The voices of Tax Policy Center's researchers and staff
This week two law professors and President Trump agreed: The tax code should include a political litmus test. They came at the issue from vastly different perspectives. But they reached the same conclusion: Those with whom we agree should be treated differently under the tax laws than those whose views conflict with—or even offend--the majority.
Let’s start with the professors. In a Tuesday New York Times op-ed column, Valparaiso University professor David J. Herzig and Loyola University Chicago professor Samuel D. Brunson argued that the IRS should revoke the tax exempt status of white supremacist groups that “sponsor violence against racial or ethnic minorities.” Further, they said the agency should “scrutinize” any group “that proclaims the superiority of whites, or supports the separation of the population by race.”
A terrifying argument
The lawyers support their case by arguing that the views of these right-wing groups violate a “fundamental public policy.” Their proof: The hate groups have been widely condemned by a long list of public officials.
This line of argument is terrifying.
Let me be clear: The views these hate groups espouse are appalling. Nearly all of my mother’s family was murdered by Hitler’s Nazis. It is not hard for me to condemn contemporary American organizations that venerate Hitler’s views or parade behind KKK banners. And certainly groups that promote violence go far beyond the educational, charitable, or social welfare tests that the IRS requires to grant a tax exempt status to an organization.
But what of a group that merely “proclaims” unpopular views, no matter how vile or hate-filled? Do we really want the IRS to decide whether a group’s opinions are acceptable and thus whether its deserves to be tax-exempt?
A slippery slope
When the professors say the IRS should use as evidence the groups’ condemnation by a broad spectrum of politicians, they are not just going down a slippery slope. They are pushing the tax system down an Olympic-sized giant slalom course.
They may have forgotten that during World War I, pacifist groups were roundly criticized as unpatriotic by many politicians of both parties. So was the NAACP in the 1940s and 50s and Dr. Martin Luther King and the Southern Christian Leadership Conference in the 1960s. All were viewed in their time as far out of the political mainstream. Many politicians considered them existential threats to the security of the US.
Do the professors really believe that the IRS should grant tax-exempt status to groups based on their popularity or political convenience? Isn’t that what some conservatives alleged (without evidence) the IRS was doing to Tea Party groups during the Obama Administration?
Who is a loyal American?
When I read their essay, I wondered what would the professors would think if the IRS was controlled by a government with which they did not agree, and which began imposing its own ideological litmus test on those promoting ideas it did not like. Such as, say, lifting the tax-exempt status of groups that call for “resisting” the current administration. After all, resistance can include violent opposition.
Then I heard President Trump’s Aug. 31 pitch for a big tax bill. In that speech he seemed to be imply exactly that. He promised a tax cut that would “benefit loyal, hard-working Americans and their families.”
Loyal Americans? What could he mean? Is he endorsing tax cuts for all Americans or only for those who voted for him? Or who buy a USA baseball cap from his website? Or perhaps only those who express views that are widely supported by large numbers of politicians? And what of those whom he excludes from that group of loyal Americans? That brings us back to the professors.
Of course, tax-exempt status of organizations is not the same as tax treatment of individuals. And there are many forms of tax-exempt status, each of which carries different benefits to the non-profit as well as its contributors.
We can have a good healthy debate about whether Congress should bar any organization that espouses political views from receiving a tax-exemption. But in their disparate ways, the professors and the president are taking us down a very different and dangerous road where opinions lead to distinctions in tax treatment. We ought to think carefully about where that path ends.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
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