tea parties and abusive sovereigns-by paul f. hannan

TEA PARTIES AND ABUSIVE SOVEREIGNS

by Paul Hannan

The Internal Revenue Service (hereinafter the IRS) should be eliminated from the

American dictionary, as well as from its branches of government. As it was with King George III

nearly 245 years ago today, the IRS has proved itself unworthy of the American people’s trust, as

well as its funding. A flat earnings tax, along with a simplistic spending tax, is all that’s required

to fill its shoes, saving the American government and its tax payers nearly nine billion dollars per

year.1

A Brief History of the IRS

But constant experience shows us that every man invested with power is apt to abuse it, and to

carry his authority as far as it will go.2

“That collection of taxes is vital to the functioning, indeed existence, of government

cannot be denied.”3 Montesquieu, in The Spirit of The Laws, discussed the need of “taxation for

the augmentation of troops.”4 Consistent with these sentiments, Hobbes states that the “sovereign

is commander and chief of the army . . . and will have the ability to tax subjects for the cost

thereof.”5 Further, Hugo Grotius asserts: “Nations can have no peace without Arms, no Arms

without Pay, and no Pay without Taxes.”6 And it was for this very same purpose that America’s

1

1 Howard Gleckman, IRS Gets Hammered in the 2014 Budget Agreement (January 14, 2014) (based on the excess of ten billion per year spent presently, minus approximately one billion for a greatly simplified replacement tax recovery system).

2 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent, trans. p. 137 (2010)

3 United State v. Kimbell Foods Inc. 440 U.S. 715, 734 (1979)


5 Thomas Hobbes, Leviathan, Edwin Curley, trans. p. 114 (1994)

6 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 215 (2005) (Citing Tacitus) (emphasis in the original)

income tax scheme was established. Indeed, the genesis of the IRS dates back to “the Civil War

when President Lincoln and Congress, in 1862, created the position of commissioner of Internal

Revenue and enacted an income tax to pay war expenses.”7 Although “the income tax was

repealed 10 years later.”8 Congress subsequently “revived the income tax in 1894, but the

Supreme Court ruled it unconstitutional that following year.”9 The 16th Amendment, which gave

Congress the authority to implement an income tax, was approved by the “three-quarter majority

of states necessary to amend the Constitution.”10 And while the 16th Amendment did not cut the

income tax entirely away from its original “fund the military” moorings, it certainly gave

Congress leave to expand its criterion for tax revenue spending. It was shortly thereafter that

“Congress levied a one percent tax on net personal incomes above $3,000 with a six percent

surtax on incomes of more than $500,000.”11 However, to the astonishment of the nation’s

populace, during World War I “the top rate of the income tax rose to 77 percent to help finance

the war effort.”12 The tax rate was thereafter reduced to a twenty-four percent cap, but then “rose

again during the Great Depression.”13 And it was during World War II, that “Congress introduced

payroll withholding and quarterly tax payments.”14

2

7 IRS.gov, A Brief History of the IRS (March 7, 2015)

8 Id.

9 Id.

10 Id.

11 Id.

12 Id.

13 Id.

14 Id.

During the 1950’s this tax agency was “reorganized to replace a patronage system with

career, professional employees.”15 Further, the agency’s name was also modified, and thus

became the Internal Revenue Service. Presently, with nearly 100,000 employees,16 the IRS

constitutes an appreciable segment of our government. Yet “only the IRS commissioner and

chief counsel are selected by the president and confirmed by the Senate.”17 As large as this

organization is, it is thus unsurprising to discover that it has been plagued by failures of

equivalently large scale measure. Yet the IRS has, in the past, acknowledged many of these --

often glaring -- shortcomings. Indeed, in an attempt to cure the agencies many deficiencies and

failures, particularly with regard to the harsh treatment of countless individual taxpayers in the

past, Congress enacted the IRS Restructuring and Reform Act of 1998.18 The objective of this

Act was to create “a friendlier and gentler giant,”19 to get the IRS “to closely resemble the

private sector model of organizing around customers with similar needs.”20 However, the reader

must not fail to recognize that “customers” are customarily defined as voluntary users of

services. Hence, the IRS’ objective, albeit lofty and noble, strike the lion’s share of tax payers as

little more than illusory.

In spite of this considerable need for governments to draw a significant revenue base

through the taxation of their citizenry, the treacherous waters of taxation are strewn with a

3

15 Id.

16 Stephen Moore, The IRS Has Around 100,000 Employees. And Yet It’s Still Incredibly Incompetent (January 18, 2015)

17 Id.

18 Id.

19 Walt Disney Pictures, Aladdin (1992)

20 Id.

multitude of dangers, both for individuals and corporations alike. Indeed, as was stated by a

paragon among jurists shortly after our nation’s birth, “the power to tax involves the power to

destroy.”21 Thus, when the government’s attempts at extracting this revenue base goes too far, as

was the case with the Stamp Act of 1765, one of Edmund Burke’s more notable adages finds

ready application: “When you drive him hard, the boar will surely turn upon the hunters.”22

A Brief History of the Original Tea Party

Before Men had tasted the Sweetness of Liberty, they desired a King. 23

Thomas Paine asserts, “[i]t is the good fortune of many to live distant from the scene of

sorrow; the evil is not sufficiently brought to their doors to make them feel the precariousness

with which all American property is possessed.”24 Hence, those who are distant from the dagger,

or the serpents venom, possess sympathies -- toward those suffering from the same -- that prove

equally distant. Thus, it is usually left to those feeling the sting more directly to accurately

assess the extent of the original harm, and who are most adept at perceiving that harm’s

subsequent dangers. Many Colonists were reeling from an injurious sting, the sting of excessive

taxation. This suffering was an aftereffect of “[t]he Stamp Act enacted by the Parliament of

Great Britain in 1765.”25 This excessive taxation was not entirely unfamiliar to the British

themselves, however, as Adam Smith writes: “Such stamp duties as those in England upon cards

4

21 McCulloch v. Maryland, 4 Wheat. 316, 425, 428, 431 (1819)

22 Edmund Burke, The Portable Edmund Burke, Isaac Kramnick, ed. p. 256 (1999)

23 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 285 (2005) (quoting Livy, emphasis in the original)

24 Thomas Paine, Collected Works, p. 26 (1995)

25 Order by Judge Richard Posner, United States v. Hakeem El Bey, p.1 (U.C.D.D. February 20, 2015)

and dice, upon newspapers and pamphlets, etc, are properly taxes upon consumption; the final

payment falls upon such persons who use or consume such commodities.”26

Yet to discover that the issue of excessive taxation would, for the Colonists, provide the

genesis for the hostilities soon to come should -- for students of history in particular -- generate

little surprise. And while Englishman in their homeland carried the weight of a quite similar tax

burden, they at least had the ears of their representatives in return for their tax payments, whereas

the Colonists did not. Hence, it was the oppressive act of taxation without representation that

constituted the crux of the matter for the Colonists, rather than merely the taxes themselves.

Indeed, this lack of representation proved beyond unsettling for the settlers of this embryonic

nation. Just imagine the frustration that accompanied this experience; being forced to engage in

their political disputes across the expanse of a great ocean. Indeed, to effectually argue -- let

alone prevail in that argumentation -- with a despotic tyrant situated 4,000 miles away, waiting

upwards of six months for his reply,27 was an undertaking most exasperating to say the least.

It was Edmund Burke, an individual ranked among history’s greatest statesmen, who, in

the course of deliberating the history of England, observed that the “[t]he great contests for

freedom in this country were from the earliest times chiefly upon the question of taxes.”28 And

while Burke alludes to England in particular, his assertion finds ready application on a universal

scale. Yet taxes, as most would agree, constitute a rather necessary evil. And surely, there exists

a balance to be had; between the government’s burden to produce revenue, and the extent to

which the citizenry is called upon to shoulder that burden. Yet when the government seeks to

5

26 Adam Smith, The Wealth of Nations, p. 931 (1994)

27 History.com, The Stamp Act (2015)

28 Edmund Burke, The Portable Edmund Burke, p. 261 (1999)

amass more than in just -- when they go too far -- those trained in law are most apt to “augur

misgovernment at a distance, and snuff the approach of tyranny in every tainted breeze.”29

Surely, the British government’s implementation of the Stamp Act, at least with respect to the

Colonists, breached these bounds of political decorum; they crossed a line and thus went too far.

Yet their government’s attitude toward America even after the Act was repealed, evidenced that

the British government would not be deterred from resurrecting quite similar taxation stratagems

in the future. Burke writes, “[a]fter the repeal of the Stamp Act, ‘the colonies fell,’ says this

assembly, ‘into their ancient state of unsuspecting confidence in the mother country.’”30 Which

swiftly brings to mind Livy’s adage that“[b]efore Men had tasted the Sweetness of Liberty, they

desired a King.”31 Nonetheless, these subsequent acts of taxation on the Colonists, who were, as

Parliament suggested, restfully lulled to sleep in their mother country’s arms, startled them to an

abrupt awakeness. They were, in truth, startled to alertness by the noxious fumes of a taxation

deemed noisome and odious. And it was the ensuing rage engendered by this injurious Tea Act

of 1773 which gave birth to the Colonists Tea Party movement in the first place.32 However,

most significantly, it was this abusive taxation that caused these fiery Patriots of New England to

be literally “up in arms” against their King.

The Tea Party was formed in 1773, eight years after the official “Stamp Act” of 1765, had

been repealed.33 After the original Stamp Act was repealed, however, power changed hands in

6

29 Id. at 263

30 Id. at 292

31 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 285 (2005) (quoting Livy, emphasis in the original)

32 History.com, The Stamp Act (2015)

33 Id.

the British Parliament and a new legislature moved in.34 These new wielders of power wished

not only to reenact the Stamp Act, but to actually make it more comprehensive.35 And in reaction

to what was, perhaps, a blatant act of spite, Bostonians revolted in masse, conveying their

outrage -- albeit in a manner rather novel -- on the evening of December 16th, 1773.36 It was on

that evening that Patriots donned the attire of Native Americans and subsequently boarded a ship

of England filled to the masts with tea.37 Once aboard, these Patriots facilitated their own Act,

the act of ensuring that “ninety thousand pounds of tea were thrown overboard.”38 And while

such modes of protest, in response to a taxation suffered equally by Englishmen and Colonists

alike, surely appeared extreme to many observers at the time, the Colonist’s justification for this

asserted “rebellion” was most prominently premised on the issue representation. Moreover, the

British government, seeking to recoup it immeasurable losses from the French and Indian War,

were now acting in a manner that appeared to disregard the colonists right to their own self-

generated prosperity.39 And it was one thing for the citizenry of England to fund a war that

directly served them, or at the least, a war which they entered voluntarily and with eyes wide-

open. Yet quite another to tax individuals, namely the Colonists, who resided outside the war-

making decisions, and thus had little involvement in entering the war to begin with, and stood to

receive little, if any, benefit from the generation of those hostilities thereafter. 40

7

34 Id.

35 Id.

36 Id.

37 Id.

38 Id.

39 See generally, Thomas Paine, Collected Works (1995)

40 Id.

It was John Locke who asserted; “whenever the power that is put in any hands for the

government of the people and the preservation of their properties is applied to other ends, and

made use of to impoverish, harass or subdue them to the arbitrary and regular commands of

those that have it, there it presently becomes tyranny, whether those that use it are one or

many.”41 And it was becoming all too apparent to the Colonists that the power Locke alluded to,

particularly with regard to this wielder of power’s willingness to impoverish others, was

burgeoning. Yet, not only was it growing hideously powerful, it was rearing its ugly tyrannical

head -- straightway -- at the Colonists.

