Assorted links

by on May 15, 2013 at 11:39 am in Uncategorized | Permalink

1 Michael May 15, 2013 at 11:55 am

+1 on Megan’s comments on the real scandal at the IRS. She is dead on.

2 Vivian Darkbloom May 15, 2013 at 3:44 pm

I would have agreed with you, had she not written this:

“The real scandal is that all these complicated tax rules exist. If we would just eliminate the corporate income tax, then people could organize groups, or not, just as they please. And the IRS would not be in the position of deciding what counts as excessive political activity.”

I guess Megan is right that if we eliminated the corporate income tax, there would be little need for section 501(c)(4). That section does not permit deduction of contributions, but those organizations really don’t have any “profits” to tax, in any event. The benefit of section 501(c)(4) is that donors don’t need to be disclosed.

Megan would have been much more to the point if she had argued that we should remove tax exempt status for all organizations under section 501(c). One need not eliminate the corporate income tax to achieve that and doing so would increase tax revenues, reduce bureaucracy and the political abuses inherent in a system that naively assumes section 501(c) organizations (not merely section 501(c)(4) organizations) are not political.

3 Givco May 15, 2013 at 9:17 pm

Except the massive non profit sector would make your proposal DOA. Or do you think Harvard, Red Cross, the Catholic church, and Sierra Club would be happy to start paying corporate income taxes on all income, from whatever source derived? Megan’s idea is better.

4 john personna May 15, 2013 at 12:03 pm

A week ago no one would have said the Tea _Party_ was more like the Sierra Club than a political party. Now it is a useful belief.

(Note that the Sierra Club leads thousands of weekly hikes across the country, and will teach you snow camping.)

5 Widmerpool May 15, 2013 at 12:06 pm

You view of the Sierra Club, while touching, is hopelessly outdated.

6 Widmerpool May 15, 2013 at 12:11 pm

Take a gander at their website.

7 john personna May 15, 2013 at 1:07 pm

You will find hikes under “local chapters” – if you were to plot hours of activity, they are overwhelmingly a hiking club. And heck when I hike with them (not a member) the big thing they push is their wilderness survival course.

8 enoriverbend May 15, 2013 at 1:27 pm

@john personna — if you were to plot dollars of activity, they are sooooo not a hiking club. And I used to be a member.

9 john personna May 15, 2013 at 1:51 pm

Gear included? Lol, expensive boots in that crowd.

10 Careless May 17, 2013 at 6:57 pm

And if you thought that “The Tea Party” is a 501 organization, well, you’re starting from a pretty silly place.

11 Rich Berger May 15, 2013 at 12:10 pm

The real big-picture scandal is that we have such a byzantine tax system that we require a vast invasive bureaucracy to administer it. So many opportunities for abuse and so much wasted effort to comply and game the system.

Time to push for a flat tax.

12 Alan Gunn May 15, 2013 at 1:02 pm

The idea that a flat tax will be a lot simpler than the tax we have is widespread and mistaken. Very few of the complexities of our tax system involve the rate structure, and we could easily adopt a simpler but just as progressive rate structure. The things that make the tax system an awful mess involve the tax base, not the rates, and you’ve got to define the tax base whether the rates are flat or steep or in between. The current scandal has nothing to do with rates: it involves organizations that claimed to be exempt from tax. That kind of issue doesn’t go away by having flat rates.

I’m not a fan of steeply progressive rates, so the idea of a flat tax has some appeal for me. But not because it would make the tax law a lot simpler, because it wouldn’t.

13 Rich Berger May 15, 2013 at 1:23 pm
14 Alan Gunn May 15, 2013 at 2:06 pm

I’ve read it. The simplification they propose comes almost entirely from changes to the tax base, not from having flatter rates. If we took the current tax code and changed the rates to something flat, our tax system would be almost as complex as it is today, and we’d need just as big a bureaucracy to administer it. You can have a simple system with either flat or progressive rates, and you can have a complex system with either flat or progressive rates. About the only contribution of flat rates to simplicity is that if the highest rates are fairly low, the pressure for special exemptions may be somewhat less. But not zero.

The 1986 tax reform act gave us the flattest rates we’d had in a long time. (Top individual marginal rate was 33%, advertised as 28% but that was a lie.) The base was even more complex than before the act was passed, and the size of the IRS didn’t decrease. And my tax casebook didn’t get shorter.

15 Rich Berger May 15, 2013 at 3:06 pm

Your comments belie your claim that you read it. Income is defined as direct payments. No treatment of income differently, no specific deductions beyond a standard exemption. Simpler, incredibly simpler. A change to a flat system like Hall-Rabushka has tremendous potential to revitalize the US economy.

