Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
18 May 13
his systematic abuse cannot be fixed with just one resignation, or two," said
David Camp, the Republican chairman of the House tax-writing committee,
at an oversight hearing Friday morning dealing with the IRS. "This is
not a personnel problem. This is a problem of the IRS being too large,
too intrusive, too abusive."
David Camp has it wrong. There has been a "systematic"
abuse of power, but it's not what Camp has in mind. The real scandal is
that:
The IRS has interpreted our tax laws to allow big
corporations and wealthy individuals to make unlimited secret campaign
donations through sham political fronts called "social welfare
organizations," like Karl Rove's "Crossroads," the U.S. Chamber of
Commerce, and "Priorites USA."
This campaign money has been used to bribe Congress to
keep in place tax loopholes like the "carried interest" rule that
allows the managers of hedge funds and private equity funds to treat
their income as capital gains, subject only to low capital gains taxes
rather than ordinary income taxes, and other loopholes that allow CEOs
to get special tax treatment on giant compensation packages that now
average $10 million a year.
Despite a growing number of billionaires and
multi-millionaires using every tax dodge imaginable - laundering their
money through phantom corporations and tax havens - the IRS's budget has
been cut by 17 percent since 2002, adjusted for inflation. To manage
the $594.5 million in additional cuts required by the sequester, the
agency will furlough each of its more than 89,000 employees for at least
five days this year.
Finally, all of this, coming at a time when the
Supreme Court has deemed corporations "people" under the First Amendment
and when income and wealth are more concentrated at the top than
they've been in over a hundred years, has enabled America's financial
elite to further entrench their wealth and power and thereby take over
much of American democracy.
This is the real scandal and the real abuse,
Congressman Camp. Your indignation over the IRS's alleged "targeting" of
conservative groups is a distraction from the main event.
Robert B. Reich, Chancellor's Professor of Public
Policy at the University of California at Berkeley, was Secretary of
Labor in the Clinton administration. Time Magazine named him one of the
ten most effective cabinet secretaries of the last century. He has
written thirteen books, including the best sellers "Aftershock" and "The
Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
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