The antithesis of tyranny is, for many of history’s greatest political philosophers, a state

of virtue.42 For political theorists, however, as Montesquieu informs, a reference to the word

“virtue” alone constitutes political virtue, rather than Aristotle’s concept of a life well-lived, and

the necessary accompanying personal virtues of “temperance, courage and justice,” the very

attributes which enable an individual to achieve that higher life.43 With the engagement of his

quintessentially polymathic mind -- Aristotle was, after all, “the master of those who know”44 --

he was able to intellectually juggle, and thus effectually address, both the personal virtues as well

8

41 John Locke, The Second Treatise on Government, p. 105 (1921)

42 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent, trans. p. 43 (2010), John Locke, Second Treatise on Government, pp. 7-8 (1921), Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1, p. 13 (1993) (That public virtue, which among the ancients was denominated by patriotism, is derived from a strong sense of our own interest in the preservation and prosperity of the free government of which we are members) (see also Hugh Trevor-Roper’s introduction to Gibbon, p. Lxxxviii, where he infers that Machiavelli’s concept of “public virtu” provided the genesis from Gibbon’s, and perhaps other political philosophers of great renowns’ thoughts on the matter. For instance, when one analyzes his Spirit of The Laws, he can readily deduce that Montesquieu was a great fan of, and was thus appreciably influenced by Machiavelli’s work), Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk. 2, sec. 11 (2000), Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, pp. 1180, 1270-71, 1271 (2001)

43 Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, p. 1143 (2001)

44 Dante Alighieri, The Inferno, trans. Dorothy Sayers, p. 94 (1949))

as those virtues of a political nature; and address these with astounding perspicacity. “[T]he

happy life” writes Aristotle “is the life according to virtue lived without impediment . . . And the

same principles of virtue and vice are characteristic of cities and of constitutions.”45 “Thus the

courage, justice, and wisdom of a state have the same form and nature as the qualities which give

the individual who possesses them the name of just, wise, or temperate.”46 Yet, in moving

beyond the analogy of personal virtues as applied to the state, Aristotle asserts that “the state or

political community,” like an adept archer, “aims at good in a greater degree than any other, and

at the highest good.”47 And as for legislators, Aristotle asserts that “the salvation of the

community is the common business of them all.”48 Indeed, for Aristotle “virtue must be the care

of the state.”49 Thus, those contributing to the good of the state are deemed to possess “political

virtue.”50 But as for the role of a government’s preservation interest in society, an element of

foremost significance in Montesquieu’s conception of political virtue, Aristotle descants; “the

mere establishment of a democracy is not the only or principal business of the legislator, or of

those who wish to create such a state.”51 Rather,

a far greater difficulty is the preservation of it. The legislator should therefore endeavor to have a firm foundation according to the principles already laid down concerning the preservation and destruction of states; he should guard against the destructive elements,

9


46 Id. at 1278

47 Id. at 1127

48 Id. at 1180

49 Id. at 1188

50 Id. at 1189

51 Id. at 1270

and should make laws, whether written or unwritten, which will contain all the preservatives of states.52

Significantly, Aristotle states that the foremost attribute of an exemplary government “is not that

which will give the greatest amount of democracy or oligarchy, but that which will make them

last longest.”53 And it would be nearly three hundred years later that Cicero would, when

addressing the laws instituted by government, assert that these actions are to be established for

"the safety of citizens, the preservation of states, and the tranquility and happiness of human

life.”54 Hence, as is the case with Montesquieu, Locke, Cicero, Gibbon, Machiavelli and

numerous others, the preservation of the state stands as paramount in Aristotle’s deliberations on

government.55 Therefore, rather than the more individualized focus on a life well-lived, “political

virtue” is concerned with a more encompassing passion; the desire to see one’s society

preserved.56 Hence, the possession of political virtue entails a concern for, above all else,

ensuring that one’s society survives, and if possible thrives, for the many years -- and perhaps

even centuries -- to come.57 And while it may the case that the British satisfied, to a certain

10

52 Id. at 1270-71 (emphasis mine)

53 Id. at 1271

54 Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk 2, sec. 11 (2000) (emphasis mine)

55 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent, trans. p. 43 (2010), John Locke, The Second Treatise on Government, pp. 7-8 (1921), Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1, p. 13 (1993) (That public virtue, which among the ancients was denominated by patriotism, is derived from a strong sense of our own interest in the preservation and prosperity of the free government of which we are members) (see also Hugh Trevor-Roper’s introduction to Gibbon, p. Lxxxviii, where he infers that Machiavelli’s concept of “public virtu” provided the genesis from Gibbon’s, and perhaps other political philosophers of great renowns’ thoughts on the matter. For instance, when one analyzes his Spirit of The Laws, he can readily deduce that Montesquieu was a great fan of, and was thus appreciably influenced by Machiavelli’s work), Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk. 2, sec. 11 (2000), Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, pp. 1180, 1270-71, 1271 (2001)

56 Id.


extent, this criterion of virtue for their own nation -- as they were clearly attempting to raise

revenue for their country’s preservation and continuance -- they were doing so at the expense of

a populace that was still ranked among its own citizenry. And this largely diminishes, if not

entirely negates, that same virtue which Aristotle, Montesquieu, Cicero, Smith, Gibbon, or any

other great political philosopher of renown, had in mind.58 And when we add Locke’s poignant

assertion into the mix, that “[e]veryone as he is bound to preserve himself, and not to quit his

station willfully, so by the like reason, when his own preservation comes not in competition,

ought he as much as he can to preserve the rest of mankind, and not unless it be to do justice on

an offender, take away or impair the life or what tends the preservation of the life, the liberty, the

health, limb, or goods of another,”59 the foregoing assertion is greatly buttressed. Thus, Locke

informs that political virtue requires not merely seeking to preserve those within our own

nation’s boundaries, but includes as well “the rest of mankind.”60 More aptly, Locke promulgates

that “the fundamental law of nature [is] the preservation of mankind.”61 In echoing Locke’s

sentiments, Montesquieu asserts that “[a]ll governments have the same general end, which is that

of preservation.”62 Moreover, he states that “[w]e should love our country, not so much on our

11

58 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent, trans. p. 43 (2010), Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1, p. 13 (1993) (That public virtue, which among the ancients was denominated by patriotism, is derived from a strong sense of our own interest in the preservation and prosperity of the free government of which we are members) (see also Hugh Trevor-Roper’s introduction to Gibbon, p. Lxxxviii, where he infers that Machiavelli’s concept of “public virtu” provided the genesis from Gibbon’s, and perhaps other political philosophers of great renowns’ thoughts on the matter. For instance, when one analyzes his Spirit of The Laws, he can readily deduce that Montesquieu was a great fan of, and was thus appreciably influenced by Machiavelli’s work), Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk. 2, sec. 11 (2000), Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, pp. 1180, 1270-71, 1271 (2001)

59 John Locke, The Second Treatise on Government, pp. 7-8 (1921)

60 Id.

61 Id. at 72


own account, as out of regard to the community.”63 Yet to drive this point home with even greater

force, Montesquieu proclaims: “If I knew of something that could serve my nation but would

ruin another, I would not propose it to my prince, for I am first a man and only then a

Frenchman . . . because I am necessarily a man, and only accidentally am I French.”64 Here, it

may additionally be added -- by the pen of that prodigy of international law -- “we are to

prefer . . . a public good before a private one.”65 And, in a reverberation of the foregoing

sentiments expressed by Montesquieu, Socrates, when “asked of what country he called himself,

said, ‘Of the world;’ for he considered himself an inhabitant and a citizen of the whole world.”66

So whether the Colonists were perceived as those within or without the nation of England, they

were certainly not residing under the virtue strictures that the aforementioned political

philosophers -- in some cases vehemently -- describe.

The British, however, failed not only in their political duty to exhibit virtue, they failed to

satisfy the criterion for liberty as well. It was, in fact, during this same historical epoch where

Edmund Burke asserts:

The liberty I mean is social freedom. It is that state of things in which liberty is secured by the equality of restraint. A constitution of things in which the liberty of no one man, and no body of men, and no number of men, can find means to trespass on the liberty of any person, or any description of persons, in that society.67

Burke goes on to posit, “[t]he moment will is set above reason and justice, in any community, a

great question may arise in sober minds, in what part or portion of the community that dangerous

12

63 Id. at 44

64 Charles de Montesquieu, Pensees et Fragments Inedits (1899)

65 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 215 (2005)

66 Marcus Tullius Cicero, Tusculanarum Disputationum, vol. v, p. 108 (1892)

67 Edmund Burke, The Portable Edmund Burke, Isaac Kramnick, ed. p. 542 (1999)

dominion of will may be the least mischievously placed.”68 And it would be this very same will

gone awry that would devolve upon the Colonists, causing them to suffer the full force of this

will’s mischievous deviation.

Thus the ideal set forth by history’s greatest political sages is that Government, rather

than existing to ensure that one or more of its own entities -- or appendages -- survives, exists

rather to preserve the survival of its nation as a whole, and hence the preservation of its citizenry

as well.69 Not surprisingly, beyond mere survival -- which is not so easily obtained -- a politically

virtuous government will wish both its nation and its populace to flourish and prosper, as the two

are found to be ineluctably intertwined.70 Thus, when a government becomes corrupted in that

preeminent virtuous purpose, it becomes, like those robots gone awry in more recent doomsday

movies, a self-justifying entity. For instance, in the movie I, Robot,71 robots were programmed

to serve the greater good of mankind. However, these robots ultimately developed an auxiliary

system of their own, one that ensured their continued survival, in spite of whatever deleterious

effects eventuated for mankind.72 Hence, as is the case with the foregoing “out of control” robots

scenario, government entities such as the IRS find themselves sorely tempted to seek the

preservation of their own life, even at the cost of non-governmental organizations, or its nation’s

13

68 Id. (emphasis in the original)

69 See Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 346 (2005) (I esteem it better, even from private Men, that the State in general flourish, though they themselves do not thrive in it, that that they should flourish in their Affairs, and the Public suffer. For let a Man’s private affairs be never so prosperous, yet if his Country be lost, he must perish with it) (quoting Pericles in Thucydides) (emphasis in the original)

70 Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, p. 1220 (2001) (“the happy life” writes Aristotle “is the life according to virtue lived without impediment . . . And the same principles of virtue and vice are characteristic of cities and constitutions.”), Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 347 (2005) (quoting Plato)

71 Sony Pictures, Based on the book series by Isaac Asimov (2004)

72 Id.

citizenry as a whole. Yet, as “Plato observed, that which is the Bond of States, is the Care of the

public Good, and that which destroys them is the minding only of one’s private Advantage;

therefore it concerns both the State and private Men, to prefer the Interest of the public to that of

particular Persons.”73 For this paper’s purpose, rather than speaking of persons, we may readily

insert the word “organizations.” Thus a nation’s guardians, hence its legislators, must resolutely

guard against these private advantages. And as for these private advantages, Grotius proffers;

I esteem it better, even from private Men, that the State in general flourish, though they themselves do not thrive in it, than that they should flourish in their Affairs, and the Public suffer. For let a Man’s private affairs be never so prosperous, yet if his Country be lost, he must perish with it.74

Thus when government entities or appendages act in such an untowardly self-preserving manner,

they depart from their original purpose, and thus leave the realm of political virtue altogether.