16 Rich Berger May 15, 2013 at 3:14 pm

To see that a simpler code is possible, see the original Federal income tax return –

17 dead serious May 15, 2013 at 4:37 pm

“A change to a flat system like Hall-Rabushka has tremendous potential to revitalize the US economy.”

Just like tax cuts for the rich.


18 Alan Gunn May 15, 2013 at 3:40 pm

OK, you say “Income is defined as direct payments. … no specific deductions beyond a standard exemption….” These are changes to the tax BASE, not part of making the rate structure flat. You point to no complication in our present system that is attributable to the rates being progressive, though there are a few. But changing our present tax code by substituting a flat rate structure for the current rate structure would accomplish virtually nothing in the way of simplification. It would reduce the amount of time it takes for most of us to do our tax returns by a matter of seconds, if that. I certainly don’t deny that “a simpler code is possible.” But I do deny that having a flat tax is either necessary or sufficient to make it simpler: we have to fix the base to do that.

19 Andrew' May 15, 2013 at 1:32 pm

Most of what people want when they say flat tax is eliminating deductions.

20 Rich Berger May 15, 2013 at 1:38 pm

But only in conjunction with a reduction in rates.

21 Andrew' May 15, 2013 at 1:39 pm

But not really effective rates.

22 Andrew' May 15, 2013 at 1:40 pm

Offer me RomBama’s effective rates. Have a pen handy.

23 Andrew' May 15, 2013 at 2:05 pm

Btw, Rich, I’m defending your initial comment.

24 dickburger May 15, 2013 at 1:07 pm

A 65% flat tax for people named Rich Berger. Write it up.

25 Andrew' May 15, 2013 at 1:29 pm

How meta of you.

26 Brian Donohue May 15, 2013 at 1:21 pm

The fact that there are five tax brackets is at the end of a long list of factors responsible for tax code complexity.

This is not the flat tax argument you are looking for.

27 bjssp May 15, 2013 at 12:25 pm

Serious question: how many groups were denied the status under the law, both liberal and conservative? I haven’t seen a lot of numbers in this regard. This is important, because it relates to another serious question: were the groups targeted because they were conservative, or because they were applying for the status? For all the talk of persecution and trampling of rights, it’s not clear how many groups were really affected so much as they were inconvenienced.

28 j r May 15, 2013 at 12:28 pm

Being investigated is being affected. Spending three years being investigated by the IRS is a bit more than an inconvenience. There are costs, both compliance costs and opportunity cost.

29 bjssp May 15, 2013 at 12:39 pm

But this is why we need (more) numbers to make comparisons.

It’s not at all inconceivable that there was something legitimately wrong done in more than a few cases, but that much isn’t clear. How many groups were really investigated for three years or even really investigated? It was 300, according to one article, out of…how many? How does that compare to the usual length of investigations? How long did IRS look into the NAACP, for instance?

I realize it’s easy for people like McCardle and Joe Klein to make this into something more than it is, but if they were really targeting conservative groups, they’d have done a much broader inquiry. But maybe it was more political than I’d like to realize. Which is why, again, we need some (more) numbers. How many liberal groups applied for, and were investigated in some way, during this period?

30 Zach May 15, 2013 at 3:50 pm

It’s not at all inconceivable that there was something legitimately wrong done in more than a few cases, but that much isn’t clear.

You’re acting as though something the IRS has already investigated and admitted to is some kind of loopy conspiracy theory. The IRS specifically searched for terms identified with opposition to administration policies, and specifically targeted those groups for harassment. No statistical analysis is needed: we know the search terms they used.

31 bjssp May 15, 2013 at 4:27 pm

Yeah, except that there’s a lot getting in the way of the notion of some sort of witch hunt. To be sure, I am not saying what happend was right, only that it’s not clear there was specific partisan motivation for it. The link below indicates that no conservative groups had their applications denied, while some liberal groups, who were subjected to the same inquiries as conservative groups, had their applications rejected. And of course, not all Tea Party groups (or, would one presume, their equivalents, on both sides) were subject to additional scrutiny, given that something like 2,700 501(c) applications were submitted.

32 bjssp May 15, 2013 at 4:29 pm

Actually, scratch that 2,700 figure in the above post, as that figure was from 2012. Although one has to wonder what it was years back.

33 Zach May 15, 2013 at 6:15 pm

(There’s no reply link on the post I’m replying to. Hopefully this won’t screw up the order too badly)

The link below indicates that no conservative groups had their applications denied

No denial was necessary. A delay of 27 months means that the groups were frozen out of an entire election cycle. It means that they either spent lots of money on extremely onerous questionnaires or decided to go out of business. In other words, the harassment did exactly what it was supposed to do.

