Legislate, Don’t Agitate

(MCT) -

Today’s lawmakers have plenty to say. Each legislative session is packed with hearings, press releases and news conferences. But should we even bother listening?

Consider the simmering Internal Revenue Service scandal. We know that the IRS singled out conservative groups for special scrutiny. Its own inspector general acknowledges as much.

“The effort to single out tea party groups goes back to March 2010 when a special Determinations Unit in the Cincinnati office of the IRS began searching tax-exemption applications that focused on groups on one side of the political spectrum, rather than broadly on political groups without a social-welfare mission,” The New York Times reported last year.

Why the attention? Perhaps the bureaucrats at the IRS were simply listening to legislators. After all, they repeatedly called on the IRS to step up its regulatory oversight:

• “Senate Finance Committee Chairman Max Baucus (D-Mont.) today sent a letter to IRS Commissioner Doug Shulman requesting an investigation into the use of tax-exempt groups for political advocacy,” begins a news release put out by the senator in September 2010.

• “Assistant Senate Majority Leader Dick Durbin (D-Ill.) urged the Internal Revenue Service to quickly investigate the tax status of Crossroads GPS and other organizations that are directing millions of dollars into political advertising without disclosing their funding sources,” begins a news release put out by the senator in October 2010.

• “Colorado U.S. Sen. Michael Bennet, along with Sens. Al Franken (D-Minn.), Chuck Schumer (D-N.Y.), Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Jeanne Shaheen (D-N.H.) and Tom Udall (D-N.M.), today called on the Internal Revenue Service to investigate whether organizations claiming tax-exempt status are engaging in a substantial amount of campaign activity,” begins a news release put out by the senators in February 2012.

It’s difficult to blame the bureaucrats at the IRS for thinking that the elected members of the U.S. Senate wanted them to investigate conservative groups: “shadowy groups with harmless-sounding names,” as President Obama put it in August 2010.

And, in fact, then-IRS official Lois Lerner did zero in on the target Durbin had suggested. “The organization at issue is Crossroads GPS, which is on the top of the list of c4 spenders in the last two elections. It is in the news regularly as an organization that is not really a c4,” she wrote in an email. “You should know that we are working on a denial of the application, which may solve the problem because we will probably say it isn’t exempt.”

Sen. Levin suddenly postponed hearings last year when he learned that the IRS was doing what he’d been asking it to do. But perhaps the legislators should review a different law: The law of unintended consequences.

As happened in the IRS case, when lawmakers speak, people sometimes take them seriously. In 2008, Sen. Schumer released a letter that “expressed concerns about IndyMac’s viability.” In the next two weeks customers pulled $1.3 billion from the bank. It then, predictably, collapsed.

A mere failure to regulate, Schumer said at the time. The Bush administration ought to “start doing its job to protect the future of the banking system, so that there won’t be other IndyMacs,” he insisted. Instead of agitating, he could have legislated, though. There’s a way to address both problems: Simplify both the tax code and banking laws.

On April 15, former Defense Secretary Donald Rumsfeld had some fun, releasing an open letter to the IRS. “The tax code is so complex and the forms so complicated, that I know that I cannot have any confidence that I know what is being requested and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate.”

But it’s not really funny. When the law is too complex to understand, it’s impossible to comply with. A flat tax would change that.

When it comes to banking, “far from a free market, it was one of the most regulated industries in the world, funded by taxpayer subsidies and with lending decisions taken by the state,” The Economist explains. And events since 2008, including the Dodd-Frank law, have only added to the number of regulations.

Lawmakers have the power to simplify our country’s statutes, making them easier to understand and comply with. Such actions would speak louder than a torrent of words.