'Logrolling' the Nonprofits

"Don't bother to examine a folly, ask yourself only what it accomplishes. -- "Ellsworth Toohey" in The Fountainhead, by Ayn Rand

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Over at the Foundation for Economic Freedom is an article about an innocuous-sounding proposal called "Stop Terror-Financing and Tax Penalties on American Hostages Act."

Said proposal unfortunately happens to exemplify a corrupt legislative practice called logrolling, and it's being used to create a situation practically guaranteed to result in a form of soft censorship.

(I will note, but otherwise overlook the unfortunate use of the blurry, conventional meaning of the word selfish in this otherwise informative piece.)

What is logrolling, and, more important, what does it accomplish?

The answer comes quickly when Peter Jacobsen comments on the text of HR 9495:

Image by Texture39, via Wikimedia Commons, license.

Interesting what a pivot we take in the last sentence there. The first part of the bill seems like a great idea. It's shocking that our system doesn't already have a mechanism for waiving late tax payments for people held hostage by terrorists.

But then, we tack on one more thing -- no more tax-exempt status of terrorist-supporting organizations. This part of the bill has earned it a nickname: the "nonprofit killer."

This seems like two totally different things attached by a staple. This is likely intentional and is a classic strategy in modern American politics. By lumping these two things together, representatives can use the hostage income tax abatement part of the bill to explain why they voted for it.

One way to think about this is that supporters of the second part of the bill are getting politicians who are on the bubble to vote for the bill by giving them something they like in return (the hostage tax abatement). Economists call this logrolling. [link omitted]

As Jacobsen elaborates further, this measure would make the tax system more easily abused to punish nonprofits the powers-that-be dislike.

Are there not enough legislators to pass the tax relief part of this on its own? Are there not already laws against aiding and abetting our military enemies? Is de facto censorship of nonprofits popular enough with our representatives that they figure they need just a few more votes from the gullible or the easily-bribed to pass this?

We face these questions today because so few dare challenge the propriety of taxation overall or even in particular all the stupid complexity of the tax code. That complexity enables everyone to pretend that getting less of their own money stolen every year is some kind of sweetheart deal. In fact, it really provides numerous opportunities to ensure that almost any productive individual is, legally, a criminal if you look hard enough.

Economists also say, Controls breed controls, but the phenomenon bleeds over into areas most don't think of as economics. We see this here in spades, and it is the consequence of too many people taking freedom for granted or lacking the moral conviction to speak up for it consistently.

In failing to speak up for tax freedom yesterday, we stumble today a little bit closer to a time when we won't be able to speak up for anything at all.

-- CAV