welcome federal court victory, CFIF continues to emphasize and oppose ongoing official governmental efforts to intimidate and silence conservative donors:

[P]ublic officials and vindictive private citizens persist in demanding access to membership records and donor lists of conservative and libertarian organizations whose missions they deem unacceptable.  Anyone requiring confirmation need only look to Internal Revenue Service (IRS) harassment of pro-Israel and conservative nonprofit groups, or California citizens driven from their jobs simply for advocating a position on marriage that even a majority of state voters at the ballot box.

A recent federal court ruling in California vindicates donor privacy and the logic underlying [the Supreme Court ruling in] NAACP v. Alabama.”

On the same note, it’s worth highlighting Congressional legislation led primarily by Ways and Means Oversight Subcommittee Chairman Peter Roskam (R – Illinois) targeting Internal Revenue Service (IRS) abuses that deserves our support.  Specifically, the House of Representatives recently passed a set of reforms to stop IRS abuses, improve protections for everyday American taxpayers and finally hold IRS officials accountable for official misconduct.  Here’s what the package of reforms would accomplish:

1. Force the IRS to implement the Taxpayer Bill of Rights;
2. Prevent the IRS from targeting donors to nonprofit organizations;
3. Prohibit IRS officials from using private email accounts to conduct official government business;
4. End IRS abuses of taxpayer privacy protections;
5. Allow social welfare nonprofit organizations to self-declare their tax-exempt status rather than subject themselves to politicized IRS stalling tactics;
6. Allow organizations to appeal IRS denials of their tax-exempt status applications;  and
7. Immediately terminate IRS employees found guilty of targeting Americans on the basis of political bias.

It’s a good sign that IRS abuses and other governmental efforts at the federal, state and local levels targeting Americans – especially conservative and libertarian Americans – who simply wish to exercise their First Amendment rights have been exposed.

But that’s not enough.  We can’t let the opportunity to actually change the atmosphere in which these abuses occurred, and prevent similar abuses going forward.  Americans of every political persuasion should therefore contact their elected representatives and the White House to demand their support for these common-sense reforms.