Tuesday, February 7, 2023

Vermont Lawmakers Don't Really Want that 501(c)(3) Political Smoke

And Just Like That…You Wonder: How Bad Are Cigars?


Some people question whether Einstein really said "Three great forces rule the world:  fear, stupidity and greed."  But I saw an Einstein meme on Facebook the other day so I know he said it.  What I could not find, on Facebook or anywhere else, was any good reason why a state would ever adopt a stronger version of IRC 501(c)(3)'s limitation on lobbying and prohibition against campaign intervention.  If the two Vermont legislators who introduced H.113 last month think its good for simplification, equity, or anything else, I wish they would explain.  I think this proposal is motivated by stupidity.  Here is the text:

Subject: Taxation; property tax; exemption; public, pious, and charitable uses; lobbying

Statement of purpose of bill as introduced: This bill proposes to clarify that  churches and other public, pious, or charitable organizations are not eligible for the State property tax exemption if those organizations engage in any lobbying or other political activity on their property. Churches and nonprofits will also be required under this bill to certify annually to the Vermont Department of Taxes that the organization does not conduct any lobbying or political activity on the property that would disqualify the organization from the exemption.


(a) The exemption from taxation of real and personal estate granted, or used for public, pious, or charitable uses shall not be construed as exempting:

. . . 

(8) real property on the premises of which any lobbying or other political activity occurs as defined under 26 U.S.C. §§ 170(c)(2)(D) and 2 501(c)(3).

I searched but could not find any explanation why Vermont should adopt a whole can of useless worms.  That's probably to be expected because the federal counterpart, upon which the law is explicitly based, is nothing more than "because I said so" law.  Remember when you wanted to understand why you couldn't hang out late on a school night, and mama said "because I said so"?  That's what the political restrictions in 501(c)(3) are.  No apparent reason, just do it "because I said so."  Am I right or wrong?

The federal lobbying restriction wasn't in the original law that evolved into IRC 501(c)(3).  Treasury adopted a regulatory prohibition on substantial lobbying when lobbying was considered synonymous with indoctrination and propaganda, indoctrination and propaganda with totalitarian government, and that, finally, with Hitler Mussolini, Tojo, and Stalin.  In the wake of WW2, and the dawning of the Cold War, Americans were especially fearful of political tyranny.  They wanted to deny subsidies to what we now call "action organizations" and PACs, because propaganda and indoctrination were associated with totalitarian political speech.  Its all right here in this really good article I found while researching hate groups.  And legend has it that the "Johnson Amendment" was inserted "in the middle of the night," or at "the last minute" (take your pick) to help LBJ punish a Texas nonprofit for supporting a political opponent.  In other words, the lobbying restriction and prohibition on campaign intervention no longer serve any good purpose (if they ever did) that is worth all the trouble those restrictions/prohibitions cause.  And even if they did, they are unenforceable as a pragmatic matter.

I mean, let's face the facts!  The approximately 70 year old political activity prohibitions have been about as unsuccessful and  counterproductive to the public good as the 18th Amendment was in the effort to stamp out drinking alcohol.  People and groups will always drink politics, no matter what the law says.  Its just never gonna work and we are diverting unnecessary resources from groups who must bear the expense of disguising or defending their political urges, and from good enforcement because the Service has to play expensive and time consuming cat and mouse games with the organizations, all while dodging partisan attacks from all sides.  We should jettison political restrictions.  How, after all, does prohibiting grassroots from grassrooting perpetuate democratic values the way Alexis described?

And Vermont should remember that those "simple" prohibitions begat pages and pages of regulations and administrative pronouncements, and tattle-telling, and are subject to increasing litigation and skepticism regarding their constitutionality. And then there are all a whole buncha church and state issues stinking up the place.  


So for a state legislature to just blindly adopt IRC 501(c)(3)'s political restrictions is really a shame. Trust me, Vermont, you don't want this smoke.


darryll jones 


| Permalink


Post a comment