Judging the IRS

A wave of scandal has enveloped the U.S. government. The administration—at what level of seniority is not yet known—appears to have used the IRS to suppress its political opponents, in this case Tea Party conservatives and pro-Israel groups.

In investigating cases, the Roman jurist Lucius Cassius famously asked “Cui bono?”—who benefits. His insight was that the wrongdoer is someone who had something to gain. Given that every IRS victim was on the opposite end of administration policy, we can probably dispense with the notion this was just a rogue operation.

We saw abuse of this kind a generation ago by the Nixon White House. If an administration of whatever ideological persuasion uses intimidation tactics to suppress views with which it disagrees, then a basic guarantee of the Constitution has been violated.

But, while the IRS is under scrutiny, an economic dimension also bears consideration.

Our first chief justice of the United States, John Marshall, famously stated (and I paraphrase) that the power to tax is the power to destroy. If the government doesn’t like something or someone, it might try to tax it out of existence.

The economy is improving of late, but in a way that should worry us: expanding but with fewer people working. Amid high unemployment, we should be loath to destroy jobs by taxing people’s production (via their income).

I don’t believe the administration hates entrepreneurs as it may the Tea Party. Its advocacy for higher taxes stems from a vision of social justice: rich paying more than poor.

But such a vision can be pursued in other ways. A tax on consumption (excluding necessities like food and shelter) would ensure that Warren Buffett pays more taxes than his secretary.