Which calls forth Edmund Burke’s astute observation that “the purpose of government is to

restrain man,”75 and begs for an expedient application of the same. For “[i]n framing a

government which is to be administered by men over men, the great difficulty lies in this: you

must first enable the government to control the governed; and in the next place oblige it to

control itself.”76 Thus, it remains up to the governed to ensure that government can effectually

restrain itself.77

14

73 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1 p. 347 (2005) (quoting Plato, emphasis in the original)

74 Id.

75 Edmund Burke, The Portable Edmund Burke, p. 542 (1999)

76 THE FEDERALIST, NO. 51 (James Madison)

77 Id.

A Brief History of the Modern Tea Party

Montesquieu cautions, that “constant experience shows us that every man invested with

power is apt to abuse it, and to carry his authority as far as it will go.”78 The modern Tea Party,

like it namesake of old, is a political group not only engaged in, but even embroiled in protest.79

The modern Tea Party is not fond of what they presently observe in America’s government, and

wish to see that government return -- posthaste -- to its original, more virtuous, purpose and

form.80 And this original purpose is, for Tea Party groups, most aptly reflected by the state of our

Nation’s government prior to FDR’s New Deal.81 Thus, their members deem themselves “strict

constitutionalists,” not wishing the government’s involvement in anything that is not explicitly

authorized by the Constitution.82 And in order to effectuate their plan of setting government

aright, the Tea Party aggressively endorses candidates that it feels will adhere, with vigilant

circumscription, to its ideology.83 And surely, the Tea Party has proved itself worthy of our

respect -- if not utter admiration. As it happens, if one were to underestimate the strength of the

Tea Party movement in American politics this would, for politicians in particular, constitute an

irrecoverable misstep. These organizations are, to an appreciable degree, king makers in the

arena of American politics. Moreover, they enable unlikely underdogs -- through their

efficacious donor financing engine -- to prevail over even the most established, thus often

imbedded, career politician. And while they may assist in facilitating the success of numerous

15

78 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent trans. p. 137 (2010)

79 Kate Zernike, In Justice Confirmation Hearings, Echoes of the Tea Party (July 2, 2010)

80 Id.

81 Id.

82 Id.

83 Id.

Republican candidates over their Democrat rivals, those most fearful of the Tea Party’s

unrelenting gaze are undoubtedly incumbents exuding moderate Republican sentiments.

But what precisely is a “strict constitutionalist,” at least as it applies to the Tea Party’s

viewpoint? Perhaps certain comments from Senator Rand Paul will provide us with the

necessary clarity to elucidate the term. For, as it happens, the Tea Party “has found as its tribune

Rand Paul,” the junior Senator -- and now Presidential candidate -- from Kentucky, who presents

as their foremost, and assuredly most visible, herald.84 Senator Paul, along with the lion’s share

of “Tea Party supporters, believe that much of what the federal government regulates should be

left to the states, where voters hold a shorter leash.”85 Indeed, it is for this reason that;

they embrace a strict interpretation of the 10th Amendment, which says that the powers not delegated to the federal government by the Constitution “are reserved to the states respectively, or to the people.” And some believe that the 17th Amendment, commonly known as one of the “progressive” amendments, was wrong when it assigned the election of United States senators directly to the voters. The Constitution put that power with the state legislatures.86

Senator Paul “argues that Congress could balance the budget if it just got rid of all the programs

that are not authorized by the Constitution.”87 Thus,“the unifying philosophy for [Tea Party]

groups across the country is a belief that the nation can solve its problems — primarily its

economic problems, which is what its supporters care most about — if lawmakers stick to a strict

interpretation of the Constitution.”88 In truth, Senator “Paul says he would not vote for any

16

84 Id.

85 Id.

86 Id.

87 Id.

88 Id.

legislation not specifically authorized by the Constitution.”89 And in something called the “Tea

Party Manifesto created by thousands of people voting online,”90 Tea Party members require

their candidates to identify for each and “every piece of legislation . . .‘the specific provision of

the Constitution that gives Congress the power to do what the bill does.’”91 Unsurprisingly,

“[t]hey campaign for candidates who promote themselves as “constitutional conservatives.””92

The center of the Tea Party argument is that Congress has usurped powers it was never granted in Article I, Section 8 of the Constitution, which contains what is commonly referred to as the commerce clause. The section mentions roughly 20 items, including the power to collect taxes, to pay debts, to “provide for the common defense and welfare of the United States,” and to regulate commerce “with foreign nations, and among the several States, and with the Indian Tribes.”93

Based on the Tea Party’s lights, “everything went out of control with the New Deal as Congress,

trying to ease the pain of the Great Depression and prevent another, passed legislation that

progressives had been pushing for years, which included the regulation of banks and the

establishment of a minimum wage and Social Security.”94

The Constitutional Tipping Point: What the IRS Did to the Tea Party

Like any other political organization, the various Tea Party groups throughout the nation

can only flourish successfully through donations. And to attract these donations, political

organizations, like religious and other various non-profits, seek 501(c)(3) tax exempt status with

the IRS. This status also enables donors to write off donations to these organizations, and

17

90 Id.

91 Id.

92 Id.

93 Id.

94 Id.

thereby reduce their respective tax liabilities. This is, in essence, the very approval status that

enables a political organization to get its “feet off the ground,” as well as continue to run

effectually. Hence, any impediment to this tax-exempt 501(c)(3) status will not only hinder its

success but -- of far greater significance -- places that very organization’s survival in a state of

utter peril as well.

A recent lawsuit filed by attorney Jay Sekulow, Chief Counsel for the American Center

for Law and Politics and an individual who has argued twelve cases before the U.S. Supreme

Court,95 alleges six counts against the IRS for its discriminatory behavior toward more than

twenty Tea Party political organizations sprinkled throughout this nation.96

In summary, the counts allege that,

Defendants unlawfully delayed and thereby effectively denied approval of Plaintiffs’ applications for tax exempt status by means of a comprehensive, pervasive, invidious and organized scheme that purposefully established unnecessary and burdensome inquiries and scrutiny of Plaintiffs’ applications based solely upon Plaintiffs’ political viewpoints (or Defendants’ assumption of Plaintiffs’ viewpoints, based on their organizational names). Defendants’ unlawful conduct included but was not limited to excessive scrutiny of Plaintiffs’ applications by requiring donor names, listing of issues important to Plaintiffs’ organizations, including their positions on such issues, the contents of communications between the organizations and legislative bodies, the applicant’s criteria for membership, volunteer names and the political affiliations of persons associated with the organizations, all in violation of Plaintiffs’ rights under the First and Fifth Amendments to the United States Constitution and the Administrative Procedure Act.97

The complaint further alleges Plaintiffs Withdrew Tax-Exempt Applications Due to Unlawful

IRS Conduct.98 And as for remedies;

18

95 Jaysekulow.com (April 9, 2015)

96 Jay Sekulow, et al., Tea Party Complaint, Case 1:13-cv-00777 (DCDC, May 29, 2013)

97 Id. at 5-6

98 Id. at 9

Plaintiffs additionally seek injunctive relief in the form of a permanent injunction prohibiting all Defendants, and all those in active concert with them, from unlawfully discriminating against Plaintiffs, including their officers, directors, and members, for disparate treatment and particular scrutiny based on the unconstitutional criteria of political viewpoint or association, all in violation of Plaintiffs’ rights under the First and Fifth Amendments to the United States Constitution and the Administrative Procedure Act. Plaintiffs Greenwich Tea Party Patriots of South Jersey, Inc., Greater Phoenix Tea Party Patriots, Unite.99

FACTUAL ALLEGATIONS

Plaintiffs are all organizations that applied for 501(c)(3) or 501(c)(4) tax-exempt status with the IRS between 2009 and 2011.100 Each Plaintiff submitted to the IRS all requisite documentation and information in order for the IRS to determine that Plaintiff’s application for tax-exempt status. Each Plaintiff complied in a timely manner with all reasonable requests for information from the IRS.101 After filing their initial applications, all Plaintiffs received letters from the IRS requesting additional information that the IRS claimed was necessary in order to reach a determination of their applications for tax exemption. The IRS issued the foregoing letter requests to Plaintiffs based on Plaintiffs’ political viewpoints (or Defendants’ perception of such viewpoints based on Plaintiffs’ names), and not based on the applicable criteria set forth in tax-exempt laws or Treasury Regulations.”102

It was further alleged that “[v]arious employees and officials within the Department of the

Treasury inspected and/or disclosed the information produced by the above-identified Plaintiffs

in response to the IRS’s requests for additional information.”103 Subsequently,

[o]n May 14, 2013, the Treasury Inspector General for Tax Administration (TIGTA) released the report of an IRS audit it initiated based on concerns expressed by Congress and the media about the targeting of certain conservative political organizations seeking tax-exempt status. TIGTA reported that the IRS, both before and during the 2012 election cycle, had done the following:

(a) targeted tax-exempt applications for additional scrutiny and inquiry based on “inappropriate criteria”—including organizational names and policy positions;

19

99 Id. at 6

100 Id. at 11

101 Id.

102 Id. at 12

103 Id.

(b) significantly delayed the processing of these applications, keeping them open over twice the length of time for processing of other applications requiring additional tax-exempt applications; and

(c) requested additional information from these applicants that was entirely unnecessary and irrelevant to the IRS’s determination regarding the organizations’ tax-exempt status.104

At least as early as February 2010, the IRS began identifying applications for additional scrutiny (including the issuance of letter requests for additional information) from organizations seeking tax exemption whose names included the terms “Tea Party,” “Patriots,” “9/12,” or other political-sounding names, such as “We the People,” or “Take Back the Country.” All applications from organizations whose names included the terms “Tea Party,” “Patriots,” or “9/12” were discriminatorily singled out for additional scrutiny by the IRS. The IRS internally referred to such applications as “Tea Party cases.” At least as early as April 2010, Defendant Paz, then-Acting Manager, EO Technical Unit, was aware of the selective targeting of and discrimination against the “Tea Party cases.”105

The complaint further alleges that “[t]he letters issued to “Tea Party” applicants, including

Plaintiffs herein, requested such inappropriate and irrelevant information as”106 the

following:

(1) donor names; (2) a list of issues that are important to the applicant organization, as well as the organization’s position regarding those issues; (3) the type of conversations and discussions between members and participants at organization activities; (4) whether the organization’s officer(s) or director(s) have run or plan to run for public office; (5) the political affiliation of the officer(s) or director(s) of the organization; (6) information regarding the employment (other than for the organization) of the organization’s officer(s) or director(s); and (7) information regarding the activities of other organizations with which the applicant has a connection. At least one Plaintiff herein was asked to provide the names of individuals who volunteered with the organization. For many “Tea Party” applicants, including several Plaintiffs herein, the issuance of these letters was delayed until a full year or more after the organizations initially filed their applications for tax-exempt status. 107

20

104 Id. at 12-13

105 Id. at 13 (emphasis added)


107 Id. at 15-16 (emphasis added)

Prima Facie “Tea Party Specific” Targeting

Within foregoing complaint, there is clear evidence that the IRS targeted numerous

Tea Party groups specifically. For instance:

In or around March, 2012, IRS officials and employees created a list of template questions to be included in future letters requesting additional information from “Tea Party” applicants. This list was provided to members of the Guidance Unit in Washington, D.C., and still included inappropriate and unconstitutional requests for donor information. 108

Plaintiffs San Fernando Valley Patriots, Inc., and Portage County Tea Party, Inc., withdrew their applications for 501(c)(4) tax-exempt status based on the unconstitutional requests for information issued by the IRS and the IRS’s intentional delay in processing their applications. Plaintiffs Linchpins of Liberty and Patriots Educating Concerned Americans Now (PECAN), as of the date of filing of this Complaint, still await determinations on their applications for 501(c)(3) tax-exempt status, each of which has been pending in excess of 270 days.109

On May 10, 2013, the IRS publicly acknowledged that it inappropriately and unjustifiably targeted conservative political groups for tax scrutiny during the 2012 election cycle. Defendant Lerner publicly acknowledged the IRS’s discriminatory treatment of the Tea Party organizations, expressly admitting, on behalf of the IRS, that the applications of groups whose names included “Tea Party” or “Patriot” were singled out and subjected to additional IRS scrutiny. The extensive delay in processing their applications for tax-exempt status has cost Plaintiffs significant time and money that they could have been using to further their exempt purposes. Defendants’ unconstitutional treatment of Plaintiffs based on their names and political viewpoints, and Defendants’ conduct in issuing unconstitutional requests for information from Plaintiffs, has substantially and materially interfered with Plaintiffs’ abilities to engage in effective advocacy and other expressive activities. 110

