Mises Wire

The IRS’s History of Attacking Political Dissenters and Opponents

The US purports to be the land of free speech, but you can always expect politicians to carve out exceptions. Just look at how government agencies such as the Internal Revenue Service can slither their way into the political affairs of individuals and organizations.

Americans generally associate the Internal Revenue Service with the hassle of filing income taxes every April. Of course, this is an annual ritual that Americans have been accustomed to for over a century, and it represents one of the numerous ways the federal government violates Americans’ economic freedoms. Income taxation is also one of the main enablers of government growth thanks to its ability to extract hundreds of billions of dollars from hardworking taxpayers annually. In 2019 alone, the IRS collected nearly $3.5 trillion in tax revenue.

The IRS’s misdeeds aren’t just limited to economic activity, though. Most would be surprised to find that the IRS is a violator of free speech rights. When IRS agents aren’t finding ways to squeeze as much revenue as humanly possible from taxpayers, they try to make the lives of America’s most civically engaged miserable.

The IRS as a Political Tool

Former congressman Ron Paul shed light on the IRS’s anti–free speech activity last year in a piece voicing concerns about income tax privacy. In 2019, House Democrats tried to pull every legislative stunt possible to get President Trump to hand over his tax returns. Although these efforts did not materialize into anything substantial, the New York Times published some of Trump’s tax returns from the 1980s and 1990s. The Times’s publication of the returns raised speculation about a potential leaker in the IRS handing this information over to the news outlet.

Right off the bat, Paul understood the bigger picture. As the history of government expansion has shown, government agencies such as the IRS have a nasty way of sneaking into other parts of our lives. What originally started out as an agency solely focused on taxes has morphed into an omnipresent government body that can control political behavior. Paul cited several examples of IRS politicization, including Franklin Roosevelt’s auditing of New Deal opponents, John F. Kennedy’s use of audits against political opponents, and the agency’s investigation of a church hosting an antiwar sermon during the Bush era. One of the more recent cases of IRS harassment of political opponents occurred when it placed Tea Party groups under increased scrutiny when they applied for tax-exempt status.

The IRS’s history shows that its abuses go beyond partisan politics, seeing how the agency has been used as a cudgel to smash opponents from across the political continuum. From a big-picture perspective, political advocacy in America is excessively regulated. Thanks to so-called campaign finance reform, now political organizations have to worry about complying with a whole set of new regulations—as if the IRS breathing down their necks wasn’t enough.

Just a minor slipup could have IRS or other regulatory agents storming an organization’s office. This is typical of the administrative state era we live in, in which filing the wrong paperwork could land someone behind bars. Because we all know that those dastardly political rabble-rousers not hitting the right bureaucratic checkboxes present a clear and present danger to the rest of society.

State Governments Have Followed the Federal Government’s Lead on Political Harassment

Even after the Supreme Court case Citizens United v. FECwhich ruled that the First Amendment prohibits the government from restricting the ability of political organizations to use independent expenditures for political communications—government entities still find creative ways to stifle political speech. At the state level, governments have taken advantage of regulatory functions to poke and prod organizations that cause too much trouble. Politicians launch “ethics reform” campaigns, where they use ethics commissions and similar bodies to muzzle speech. Politicians will construct narratives saying that they’re fighting against corruption, when all they’re really doing is curtailing the efforts of dissident groups to expose the political class’s dirty laundry.

In 2014, a grassroots gun rights organization, Palmetto Gun Rights, faced harassment from the most unlikely place—the office of then Republican governor Nikki Haley. The South Carolina governor was supporting an ethics reform bill (H 3945) that would have forced an organization or an individual making an “an electioneering communication” to report the “top five donors to the reporting person” to the State Ethics Commission. “Electioneering communication” in this case meant “any broadcast, cable, or satellite communication or mass postal mailing or telephone bank” referring to “a clearly identified candidate for elected office” and that is publicly “aired or distributed within sixty days prior to a general election or within thirty days prior to a primary for that office.” So, if a political organization in South Carolina had some mean things to say about a politician in the finals days of election season, their biggest donors could potentially be fair game for political harassment.

On the other side of the spectrum, groups such as the National Rifle Association have recently witnessed government agencies launch politically motivated investigations against them. Despite what the media says about the NRA, they’re no extremists on the gun issue. However, that has not kept states such as New York from trying to snoop around their private affairs. Twenty nineteen was a rough year for the NRA due to various episodes of internal drama and leadership disruption. Things got even more heated when the New York attorney general decided to investigate the group for “financial improprieties” and threatened to strip the organization of its nonprofit status. None of the investigations have resulted in concrete actions, but the NRA’s interaction with the New York State government illustrates that even the most milquetoast of advocacy groups isn’t safe from the clutches of regulators.

The regulation of economic activity in this stage of American history has undeniably evolved into a mechanism of behavioral control. It’s no longer about whether an individual will have X amount of dollars left after the government takes its share of the loot. Now, people’s political activities, such as their speech, can be subject to political micromanagement.

It’s not enough to just talk about the numbers when making the case against economic regulations. These regulations are ultimately enforced by massive government agencies, which politicians can manipulate in clever ways to suit their own ends. Add in the round-the-clock growth of government agencies, and you’re now dealing with institutions that have the power to branch out into other activities.

By limiting themselves to ho-hum discussions about tax policy, advocates of government restraint ignore some of the biggest threats coming from bureaucratic mammoths. A crusade against bureaucracy is long overdue in America.

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