34 bjssp May 15, 2013 at 11:28 pm


That much is far from clear. What was preventing the groups from simply engaging election-related activities but not claiming non-profit status? Nothing, of course. And anyway, how many groups waited for years on end?

More importantly, how many organizations that weren’t a fireman’s association or some civic league, i.e. far less political than any random conservative or progressive group, but in fact partisan political groups, applied in total? I haven’t seen a number on this. It’s also not clear how many would likely be conservative or liberal. As I indicated above, it’s quite possible more conservative groups were being investigated because more were applying for tax exempt status.

35 mulp May 15, 2013 at 3:29 pm

Shall we apply that reasoning to the clinic Gosnell ran? Wasn’t Gosnell operating as if the conservative small government free market capitalist no government regulation health care was reality? Why aren’t Gosnell’s customers considered in all of this – think of the really gross toilet’s you have used at gas stations because you were so desperate to go, but you were unwilling to rent a hotel room – they were so desperate they paid to go into a clinic like that.

After all, shouldn’t it be acceptable to fund raise for jihadists seeking to overthrow the corrupt neo-commie Russian Putin occupation and oppression of Chechens on the same basis as the Tea Party?

And what of blacks targeted by police and prosecutors, and especially targeted for execution. All the extra questions and stop and frisks that blacks routinely experience are more of an inconvenience than that of groups with Tea Party in their IRS application.

Note that a group that meets the requirement for tax exempt status is tax exempt even before the IRS formally certifies it is, and a group certified as tax exempt that then fails to perform as a tax exempt group is no longer tax exempt. A donor is bound by the actual performance of the group, not the IRS certification – the certification merely means a tax deduction is in good faith, and thus not subject to penalty. A tax exempt group can keep on truckin while the IRS is processing the application while the black man is forced to stop and wait for the stop and frisk.

36 j r May 15, 2013 at 3:50 pm

What a weird species of argument: point to something else wrong and pretend that somehow changes the status of the original issue.

Let me make this easy. Stop and frisk is evil, pernicious and racist policy that should be stopped immediately. And the IRS should enforce the current law without using political litmus tests to guide their enforcement. See how easy that is.

37 bjssp May 15, 2013 at 4:32 pm

Here’s why we need more statistics, which I have yet to see. We need to know how many applications were submitted, how many were singled out on both sides, how many were rejected and approved, and so on. The implication that people are making is that liberal groups received no scrutiny, which isn’t true, while almost every conservative group did get investigated, which also isn’t true.

38 j r May 15, 2013 at 4:44 pm

These are the facts of the case:

“The IRS said on Friday that it inappropriately subjected groups applying for nonprofit status to extra scrutiny if their applications included terms such as “tea party” or “patriot.”

Why is it so hard to admit that this is a bad thing and that it should not have happened?

39 bjssp May 15, 2013 at 4:51 pm


I’m not denying that it was bad and that it was handled poorly and that it shouldn’t have happened, at least in the way it was done. I’m all for investigating further. My point was that we need more information before we can determine if it was politically motivated. Nobody is asking how many conservative groups in total applied (over a certain period) compared to how many liberal groups applied. (I scanned the IG report earlier, but I didn’t see many numbers.) This might seem banal, but you can’t investigate a group under these circumstances if they don’t apply. Lots of new conservative groups sprang up during 2010 and 2012; did lots of liberal groups form at the same time? And so on.

40 AndrewL May 15, 2013 at 6:04 pm


Are you even reading what j r is saying?

the IRS said that they were in fact using the search terms “tea party” and “patriot” to single out organizations to apply extra scrutiny. They admitted this fact, and they apologized for it, meaning they knew what they did was wrong and that they in fact did it. No statistical analysis required.

41 bjssp May 15, 2013 at 11:37 pm


I did read what he said. I said it would be enormously helpful to know how many groups applied, and other relevant statistics, because it would shed some light on how partisan the inquiries were, if at all. Only groups that applied for the status were investigated, and is it so hard to believe that there were far more conservative groups than liberal groups applying for non profit status during 2010 and 2012? Some liberal groups were denied, as I showed above, but this isn’t really complete because we don’t know how many applied.

This gets lost in the shuffle, but it’s well within the IRS’ right to investigate groups to make sure they aren’t violating the (admittedly murky) laws. They just need to not single out any groups. It looks like that might have been the case, but it would be very helpful to know what, if anything, happened with groups on the left that applied for the status.