What proves most troubling about these allegations is the fact that “[t]he conduct of Defendants

complained of herein has had a chilling effect on the willingness of potential donors and

grantors to provide donations and grants to Plaintiffs.”111

21

108 Id. at 16

109 Id. at 17


111 Id. (emphasis added)

CAUSES OF ACTION

COUNT I (Violations of the First Amendment – Freedom of Speech – Bivens Action)

The Supreme Court, in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), recognized a private damages action against federal officials for constitutional torts committed by such officials while acting under color of federal authority. 112

COUNT II (Violations of the First Amendment – Freedom of Association – Bivens Action)

By All Plaintiffs Against Defendants Miller, Lerner, Paz and the Unknown Named IRS Officials In Their Individual Capacities While Acting Under Color of Federal Authority

The First Amendment to the United States Constitution protects Plaintiffs’ right to freely associate with others of their choosing for the purposes of engaging in protected speech or religious activities. 113

COUNT III (Violations of the Fifth Amendment – Equal Protection under the Due Process Clause

– Bivens Action) “The Fifth Amendment to the United States Constitution protects persons against the deprivation of life, liberty, or property without due process of the law and forbids the federal government from denying the equal protection of the laws.”114 “The Fifth Amendment to the United States Constitution guarantees persons the right to be free from illegal discrimination and selective prosecution.” 115

Defendants Miller, Lerner, Paz, and the Unknown Named IRS Officials unlawfully deprived Plaintiffs of their Fifth Amendment rights in connection with and arising from their applications for tax-exempt status by imposing upon such applications an unconstitutional requirement of heightened scrutiny, issuing unconstitutional and overly intrusive requests for information as described herein, delaying the processing of Plaintiffs’ applications on the basis of Plaintiffs’ political positions, and failing to prevent such conduct by other IRS employees under their direct supervision and control while fully aware of such unconstitutional misconduct. The disparate treatment of Plaintiffs

22

112 Id. at 19

113 Id. at 20 (emphasis in the original)

114 Id. at 21

115 Id.

based on their conservative political viewpoint was a result of a discriminatory purpose on the part of Defendants. 116

COUNT IV (Violations of the Administrative Procedure Act)

The Administrative Procedure Act (APA) provides a cause of action for persons aggrieved by final actions of an agency of the United States, or officers thereof while acting in an official capacity, that have been unlawfully withheld or unreasonably delayed, as well as agency actions, findings, and conclusions that are contrary to constitutional right, power, privilege or immunity. The United States has waived its sovereign immunity pursuant to 5 U.S.C. § 702 in actions seeking relief other than money damages and stating a claim that an agency of the United States and/or officers thereof acted or failed to act in an official capacity. The Internal Revenue Service is an agency of the United States for purposes of the APA. 117

COUNT V (Violations of the Internal Revenue Code – 26 U.S.C. § 7428)

By Plaintiffs Still Awaiting Determination of 501(c)(3) Tax-Exempt Status Against Defendants United States and the Secretary of the Treasury in an Official Capacity The allegations of Paragraphs 1 through 81 above are incorporated by reference herein as if fully set out. 26 U.S.C. § 7428 creates a cause of action for organizations whose applications for a determination with respect to qualification for tax-exempt status under 26 U.S.C. § 501(c)(3) have not been acted upon within 270 days of the organization’s request for such determination. 118

COUNT VI (Violations of the Internal Revenue Code - 26 U.S.C. § 6103)

By Plaintiffs Who Produced Return Information to the IRS Against Defendants United States and the IRS. 26 U.S.C. § 6103 provides that “[r]eturns and return information shall be confidential” and may be inspected and/or disclosed only as specifically authorized under Section 6103. 26 U.S.C. § 7431 creates a cause of action for any taxpayer whose tax return information is knowingly or by reason of negligence inspected or disclosed by an officer or employee of the United States in violation of any provision of 26 U.S.C. § 6103. 119

In the course of litigating these allegations, and concomitantly observing the Justice

Department’s inability to seek justice in the process, Sekulow has since concluded that “the

23

116 Id. at 21-22 (emphasis added)

117 Id. at 23



Obama administration’s Internal Revenue Service is institutionally incapable of self-

correction.”120

More Recent IRS Revelations

As “chairman of the Ways and Means subcommittee whose jurisdiction includes

oversight of the Internal Revenue Service, Rep. Peter Roskam is familiar with Lois Lerner’s

legacy.”121 Moreover, Representative Roskam “knows how interesting her career was before she,

as head of the IRS exempt-organizations division, directed the suppression of conservative

advocacy groups by delaying and denying them the tax-exempt status that was swiftly given to

comparable liberal groups.”122 Furthermore, it was during a 2013 televised committee hearing

that Representative Roskam,

told the story of Al Salvi, who in 1996 was the Republican Senate candidate against then-Rep., now-Sen. Dick Durbin. Democrats filed charges with the Federal Election Commission against Salvi’s campaign, charges that threatened to dominate the campaign’s final weeks. Salvi telephoned the head of the FEC’s Enforcement Division, who he says told him: “Promise me you will never run for office again, and we’ll drop this case.” So said Lois Lerner. After Salvi lost, FBI agents visited his elderly mother, demanding to know, concerning her $2,000 contribution to her son’s campaign, where she got “that kind of money.” When a federal court held that the charges against Salvi were spurious, the FEC’s losing lawyer was Lois Lerner.123

As for the more recent abusive tactics engaged in by the IRS -- in its targeting of conservative

organizations -- Roskham posited that, at the end of the day, “[t]he court probably will rule that

24

120 Jay Sekulow, No Justice from the Justice Department (April 3, 2015)

121 George Will, Looking to Stop the Next IRS Scandal (March 4, 2015)

122 Id. (emphasis mine)

123 Id.

the IRS acted contrary to law. If so, the IRS certainly will not have acted contrary to its pattern

of corruption in the service of the current administration.”124

In a letter dated January 23, 2015 Representative Roskam cited further problems with the

IRS, although this time the Congressman was more concerned with their incompetencies rather

than the more constitutionally repugnant suppression of various Tea Party groups.125 A lack of

competency is if great concern, however, because -- as is the case with corruption -- it

undermines the populace’s faith in its government. Again, as Chairman of the Ways and Means

Subcommittee on Oversight, Roskam asserted that he was “writing to inquire about the Internal

Revenue Service’s decision to hire contractor CGI Federal to provide “critical functions” related

to the “ACA Program-Wide Consolidated Release Management Support.”126

As you know, in January 2014, the Department of Health and Human Services fired CGI Federal after its disastrous rollout of the HealthCare.gov website. Shortly thereafter, Massachusetts followed suit, firing CGI for its poor performance developing the state health exchange website. Governor Deval Patrick called CGI Federal a “disappointing partner.” In August 2014, Vermont also fired CGI Federal for its “unacceptable” work creating its state exchange website." I am concerned that just months after the HHS and Massachusetts firings, the IRS selected the same contractor to provide critical technology services related to the administration of the Patient Protection and Affordable Care Act.127

Here Representative Roskam was attempting “[t]o help the Subcommittee understand [the IRS’]

decision to spend $4.46 million of taxpayer funds on CGI Federal’s services.”128 And as for why

the IRS would exhibit what many would assert to be “gross incompetence” in this matter is a

question that few, I am certain, can answer. On its face, however, it leaves a reasonable person to

25

124 Id.

125 Peter Roskam, Letter to IRS Commissioner (January 23, 2015)

126 Id.

127 Id.

128 Id.

deduce either one of two things; (1) that the IRS is beyond the pale incompetent in its everyday,

common sense, functioning, or, (2) that there is some corrupt countervailing incentive in

existence, leading them to hire this one particular -- glaringly inept -- contractor.

Senator Ted Cruz’s Crusade to Abolish the IRS

Senator Ted Cruz stands foremost among Congressmen seeking the IRS’ abolition.129

Senator Cruz reasons thus:

The IRS has not honored its trust with the American people. That the Obama administration has demonstrated a willingness to use the machinery of government to target their political enemies . . . It’s a manifestation of too much power in the federal government. When the government has that much power in our individual lives, it’s an invitation to being abused.130

This sounds like a fulfillment of Montesquieu’s prediction “that every man invested with power

is apt to abuse it, and to carry his authority as far as it will go.”131 Significantly, Senator Cruz

observes that a consequence of “set[ting] aside the constraints of the law for partisan ends,” is

that “the people’s trust in the integrity of government has been undermined.”132 Now the extent

of President Obama’s involvement in the IRS scandal, if any, remains to be seen. However, as

Commander and Chief, of the armed forces in particular -- the very organization which provided

the impetus for taxation in the first instance -- surely, the buck stops with him. 133 In truth, the

quintessential characteristic of a great leader is evidenced by that individual’s willingness to take

complete and absolute responsibility for the actions of those situated beneath him, for as he is the

26

129 Fox News, Senator Ted Cruz Leading the Charge on Abolishing the IRS: GOP Lawmaker makes a case for Flat Tax (June 3, 2013)

130 Id.


132 Id.

133 President Harry Truman’s desk sign read “The Buck Stops Here”

head, he must remain cognizant of the fact that no one is better situated than he to change the

manner and course of his employees’ or servants’ actions. And it is, most understandably, when

leaders fail to embrace this responsibility required of them that the citizenry’s faith in their

government erodes. Hence, this paramount theme of a lost faith in our government continues.

There is, however, further evidence in existence, additional facts which leave this nation’s

citizenry questioning whether our present government remains worthy of our trust. Indeed, a

recent article by noted conservative media mogul Dr. James Dobson strikingly echoes the

foregoing concerns voiced by Senator Cruz. Shockingly, Dobson asserts that U.S. citizens have

“testified before Congress that their conservative organization's confidential donor list was

leaked to its ‘principal political opponent,’ which could be a felony.”134 Thus, in a reverberation

of Senator Cruz’s deductions, Dobson states:

The IRS has proven itself unworthy of our trust, and it must be kept in check. Acting IRS Director Steven Miller, speaking under oath, told a congressional committee that he didn’t know his low-level operatives were targeting more than 300 organizations -- all conservative, many faith-based -- and denied or delayed their applications for non-profit status. Our organization, Family Talk Action, was among them.135

In elaborating further on his own conservative non-profit organization’s roadblocks in achieving

501(c)(3) tax status, Dobson notes that “[t]he IRS took 19 months to grant our approval.”136

Nonetheless, in spite of the patently dilatory approval process aforementioned, their approval

postponement would have -- incontrovertibly -- gone on for a much longer period, but for this

organization’s willingness, and thus subsequent threat, to litigate. And bold assertions such as

these are only bolstered by the following:

27

134 James Dobson, IRS’ Power To Tax is Also the Power to Destroy (June 11, 2013) (emphasis added)

135 Id.

136 Id.

The agent said she doubted that Family Talk Action’s application would be approved because it sounded like a “partisan, right-wing group.” She elaborated, “You’re political because you criticized President Obama when he was a candidate.” Our attorney told her that was entirely untrue and said we would just have to litigate. Nine days later, our application was magically approved. How many other organizations would have closed their doors because they lacked the financial resources with which to fight for their free speech?137

Surely, Dobson’s assertion that “[t]he IRS has proven itself unworthy of our trust, and it

must be kept in check“138 is a significant one. Yet, in his rhetoric, he stops short of the truest

mark; Dobson clearly does not go far enough. Reminded of Jay Sekulow’s prescient deduction

that “the Obama administration’s Internal Revenue Service is institutionally incapable of self-

correction,”139 one sees that this disease of corruption, adroitly elucidated in Sekulow’s

voluminous allegations, evidences that this disease permeates the IRS to the extent that any

necessary remedy lies well beyond a mere checkup. This is, in essence, a governmental tumor

that beckons to be extricated. Thus, to say that we should keep the IRS “in check” would be

analogous to the founders saying that we should have, in contemplation of their noisome and

oppressive circumstances, taken the same soft, appeasing, and acquiescent bearing with Great

Britain, and thus forgone the Revolution altogether. Yet, like the Founders of old, we have come

to a head with this leviathanic power. Hence, this power’s head must be cut off. Elsewise, rather

that heeding our stern threats or generous counsel, most assuredly proffered in vain, this segment

of our government will brazenly burgeon; into an organization even more powerful, noisome,

odious, and corrupt. Thus, to achieve anything less than IRS abolition would be to exemplify, as

28


138 Id.

139 Jay Sekulow, No Justice from the Justice Department (April 3, 2015)

Thomas Paine so aptly suggested, “the heart of a sycophant.”140 Surely, our present

circumstances require a Churchill rather than a Chamberlain.

