Tag Archives: subsidy

What to Think About the IRS Non-Scandal

25 Jun

When a political action group applies for – and receives – non-profit status as a 501(c)(4) it is asking for a public subsidy. Because it doesn’t have to pay tax on its income, every such dollar it gets to keep is a handout from the American taxpayer to that particular group. 

We’re not supposed to hand out handouts and subsidies arbitrarily for purely political purposes. A 501(c)(4) group is supposed to be engaged in educational or social welfare programs. These types of organizations are permitted to advocate for or against legislation, and to engage in other political activity, but only as an ancillary purpose – not a primary one.

This is why the “scandal” that idiot Washington and the right-wing faux-outrage industry have concocted regarding the IRS “targeting” of tea party groups is so fundamentally stupid. 

It is not just within the IRS’s power, but its job to determine whether a group applying for a 501(c)(4) tax handout is engaged in social welfare activity, or whether its primary purpose is political activism. If a group contains “tea party” in its name, there’s a good chance its application for a taxpayer subsidy should be rejected, since it sure seems more geared towards political activity rather than any social welfare program. 

The IRS has reacted out of an abundance of caution and stopped this particular practice, and there is no evidence of intentional wrongdoing. But were just tea party groups targeted? Not according to a newly released memo

An internal IRS document obtained by The Associated Press said that besides “tea party,” lists used by screeners to pick groups for close examination also included the terms “Israel,” ”Progressive” and “Occupy.” The document said an investigation into why specific terms were included was still underway.

The reason why the 501(c)(4) construct has been so popular? The group has no duty to disclose its donors

The Hospital Business

12 Dec

When Chris Collins said that Erie County was out of the hospital business, he was being deceitful – in this year’s case, to the tune of $23.8 million.  That figure would have been $40 million, but for a credit that the hospital is holding to the county’s credit.

It may be a tough nut, and depending on to whom you listen, it may  be fair and lawful. But it’s a huge subsidy that goes disproportionately to assist poor families in a poor county, and the county remains decidedly in the “hospital business” as long as the payouts continue.