42 bjssp May 15, 2013 at 12:26 pm

Also, it’s a bit rich for some to be complaining about this given that any attempt to have clear rules, or any rules at all, about this stuff is met with incredible opposition.

43 Widmerpool May 15, 2013 at 12:59 pm

If experience is any guide, the more effective solution is likely to be fewer rules, or not rules at all. But this is met with incredible opposition.

44 bjssp May 15, 2013 at 1:23 pm

That’s a fair point. Still, why isn’t there an outward call to either make the rules, however many there are, much more direct, or not to have any rules at all?

45 Widmerpool May 15, 2013 at 1:37 pm

I think the pro-rules-and-more-rules (and-certainly-as-few-clear-rules-as-possible) constituency (do-gooders, lawyers, lobbyists, legislators, bureaucrats, academics) is large, tenacious, well-placed and well-funded.

46 bjssp May 15, 2013 at 1:52 pm

I’m not sure I get your point…

47 Matt2 May 15, 2013 at 12:50 pm

Thanks for the tip on Peter Chang’s new place. This was where i heard about his Williamsburg location and depending on traffic Petersburg is just as close to Suffolk. Chinese down here is dreadful, and I don’t understand why because Japanese and Thai are both fine.

48 Dave T May 15, 2013 at 12:53 pm

I love Peter Chang’s China Grill in Charlottesville! I don’t know if he has it on his menu elsewhere, but get the pickled szechuan cabbage appetizer if he does. Or the Hot & numbing beef rolls, ma po tofu, double cooked pork. *stomach growls*

49 joshua May 15, 2013 at 1:12 pm

3. There’s a new real IRS scandal (I know, it’s getting hard to keep up)

50 Barkley Rosser May 15, 2013 at 2:39 pm

I can attest that the Charlottesville outlet is maintaining its quality, and reportedly Chang is there quite frequently, although he is supposedly living in Richmond now, nearest to the Glen Allen restaurant. I note that the headline to the story is wrong, as the Fredericksburg outlet will be his fourth, after Charlottesville, Glen Allen, and Williamsburg, to list them in the order that they opened. Let us hope that he does not get overextended and dilute the quality of the individual outlets.

51 whatsthat May 15, 2013 at 4:39 pm

#7: Excellent parenthetical comments

52 EorrFU May 15, 2013 at 5:06 pm

I am so excited to go to Peter Changs. The Glen Allen location was great but is quite a hike. Big fan of the dan dan noodles and my mom who doesn’t like spicy loved the coriander fish rolls. Also, the garlic cucumber dish is one of the most wonderfully strange things I have eaten bit was a perfect palate cleanser between the truly spicy dishes. I will eat just about anything dried fried there but my favorite was when they had a special on enoki mushrooms. The most interesting thing is how he uses cumin to enhance more traditional dishes and his cumin lamb is divine. I know where I am eating next week when the In-laws visit.

53 Mark Thorson May 15, 2013 at 5:30 pm

I fully agree with Robin Hanson’s first point — once we know how to make AI software, we may find that the hardware we have now can run it. I was saying that 30 years ago. I do not believe high bandwidth is required, unless you’re trying to do fine-grained emulation of individual neurons. That would be like trying to model an office building at the level of its individual molecules.

If we understood the general principles and implemented those in algorithms that lend themselves to our technology, I would not be surprised if the computers we had in 1980 could run a human-like AI. Nothing done by the human brain occurs at megahertz speed. Nobody can read much faster than 100 characters per second. Although the brain seems to have massive parallelism, reaction time experiments show that even complex cognitive problems such as solving math equations only require 10 or 20 neural layers from input (eyes or ears) to output (pressing a button). Once we discover how to build an AI, we may find that our computers today are already thousands of times faster than needed to run it.

54 Baphomet May 16, 2013 at 4:23 am

The man’s name was Edgar ALLAN Poe.

55 willitts May 16, 2013 at 12:33 pm

3. The real problem with the real problem is that the author expects government employees to understand statistics. Unlike his analogy of cancer researchers, these people aren’t scientists; they are bureaucrats.

They are also bureaucrats represented by a public employees union that is openly hostile to Republicans. Im not saying that the rank and file are all liberal, but that they are influenced in that direction.

In my years of sitting on Boards of nonprofits and managing gifts and bequests to foundations and endowments, I can tell you that nonprofits make Enron look like stealing the tip jar. Fraud and mismanagement is rampant, and neither the left nor the right wants there to be serious inquiry into this because both sides of the bread are buttered.

In this case, the IRS got in trouble because they broke the truce between two organized crime syndicates.

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