Still, the concept of a paramount need for establishing trust in our government requires

further elaboration. Yet before this can be accomplished, the reader must be reminded of our

earlier treatment of political virtue as described by Montesquieu. For it so happens that

Machiavelli’s conception of virtue, which is, as summarized by Gibbon, “[t]hat public virtue

which among the ancients was denominated by patriotism, is derived from a strong sense of our

own interest in the preservation and prosperity of the free government of which we are

members,”141 is quite similar. Hence, this definition proffered by Gibbon, echoing the

sentiments of Machiavelli,142 comports with Montesquieu’s sentiments on virtue described

earlier. Perhaps he even derived it from Machiavelli himself.

That the need for developing and sustaining the people’s trust in its government

constitutes one of government’s foremost objectives cannot be denied. Yet let us take this

assertion and apply it to the realm of currency, an issue Adam Smith deliberated about

extensively. 143 First, it can be readily, and quite plausibly asserted that a dollar is worth a dollar

only because we believe it thus.144 That this holds true is evidenced by the fact that our

government decided to remove the paper dollar from its gold standard back in 1934.145 Thus, a

29

140 Collected Writings, p. 27 (1995)

141 Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1, p. 13 (1993)

142 Id. at Lxxxviii (where, in the introduction to Gibbon’s work, authored by Hugh Trevor-Roper, Machiavelli’s thoughts are cited as a basis for the aforementioned quote by Gibbon)

143 See generally, Adam Smith, The Wealth of Nations (1994)

144 Id.

145 George Selgin, The Rise and Fall of the Gold Standard in the United States, Policy Analysis, vol. 729, p. 16 (June 20, 2013)

dollar has ceased to be worth, in all actuality, a dollar. Hence, you may no longer exchange your

paper dollar at the bank for its equivalent in gold.146 And it was, in fact, shortly after the gold

standard was divorced from our nation’s paper currency that the government was then permitted

to print far more dollars than the currency value of the gold stored at Fort Knox -- where a great

majority of our nation’s gold supply is stored -- could back up.147 Thus the disparity between our

paper dollar and the amount of gold previously required to support its value continued to distend.

Yet it was not until the early 1970’s that the disconnect between gold and the U.S. dollar would

prove utterly complete.148

The repercussions from departing from the gold standard are as follows: If we, or the

world at large, were to believe that the American dollar was worth a mere thirty-three cents, then

that is the value it would be accorded. Nonetheless, there remains more to the story beyond the

fact that it is this faith in our currency that buttresses its value. For one soon discovers that this

numismatic confidence is ineluctably intertwined with the faith of this nation’s citizenry in its

government. It is unsurprising then to discover that in times when the populace’s faith in our

government erodes, we find innumerable individuals fleeing to gold for solace; through

investments in rare coinage, or bullion in the form of coin. Contemporaneous with such investor

proclivities, this is also the time when the value of the dollar declines -- appreciably -- on

international currency exchanges. Yet, as it happens, this depreciation in the value of the nation’s

currency -- if generated by actions of our government that cause a “crisis of confidence” among

its citizenry -- may effectually be argued to constitute a “taking” by our government. And any

30

146 Id.

147 Id.

148 Id. at 17

taking by our government, which is found to be unaccompanied by just compensation, is deemed

repugnant to our Constitution.149 Yet this “crisis of confidence” argument can, and must, be

taken beyond mere prudential concerns for property, for there is a considerable moral argument

to be made here as well.

When an individual deliberates Aristotle’s views on the nature and the purpose of

government,150 he sees that the argument put forth by the “Philosopher,” as Thomas Aquinas

liked to put it,151 stands far afield Locke’s prudential one.152 Indeed, Aristotle’s concern with any

failure in government is based largely on moral considerations, rather than those that are largely

economic. Yet how does this concern for morality tie-in with a loss of faith in our government

and its potential deleterious effects on our nation’s currency? Well, if one considers the patent

failure of morality inherent to an utter failure of government, it is not then challenging to

extrapolate a moral argument even from the depreciation of our nation’s coinage, particularly

when this depreciation places our government’s very existence at risk. For surely, it is immoral

for a government to allow itself to fail. And if a lack of confidence in our government causes its

currency to depreciate, and this depreciation leads to a failure in that government’s ability to

exist -- let alone flourish -- then this surely constitutes a moral failure as well. Thus, we see how

these two issues, Aristotle’s appreciable interest in morality and a Locke’s prudential concern for

property,153 are readily discovered -- under a “crisis of confidence in our government” analysis --

to be ineluctably intertwined.

31

149 U.S. Const. amend. V, sec. 4

150 Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett , pp. 1180, 1270-71, 1271, 1296 (2001)

151 See generally, Thomas Aquinas, Treatise on Law, trans. Alfred J. Freddoso (2009)

152 See generally, John Locke, The Second Treatise on Government (1921)

153 Id.

Thus we see how it is of paramount importance to secure the citizenry’s faith in its

government. Not merely for the sake of uplifting moral, or to cement -- and keep secure -- the

fidelity of the populace to its nation. Rather, such faith is a requirement for our nation’s very

continuance, let alone flourishing, and thus demands that it be situated amongst the most sacred

of political echelons; and thus placed with the political virtue heretofore described.154 For the

continuous erosion of the citizenry’s faith in its government can readily lead to that nation’s

downfall. And this outcome is most evidenced, and thus taught, by a study of Rome’s decline,155

something Winston Churchill discovered during an inchoate period in his political life. 156

Moreover, the significance of a citizen’s faith -- and thus confidence -- in its government can be

further culled from an opinion authored by one who is arguably the most celebrated of all

American jurists. Indeed, Chief Justice Marshall designated to preeminence the “magic of the

word CONFIDENCE”157 in relation to the citizenry’s faith in its government. The Chief Justice,

with considerable perspicuity asserts that “[t]axation . . . does not necessarily and unavoidably

destroy.”158 Yet “[t]o carry it to the excess of destruction would be an abuse, to presume which

would banish that confidence which is essential to all Government.”159

32

154 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent trans., p. 43 (2010)

155 See generally Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1-3 (1993)

156 See generally Richard Toye, Churchill’s Empire:The World that Made him and the World He Made (2010) (some have even suggested, with hyperbole no doubt, that the only book Churchill ever read was Gibbon’s Decline and Fall of Rome).

157 McCulloch v. Maryland, 4 Wheat. 316, 431 (1819)

158 Id.

159 Id.

Further Evidence of the IRS’ Pronounced Incompetencies

For the IRS, rehiring troubled employees is nearly common practice:

Of the more than 7,000 former employees the IRS hired between January 2010 and September 2013, 824 of them were found to have prior performance and conduct issues, a new oversight report by the Treasury Inspector General for Tax Administration found. TIGTA reviewed a random sample of more than 300 employees who had conduct or performance issues in the past and found that 20% had developed new issues during their second go-round. Problem behaviors have included employees who willfully failed to file their taxes, gained unauthorized access to taxpayer information, abused the agency's leave policy, misused IRS property, falsified official forms, did a bad job or had behavioral or legal problems off-duty, such as alcoholism or bankruptcy.160

Significantly, "[b]ased on the types of prior performance and conduct issues we identified,

rehiring certain employees presents increased risk to the IRS and taxpayers,"161 deduced J.

Russell George, speaking from his vantage point as Treasury Inspector General for Tax

Administration. One of those risks includes “the increased likelihood that these unreliable IRS

employees will disseminate confidential taxpayer information where they should not,”162 an

action that is not only prohibited by all that is good and is just but, as Dobson asserts, perhaps

even “could be a felony.”163 As further evidence of the IRS’ willingness to “look the other way”

when confronted with employee incompetencies, the following scenario provides an effectual

example: “A file was explicitly stamped "Do Not Rehire," as the employee deserted her post for

33

160 Jeanne Sahadi, IRS Problem Employees (Feb. 05, 2015)

161 Id.


163 Id.

312 hours.164 Nonetheless, in the face of the IRS’ considerable laxity regarding employee

competencies “the person was rehired anyway.”165

The Tea Party’s Ongoing Troubles

The evidence presented heretofore leads not just any reasonable observer to deduce, but

perhaps even the most devout Democrat to conclude, that the IRS intentionally precluded several

Tea Party groups from qualifying for 501(c)(3) tax exempt status with the IRS. These political

groups were assaulted by the government’s weapons of strategic dilatory behavior, invasive

questioning, and various other infuriating road blocks. Unsurprisingly, as Jay Sekulow’s six-

count complaint for the twenty-five Tea Party and similarly structured conservative groups

makes patent, these delays constituted a formidable deterrent.166 It must be of little surprise then

to learn that many conservative groups, utterly exasperated by these unending delay’s and

cumbersome informational requests, simply “threw in the towel,”ultimately giving up on what

had become a most “maddening” process.167 Yet this despair of hope in ever achieving tax-

exempt status is precisely the reaction that any neutral observer would expect. But were these

actions taken by a Democrat dominated -- at least among the executives -- IRS merely a

collection of coincidences? Did the Democrats in charge inadvertently generate situations that

just so happened to adversely effect -- what many would suggest is -- their most formidable

political opponent. Or, conversely, was this a political stratagem employed with a concerted

effort, and the fullest apperception of its mischievous aftereffects? I would suggest, in concert

34

164 Id.

165 Id.

166 Jay Sekulow, et al., Tea Party Complaint, Case 1:13-cv-00777, p. 9 (DCDC, May, 29, 2013)

167 Id.

with the sentiments expressed by attorney Sekulow’s complaint, that this latter scenario presents

as the most probable one.168 Like the insurance company in John Grisham’s Rainmaker,169 the

IRS was hoping these Tea Party groups would eventually just give up and walk away. And while

they perhaps, unlike many insurance companies today, forwent a statistical analysis in their

calculus, even those possessing a paucity of common of sense could readily predict the response,

and thus the outcome for the numerous Tea Party groups aforementioned. And as James Dobson

so aptly states, “[h]ow many other organizations would have closed their doors because they

lacked the financial resources with which to fight for their free speech?”170

The modern Tea Party is deemed by most to be a political organization in a state of

rebellion.171 Thus, unsurprisingly, they are often perceived as a group residing on the very fringes

of American political discourse.172 Like them or not, however, they incontrovertibly possess the

right to be heard. Indeed, they have the right not only to exist and be heard, but even to thrive in

the American political community. For politics is like free speech, if you prohibit one group

from existing because of your disagreement with their ideologies, when there is a changing of the

partisan guards, the new political group in power will likely attempt to prohibit whatever group

-- particularly yours -- it deems problematic to its own success.

Yet I suspect this abuse, which is adroitly evinced by the foregoing Tea Party complaint,

is a symptom of problems within the IRS that are far more troublesome and expansive. Thus,

when an individual analyzes the extent of organizational disfunction and corruption that the IRS

35

168 Id. (see generally)

169 (1995)

170 James Dobson, IRS’ Power to Tax is Also the Power to Destroy (June 11, 2013)

171 Kate Zernike, In Justice Confirmation Hearings, Echoes of the Tea Party (July 2, 2010)

172 Id.

abuse scandal evidences, that individual is quick to deduce that the power of the IRS has grown

far too large. As a consequence, this organization has grown beyond their capacity to self-

regulate. Which brings us back to Madison’s concern for a government’s ability to govern

itself.173 And, as none of us are Angels, this concern should be well-heeded.174 For these recent

experiences with the IRS may not constitute the first incident of abuse we have uncovered from

this bastion of bureaucracy. No, perhaps not the first, yet -- by far -- they are the worst.

The IRS has, over the course of its history, established an infamous reputation for its

ability to ruin the lives of whomever they choose to target. And all too often, these acts of

destruction are accompanied by the most brazen gestures of arrogance. For instance, an

honorable and highly respected clergy member I know, after surfacing unscathed from a recent

grueling audit, was cautioned not to worry because, as the IRS agent stated, “we’ll get you next

time!” Indeed, many victims of “the audit” find these experiences commonplace. Yet the

sharing of a further story, while anecdotal, may nevertheless prove sufficient commentary for

effectually bringing this point home.

I attended a social gathering where I planned to meet up with a professor, who happened

to be born in Ireland. This professor had tenure at one of the more prestigious universities in the

Midwest. He was, at the time, a staunch defender of the Serbian people, an ethnic group that was

being demonized by our government. Rather than supporting the Serbian nation, our country

instead decided to direct its weighty economic and military support on the sides of the Catholic

Croatians and Albanians Muslims -- during the impending trifurcation of Yugoslavia. As it

happens, the lion’s share of Serbs are members of the Eastern Orthodox branch of Christianity,

36

173 THE FEDERALIST, NO. 51 (James Madison)

174 Id.

which finds its roots dating back to the second century. In addition to defending the Serbian

people -- both in America and abroad -- the aforementioned professor had been actively engaged

in defending the Irish Republican Army (IRA) as well, an organization our government did not

wish to survive, let alone thrive. Thus, using the IRS as its weapon of choice, the government

proceeded to destroy this professor; an individual possessing tremendous sensitivities for the

oppressed, and who held concomitant adamant aversions toward those who made them -- or at

least kept them -- so. Hence, our Government used the IRS, through erroneous, oppressive and

continual tax audits, to effectuate this professor’s demise. As they would ultimately bankrupt

him, it would appear that the government succeeded in its endeavors. Yet, as I stood in the midst

of this social gathering, within minutes of learning about this professor’s odious IRS plight

(directly from the professor himself), I subsequently struck up a conversation with another

individual who stood at my side, a man who -- unlike the professor -- was actually Serbian. My

first question to him was, “what do you do for a living?” His retort, “I am an attorney for the

IRS.” How fortuitous, I thought. Surely, the hand of providence is at work. Thus, my response:

“You know that professor X is in trouble, and that the IRS is trying to destroy him financially.

Yet you are an attorney for the IRS; why don’t you help this individual who is so devoted to

helping your Serbian community and people? His reply was, at first, utterly shocking: “If I try to

help him they will subsequently set their auditing sights on me. Thus, in the effort to save him I

will ultimately destroy myself.” This experience, I will proffer, speaks not only words, but

literally volumes about the IRS’ power to destroy. To destroy whomever it wishes, and for

whatever reason it deems fit to choose. Surely, if they will not refrain from undoing Ivy League

professors, or even IRS attorney insiders themselves, then clearly no one is safe from their

37

destructive, far reaching talons. Which means that Chief Justice John Marshall’s adage of 1819,

that “the power to tax involves the power to destroy,”175 is as apropos today as when first

penned.176

It was nearly 200 years ago that Chief Justice Marshall wrote those prescient words

about the danger of a government’s power to tax.177 The Chief Justice was, at the time, alluding

to Maryland’s attempt to tax a Federal bank.178 By taxing this bank, Maryland was -- de facto --

destroying it. For, under Maryland’s taxation scheme, the bank would be precluded from

sustaining its required profitability and thus could ill afford to continue. Yet this scenario, under

the destructive power of taxation so aptly elucidated by Chief Justice Marshall,179 is played out

in a myriad of circumstances today. Indeed, when the government decides to tax some

individual or corporation it can -- incontrovertibly -- destroy that entity. And it can do so in one

of two ways: First, at the outset, it can raise such a high tax that the individual, organization, or

corporation stands precluded from its ability to supply that entities’ basic necessities for survival.

Secondly, this taxing organization can audit those persons or entities to such an odious degree

that they soon find themselves compelled to use up the lion’s share of their resources of both

time and money in defense of these audits. It is often the case that the greater portion of these

expenditures are paid out to attorneys who advocate in defense of their cause.180 Hence, one

readily observes that the IRS is empowered with formidable weapons to destroy. Adam Smith

38

175 Id.


177 Id.

178 Id.

179 Id.


was, in fact, cognizant of these weapons while observing; “by subjecting the people to the

frequent visits and the odious examination of the tax-gatherers, it may expose them to much

unnecessary trouble, vexation, and oppression.”181 However, when a citizen, who is usually

possessed of one lawyer -- at best -- is pitted against an adversary who has at their disposal

hundreds of the same, how can he ever wish to prevail? The best he can hope to accomplish,

unknowingly of course, is to expend more of his precious economic resources toward the most

pitiful and hopeless of plights. Although David prevailed against Goliath once in history, surely

no reasonable person can rely on the repetition of so miraculous an occurrence.

Yet there exists, nonetheless, a significant distinction between these two modes of

destruction. In the firs instance, the IRS can levy taxes only as Congress -- and the Constitution

-- allow. Hence they are, under these circumstances, merely carrying out the directives of

Congress and the Executive. It is amongst this second category, however, that the IRS is

infamous; both in its blanket discretion as well as in its heedless ability to destroy.182 Indeed, it is

here that the IRS possesses near-absolute power of discretion in its choice of actions.183 Like the

Outback Steakhouse ads of old; “there are no rules, just right!” Thus, the IRS can go after

whomever it chooses whenever it wishes. And for these decisions, it answers to no one.184

The Tea Party scandal is a situation that is atypical in structure, but typical in how it

exemplifies the IRS’ willingness, and ability, to target -- and thus abuse -- specific people or

organizations for whatever reasons it deems fit. Which, in the case of the Tea Party, appears to

39

181 Id.

182 See generally George Will, Looking to Stop the Next IRS Scandal (March 4, 2015)

183 Id.

184 Id.

be little more than,“I believe these fanatical conservative groups pose a threat to my political

party’s success and thus wish to see them fail.” Consequently, certain mischievous individuals

residing within the upper echelons of IRS hierarchy -- suffering apparently from a

disproportionate measure of partisan fanaticism -- have proceeded to use every weapon

discovered in their arsenal to preclude their political opponents’ success. Yet, in the course of

their actions, these hell-bent partisans have likely further surmised; “I will probably never get

caught, but even if I do, a Democrat is on the throne. Thus, my actions will be bathed in

impunity.”

Now abuse such as this is characteristic of this behemoth organization, yet the manner in

which this abuse is played out in the Tea Party’s case proves rather novel. In the case of the Tea

Party, the IRS was, in essence, waging a tax by precluding tax exemption status. Hence, this

action falls under the first of the foregoing abuse categories discussed; that of excessive taxation,

something I shall now elaborate on further.

If an organization is deserving of 501(c)(3) tax exemption status; if, for instance, it is the

case that every similarly situated organization in the United States is accorded this tax favored

status except your own, then this unfavorable treatment -- beyond merely being unjust --

constitutes a tax. But unlike just any tax, this is a tax which requires a title of “excessive.” It is

excessive because it goes beyond what similarly situated organizations are required to pay. True,

those organizations have a legal right to their tax exempt status. But so do you! Thus your

competitors, which in the case of Tea Party organizations, might be liberal Democrat

organizations such Move On.Org -- an organization heavily funded by George Soros, a financial

trader of genius renown -- enjoy a formidable advantage over you. For instance, because they

40

are not taxed, they will amass more money. Further, the very denial of tax exempt status

precludes donors from realizing the benefit of tax deductions for their donations, the very feature

that greases the vast majority of donations in the first instance. Surely then, this tax exempt

denial constitutes a double-edged sword. But most reprehensible of all, this excessive taxation

violates the takings clause of the Fifth Amendment, and thus offends our Constitution.185

Thus when the government withhold’s a benefit that an organization has a legal right to,

so much so that every other organization placed not only in similar circumstances, but in many

cases perfectly identical ones, receives the benefit sought for, then the withholding of that right

must necessarily be deemed equivalent to an extraordinary and burdensome imposition. As

stated already, in the instant case, this imposition equates to an excessive tax. And to levy an

excessive tax on any organization, short of a reasonable and permissible legal justification, is

equivalent to oppressing that very same organization. And for the government to oppress an

organization without any reasonable or legal justification constitutes an overreach of our

government. And overreaches such as this are noisome, odious, and otherwise deeply offensive

to liberty. Moreover, they erode the public’s trust in our government, which leads to the

depreciation of our currency, and is therefore anemic to our Nation’s welfare. Further, allowing

for the continuance, let alone exacerbation, of this erosion of trust is morally offensive to all

concepts of virtue, both political and otherwise, virtues that history’s most revered and learned

41

185 U.S. Const. amend. V, sec. 4

political theorists have, from the time of Aristotle, devised.186 Further, this most paramount of

virtue’s offended was embraced by a jurist holding a place of incommensurable stature in our

nation’s history. Indeed, Chief Justice Marshall aptly states: “Taxation, it is said, does not

necessarily and unavoidably destroy.”187 However, “[t]o carry it to the excess of destruction

would be an abuse, to presume which would banish that confidence which is essential to all

Government.”188 Hence, abuse by the means of excessive taxation erodes that necessary and

essential confidence in our government, and thus stands repugnant, not only to our Constitution,

but to history’s greatest political philosophers as well. Indeed, from the time of Aristotle, these

philosophers held that the achievement of political virtue stands as government’s principal and

maximal aim.189 That it is principal, means that the preservation of society is government’s

essential goal. That it is maximal, references the fact that government’s highest goal is not

merely to see its citizens survive, but rather to flourish and thrive.

42

186 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent, trans. p. 43 (2010), John Locke, Second Treatise on Government, pp. 7-8 (1921), Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1, p. 13 (1993), (That public virtue, which among the ancients was denominated by patriotism, is derived from a strong sense of our own interest in the preservation and prosperity of the free government of which we are members) (see aslo Hugh Trevor-Roper’s introduction to Gibbon, p. Lxxxviii, where he finds the basis for Gibbon’s thoughts in Machiavelli’s concept of “public virtu.” And many other political philosophers of great renown were likely influenced by him as well. For instance, when reading his Spirit of The Laws, one can readily deduce that Montesquieu was a great fan of Machiavelli, and thus relied greatly upon his deliberations on the subject), Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk. 2, sec. 11 (2000), Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, pp. 1180, 1270-71, 1271 (2001)


188 Id.

189 Charles de Montesquieu, The Spirit of the Laws, Thomas Nugent, trans. p. 43 (2010), John Locke, The Second Treatise on Government, pp. 7-8 (1921), Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1, p. 13 (1993), (That public virtue, which among the ancients was denominated by patriotism, is derived from a strong sense of our own interest in the preservation and prosperity of the free government of which we are members) (see aslo Hugh Trevor-Roper’s introduction to Gibbon, p. Lxxxviii, where he finds the basis for Gibbon’s thoughts in Machiavelli’s concept of “public virtu.” And many other political philosophers of great renown were likely influenced by him as well. For instance, when reading his Spirit of The Laws, one can readily deduce that Montesquieu was a great fan of Machiavelli, and thus relied greatly upon his deliberations on the subject), Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk. 2, sec. 11 (2000), Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, pp. 1180, 1270-71, 1271 (2001)

Yet the Tea Party abuse aforementioned also fell into something akin to the second

foregoing category as well; namely, the abuse stemming from odious auditing. Indeed, the inner

workings of countless Tea Party organizations were invasively pried into.190 And the IRS

developed no less than sixteen questions crafted specifically for Tea Party groups.191 Some of the

questions were catered to each Tea Party group in particular asking, for instance, a Richmond,

Virginia Tea Party group the extent of its relationship with a leader of a Tea Party Group in

Cincinnati, Ohio.192 And while the IRS appeared to reserve its inquiries into “the content of the

members of your organization’s prayers” for conservative pro-life groups alone;193 conservative

organizations seeking this very same 501(3)(c) tax exempt status, the brazen and invasive

inquisitiveness directed at Tea Party groups were nevertheless equally offensive. Moreover, it is

likely that some of these questions travelled beyond the bounds of offensiveness, crossing the

line of decency altogether, and thus entering the realm constitutional repugnancy.194 And surely,

this invasiveness was and is strikingly similar to the noisome and innumerable inquiries inherent

to tax audits. And many of these Tea Party organizations, no doubt, had to devote not only time,

sweat, and labor to these matters, but were also forced to utilize their -- often scant -- personal

economic resources as well. Indeed, they were frequently compelled to hire lawyers to defend

their cause.195 Perhaps, if he could have foreseen the mischievousness the IRS would ultimately

43

190 Chris Good, Weirdest IRS Questions for the Tea Party: Views, Donors, and Etymology (May 14, 2013)

191 Id.

192 Id.

193 Id.

194 Rep. Aaron Schock, House Ways and Means Committee Hearing on the Targeting of Tea Party and Other Conservative Groups (May 17, 2013)

195 See generally Jay Sekulow, et al., Tea Party Complaint, Case 1:13-cv-00777 (DCDC, May 29, 2013)

employ, Chief Justice Marshall would have penned his words differently; perhaps he would have

additionally asserted that “the power to audit, is the power to destroy.”196 For surely, in the

preponderance of cases this is the outcome suffered. Hence, the mere decision by an official at

the IRS to audit an individual or organization can mean the economic death of the same. What a

formidable power they wield; the power to audit, thus the power to destroy. Yet, as recent IRS

events surely evidence, this has proved to be more power than they can effectually maintain.

What then shall we do with this leviathan gone awry? What just course of action does our

conscience dictate? Shall we seek to preserve the political life of a branch of our government

that appears to possess a life of its own; a life earned merely as a repercussion of its

bureaucratically behemoth size?

The IRS has, I believe, as evidenced by its recent actions, reached a point of no return. It

should, therefore, be disbanded. This organization has outlived its political lifespan; the general

purpose for its being created in the first instance. And presently, its impetus -- life force, if you

will -- is only to self-survive. And in its corresponding boredom, a sure symptom of its lack of a

general purpose for existing, the IRS devolves -- like a bored and mischief-bent elementary

school child -- down various paths of mischievousness, some quite harmful, while unknown to

most. Yet, happily, no rocket scientist is required to construe its manner of replacement. A

combined flat and spending tax is all that is required; the implementation of which is a no-

brainer of sort.

Yet surely, it did not have to come to this. The IRS could have chosen to dwell in a realm

of political neutrality, yet it did not. And the actions which took them beyond this political

44

196 McCulloch v. Maryland, 4 Wheat. 316, 431 (1819) (That the power to tax involves the power to destroy)

middle ground possessed none of the characteristics of inadvertency that we would expect to

observe where mere human error was at work. Rather, the IRS’ actions evidence intentionality at

its fullest. Like King George drunk with power, their ability to self-restrain was utterly lost. Or,

at the least, the IRS decidedly abandoned all resistance when the organization’s own thirst for

power became formidably strong.

In the twenty-nine page IRS Tea Party abuse complaint aforementioned, attorney

Sekulow notes that most of the letters received by these organizations from the IRS were

stamped with the imprimatur, if not the signature, of Lois G. Lerner.197 Until her somewhat

pressured retirement, Lerner was the head of the tax exempt division at the IRS.198 She, and

perhaps some of those she supervised at the time, admittedly -- and brazenly -- targeted

innumerable Tea Party organizations throughout this nation, making the lives of countless

individuals, at times, unbearable.199 Unsurprisingly, such abuse led numerous organizations to

give up on what was their significant legal and political right; the rights to be granted tax-exempt

status and contribute to this nation’s political discourse.200 And as this despair fulfilled the very

designs of the IRS’ stratagems, the IRS was therefore unsurprised by these outcomes.

While nascent in structure, these Tea Party groups possessed the political vision and will

necessary to grow into something prodigious and formidable. It would appear that the Democrat

leaning IRS -- as evidenced by the pervasive environment of permissiveness toward targeting

conservative groups -- was of the same opinion. For why else would this behemoth organization

45

197 Jay Sekulow, et al., Tea Party Complaint, Case 1:13-cv-00777, passim (DCDC, May 29, 2013)

198 Id.

199 Id., see George Will, Looking to Stop the Next IRS Scandal (March 4, 2015)

200 Jay Sekulow, et al., Tea Party Complaint, Case 1:13-cv-00777, pp 9-10 (DCDC, May 29, 2013)

place these groups under its daunting radar? Surely, an administration with Democrats at the

helm will run the risk that zealous partisans within that administration will seek to use the

nation’s government to further, by unethical and perhaps illegal means, their party’s objectives.

And Republicans are by no means immune from such temptations -- think Nixon! However,

moving beyond these partisan illegalities, I proffer that the IRS has patently shown itself,

through its recent adroitness at using itself not only as a political tool, but a weapon as well,

unworthy of its place in our society. For not only has it proved itself incapable of business as

usual; the IRS has shown itself incapable of business altogether. For Democrats and Republicans

alike, the IRS has -- in its addictive expanse for power -- ultimately lost its ability to command

the respect of the American citizenry.

The Government’s Need to Tax

Yet what shall we replace the IRS with? Clearly, the government needs a tax to support

itself. Amidst the inchoate stages of this great nation, Chief Justice Marshall observed; “[i]t is

admitted that the power of taxing the people and their property is essential to the very existence

of Government, and may be legitimately exercised on the objects to which it is applicable, to the

utmost extent to which the Government may choose to carry it.”201 And as for the obligation of

citizens to fund its government, Adam Smith took the position that,

[t]he expense of government to the individuals of a great nation, is like the expense of management to the joint tenants of a great estate, who are obliged to contribute in proportion to their respective interests in the estate. In observance or neglect of this maxim consists, what is called the equality or inequality of taxation.202

46

201 McCulloch v, Maryland, 4 Wheat. 316, 428 (1819)

202 Adam Smith, The Wealth of Nations p. 888 (1994)

Now that the need for taxation is conceded, all that remains is the method by which these taxes

are garnered. However, the solution for the most effectual -- as well as just -- mode of taxation is

not, perhaps, as complex as most would anticipate. The solution is, in part, a simple flat tax.203

In concert with these sentiments, the “off-the-charts brilliant”204 Senator Ted Cruz

“think[s] we ought to abolish the IRS and instead move to a simple flat tax,”205 “where the

average American can fill out our taxes on a postcard.”206 He states, “[p]ut down how much you

earned. Put down a deduction for charitable contributions, for home mortgage [interest] and how

much you owe.”207 Thus under Senator Cruz’s proposal, the majority of citizens would use “just

a simple one page postcard.”208 And by doing so, you would “take the agents, the bureaucracy

out of Washington and limit the power of government.”209 In spite of its elementary formulation,

I tend to agree with Senator Cruz’s simplistic deduction. More complexity requires more hands.

And more hands require greater financial resources with which to manage those hands.

Nonetheless, there are detractors who question the feasibility of eliminating this organization

entirely as we know it. Hence, these individuals argue; “what you really mean is shrinking the

47

203 I first presented this idea to my wife back in 2001.

204 The Blaze, Prominent Harvard Professor Dershowitz’s Comments About Ted Cruz Could Help His 2016 Chances (April 7, 2014)

205 Which leads me to deduce that we should never refrain from expressing a good idea, “else, tomorrow a stranger will say with masterly good sense precisely what we have thought and felt all the time, and we shall be forced to take with shame our own opinion from another.” Ralph Waldo Emerson, Self-reliance and Other Essays, p. 20 (1993).

206 Fox News, Senator Cruz Leading the Charge on Abolishing the IRS: GOP Lawmaker Makes a Case for Flat Tax (June 3, 2013)

207 Id.

208 Id.

209 Id.

size of the IRS, not its actual elimination.”210 Thus they assert that Senator Cruz is merely

seeking a change in the tax code, and thus is utilizing mere hyperbole when speaking of

abolishing the IRS altogether.211

And it is quite true to say that patent feasibility issues arise when deliberating Senator

Cruz’s postcard proposal. Indeed, a program replacing the IRS altogether will not be so simple a

task. Foremost, the concept of using a postcard will strike many -- in our present era at least -- as

rather antiquated. Surely, an online submission of one’s earnings and deduction’s data would

prove far more efficient. And to ensure the accuracy of these filings, recent advances in

technology would be utilized. In truth, it will be these very same technological advances that

enable our government to make this transition out of the IRS system in the first place, a transition

into something altogether different, and far more cost efficient, than ever before observed. As

for a name, I suggest that the new system adopt a somewhat generic name, for instance, the

Government Tax Retrieval System (GTR hereafter), a name that will no longer generate the

innumerable nightmares associated with its predecessor.

The Feasibility of the Proposed GTR System

Political writers, although they have excellent ideas, are often unpractical.212

Aristotle cautions us on the frequent impracticability of political writers. One might even

suspect he was thinking of John Rawls and his theory regarding the “original position.”213

48

210 Joel McDurmon, Dear Ted Cruz: Here’s What “Abolish the IRS” Really Means (June 4, 2013)

211 Id.

212 Aristotle, The Basic Works of Aristotle, Politics, trans. Benjamin Jowett, pp. 1205-06 (2001)

213 See generally John Rawls, A Theory of Justice, rev. ed. (1999)

However, there is nothing impractical, lofty or otherworldly about deliberations regarding W-2

forms. Thus, there will be scant opportunity herein to depart from any realm of practicality.

The vast majority of American citizens generate yearly earnings that are summarized in

the all-too-familiar W-2 forms received by the first week in February. These forms are

distributed during this time in response to the IRS’ required January 31st W-2 submission

deadline. However, this deadline is only for sending this form to employees; the IRS does not

require employers to send the form to the government until March 31st.214 Which means that

many tax payers have not only already filed their taxes, but have even received their refund or

submitted payment for what they owe prior to the IRS ever receiving their data.215 Yet this

bifurcation of data submission proves entirely unnecessary. It is no more difficult to submit W-2

forms to the IRS than it is to send them to employees. Indeed, a submission to the government

can be made electronically and in batches, and thus will be accomplished with far greater ease

than what is entailed with sending them to each and every individual employee. Thus, the

government's tax retrieval system would be, henceforth, on the same page as the filer. However,

we have yet to address the appreciable significance of factoring deductions into this tax retrieval

processing analysis. Hence, we are not quite ready to have our taxpayer file just yet.

Leaving aside -- altogether -- Senator Cruz’s elementary postcard proposal, I wish to

nonetheless embrace the simplicity of his deduction allowance scheme. Senator Cruz

recommends that we allow but two deductions; charitable contributions and mortgage interest.

49

214 Jeanne Sahadi, 4 Easy Ways to Combat Tax Fraud (March 13, 2015) (The present scheme under the IRS doesn’t require employers to send the data “until March, 31, after many people have already filed their returns and claimed their refunds.” Of course this would change under the newly proposed program -- whereby requirements for submission to the new Federal Tax Retrieval System would be identical to the January 30th deadline, thus providing employee data to the IRS well ahead of time.

215 Id.

For charitable contributions are often encouraged by the resulting tax relief achieved. And to

remove this deduction would be, for many charitable organizations, tantamount to precluding

501(c)(3) tax exempt status for the non-profits discussed earlier. Indeed, the resulting tax

benefits accorded to charitable giving constitutes the grease, if not the very fuel, which drives

organizations and various individuals to make the donations in the first instance. Thus, the

preservation of these deductions must remain paramount to our scheme. For, if such deductions

were lost, while donations would not cease, they would unequivocally be lessened. Hence, the

primacy of charitable deductions.

Yet how is the GTR system going to establish which entities are, or are not worthy of tax

exempt status as a charitable organization, or an otherwise eligible non-profit organization? Will

this not then return us to the very circumstances we wish to extricate ourselves from in the first

place; from the political shenanigans so readily intertwined with tax-exempt status approval?

The answer, I think, can be found in a realm of intellectual property law. In the vast majority of

cases, copyright law protection is denied only to those who are shown by others to be unworthy

of copyright protection.216 And the consequence of this liberal standard is that approximately

ninety-five percent of copyright applications are granted.217 Hence, the approach to tax exempt

approval should be equally liberal. Only in cases where a clearly bogus application -- using, for

instance, a clear and convincing evidence standard -- is submitted, or where it is later discovered

that outright fraud has been perpetrated, should the application, or previously granted tax-exempt

status, be denied.

50

216 Adam MacLeod, Lectures on Copyright Law (September, 2013)

217 Id.

As for mortgage interest, it is a burden most of our citizens are saddled with. Thus, to

provide some relief for this interest in the manner of tax deductions delivers a significant degree

of solace to our citizenry. Moreover, it generates incentives to make homebuyers out of those

who would otherwise choose to rent. And home ownership, which in many cases is the most

significant form of property ownership for individuals, can enhance not only the stability of this

nation’s populace, but help to instill greater virtue among our citizenry as well.218 Furthermore,

this ownership can help generate and distribute wealth, assets that would otherwise be

concentrated among the privileged and wealthy few. Yet, as with Senator Cruz, I propose that we

eliminate the additional complexities afforded by the innumerable deductions existing under the

present tax code.219 Now, aside from the fact that our government may need to offer employment

retraining grants to a good many accountants, this modification -- or rather reformation --

appears not only plausible but, more significantly, sound. For these two deductions, charitable

contributions and mortgage interest, can be integrated into the government's tax retrieval system

with the greatest ease.

When we consider the great wisdom in having W-2 forms submitted to the government

contemporaneously with those sent to employees, we should not neglect to see how easy it is to

incorporate the additional deductions aforementioned as well. Indeed, the vast majority of

charitable organizations keep records of their donors’ contributions. It may, in fact, be the case

that in many instances they are required to do so. Which is why they often send each donor a

summary of those contributions made at the end of each year. Thus, as with W-2 forms, these

donative records can readily be submitted to the government by January 31st, making this

51

218 See generally, Adam MacLeod, Property and Practical Reasoning (2015)

219 Eric Bolling, Senator Ted Cruz Leading the Charge on Abolishing the IRS (June 1, 2013)

information not only accessible, but available to be matched with each taxpayer’s filing. Beyond

this, it is no secret that banks have the same obligation as employers to provide tax information

to their customers, and therefore deliver mortgage interest statements to their mortgagors shortly

after the first of every year. Thus, like W-2 income and charitable contributions, this data would

-- under the GTR system -- be provided simultaneously to both the government and the

employee by January 31st, and thus be matched to the taxpayer’s online filing. And in instances

where the government’s figures fail to comport with the information submitted by the taxpayer,

the filing will be rejected -- at least until the filer achieves consistency with the government’s

data. Thus, see how readily we move beyond the simplistic, as well as strikingly implausible,

postcard scenario proffered by Senator Cruz.220 Perhaps he was merely using this as a

hyperbolic example; illustrating the considerable need and desire for simplicity in a replacement

tax system. Nevertheless, Senator Cruz’s assertion that the IRS is altogether broken and thus in

need of replacement is a deduction consistent with the sentiments of the vast majority of this

nation’s citizenry.221 Still, the challenges associated with this proposal have yet to be fully

addressed. There is, after all, the significant issue of enforcement, particularly considering the

huge reductions in staff proposed hereafter.

To prevent certain mischievous individuals from taking undue advantage of the system,

particularly when considering that this new tax system will be, as a consequence of the

considerable reductions in staff, more liberal in its enforcement regime, the fines imposed on

transgressors should become far more weighty. Indeed, in cases where the government evinces a

52


221 Id.

certain willfulness, thus intentionality, with an individual’s failure to submit his fair share of

contribution to this nation’s government, his burden should be subjected to treble penalties.

Those thought, based on the circumstances and evidence amassed, to have omitted the full extent

of their tax obligations inadvertently shall be levied a mere singular penalty. Yet significantly,

beyond constituting a deterrent for transgressions, and thus reducing instances of the same, these

increased penalties will, in essence, compensate -- by the higher amounts amassed -- for taxes

lost from those individuals who fail to comply. Hence, these proposed modifications will

provide more than a discouragement to deviants; they will, in actually, nearly compensate for

these same mischievous individuals gone unrecognized in the process. Still, I have yet to

address the reductions in staffing to any degree of particularity, and thus will do so now.

For the new GTR tax system, I propose there be a reduction in employee numbers to

5,000. Shockingly, this constitutes a ninety-five percent reduction, considering the IRS’ current

staff load of 100,000 employees.222 Yet this reduction in overall employee burden will assist in

reducing the current ten billion dollar budget for annual expenditures,223 reducing it down to one

billion, with a significant portion of that amount being allocated to investments in new

technology, as opposed to a furtherance in bureaucratic employee payroll. And in light of this

patent dearth of staffing, GTR employees will focus their attention on assessing the tax filing

submissions for sole proprietors and companies that produce net revenues exceeding one million

dollars annually, as these returns will necessarily bring more complexity; thus room for mischief,

and in other cases errors, on the part of their filers. Yet significantly, this cut-off of one million

53

222 Stephen Moore, The IRS Has Around 100,000 Employees. And Yet It’s Still Incredibly Incompetent (January 18, 2015)

223 Howard Gleckman, IRS Gets Hammered in the 2014 Budget Agreement (January 14, 2014)

dollars in net revenue will mean that this new scheme will neither pester nor oppress citizens

running much smaller companies; individuals whose earnings are, in the main, so scant they can

hardly survive as it is.

On a more fortuitous note, it is quite true that this abolition of the IRS heretofore

proposed could not take place but for the recent achievements in technological efficiencies. In

our present day, technology can do so much of the work that could be accomplished only by

individuals in a previous era. Yet for us to disregard these technological advances, and thus fail

to utilize them, would be like an ostrich hiding its head in the sand. And there is no virtue to be

found in keeping things “business as usual.” Indeed, the citizenry of this nation manifestly

demand far more efficiency and appreciably less bureaucracy from our present government. And

surely, if our country wishes to continuously enjoy its paragon stature amongst the world’s

leading nations it must accomplish that which our citizens so ardently require.

The Consumption Tax

While not wishing -- outside of the postcard suggestion -- to disparage the ingenious

nature of Senator Cruz’s proposal 224 to any appreciable degree, I would, nevertheless suggest a

particular modification which is, I believe, of great importance. Thus, I recommend halving the

earnings tax -- thus making it far more agreeable to the citizenry as a whole and considerably

more egregious to transgress -- and employing a six percent spending tax in its stead, albeit at the

manufacturing level. Indeed, a consumption tax would preclude those hefty spenders, whose

primary resources lay hidden abroad, from effectually avoiding the income tax altogether --

through their various, and often nefarious, offshore banking schemes. And while this may add

54


some complexity to the implementation of the GTR taxation system as a whole, I think it is a

degree of complexity that constitutes a necessary evil, particularly when considering how

determined and efficacious the uber-wealthy are in evading what many would assert is their fair

share -- based on their income produced and the contributions of those not engaged in similar tax

avoidance schemes -- of contributions to our government.

On the issue of investment income, a substantial capital gains tax cannot, I think, be

justified. And it should, in fact, be brought to the same level as that of taxes on all earnings. For

what difference does it make whether an individual makes $10,000 of yearly profit on stock

transactions in one minute or one year. Earnings are earnings, regardless of the timeframe of

their generation. Where is the justice in the government punishing an adept investor, while

rewarding those who sit slothfully on their economic resources; where the full extent of their

engagement involves little more than crossing their fingers and hoping for the best. Surely,

industry should be rewarded, not penalized! In summary, a flat earnings tax will justly level the

playing field, largely by eliminating the innumerable ways that wealthy individuals and

corporations effectually reduce their tax liability to a level that seems unconscionable to the vast

majority of this nation’s citizenry, and patently unreasonable to the rest. Most significantly, this

taxation scheme will make the IRS entirely unnecessary, immediately saving taxpayers and our

government something in the order of nine billion dollars per year.225 Further, it will appreciably

reduce the stress borne by a majority of our nation’s populace, increasing, as Cicero assures, “the

tranquility and happiness of human life,”226 leading to a more productive and thus prosperous

55

225 Howard Gleckman, IRS Gets Hammered in the 2014 Budget Agreement (January 14, 2014) (based on the excess of ten billion per year spent presently, minus approximately one billion for a greatly simplified replacement tax recovery system)

226 Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk 2, sec. 11 (2000)

citizenry. And these welcome repercussions will not merely help to ensure to our nation’s

preservation, but enhance the prospects for America’s flourishing as well. Which satisfies the

criterion for political virtue that Montesquieu,227 and other political philosophers of great

renown, describe.228 Hence, by abolishing the IRS, that quintessential paradigm for political

virtue can be achieved. Yet before this can be accomplished, the structure and workings of the

spending tax, a taxation scheme feature that is essential if our government wishes to amass all

the revenue it has a rightful claim to, must be further considered.

Too many of the uber-wealthy find ways to evade taxation. Thus, they enjoy their

domestic liberties and its resulting fruits, but do little to contribute to the furtherance of those

same liberties and their innumerable propitious aftereffects. And it is the very existence of these

privileged individuals that compels a political and economic theorist to go beyond what

simplicity, or even Occam’s razor, would otherwise dictate. However, the implementation of a

spending or consumption tax (I use the terms here interchangeably) can be made rather simple.

In our present system, the complexity and bureaucracy entailed in levying a consumption tax is

considerably exacerbated when this tax-gathering occurs at the consumer, point-of sale level.

For instance, in the former case a merchant must, when running the store, add on a tax in

addition to the retail price. And beyond this cumbersome act of collecting the tax itself, the

56


228 John Locke, The Second Treatise on Government, pp. 7-8 (1921), Edward Gibbon, The Fall and Decline of the Roman Empire, vol. 1, p. 13 (1993), (That public virtue, which among the ancients was denominated by patriotism, is derived from a strong sense of our own interest in the preservation and prosperity of the free government of which we are members) (see also Hugh Trevor-Roper’s introduction to Gibbon, p. Lxxxviii, where he infers that Machiavelli’s thoughts provided the genesis for Gibbons, and perhaps the basis from other renowned political philosophers’ thoughts on the matter. For instance, when an individual analyzes Montesquieu’s The Spirit of The Laws, he can readily deduce that Montesquieu was a great fan of, and thus relied heavily upon, Machiavelli’s work), Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk. 2, sec. 11 (2000), Aristotle’s, The basic Works of Aristotle, Politics, trans. Benjamin Jowett, pp. 1180, 1270-71, 1271 (2001)

shopkeeper must, moreover, worry himself over the plausible threat of an odious tax audit.229 It

was, in fact, Machiavelli who observed that, fearing the many negative repercussions resulting

from such audits, numerous potential shopkeepers were thus “afraid of opening up a trade for

fear of taxes.”230 Additionally, a consumption tax on goods or services, particularly if it is an

excessive one, is quite often deemed noisome to the buyer of those goods or services, potentially

chilling his desire purchase the same items or services again in the future. Hence, it may, at first,

appear that when contemplating a consumption tax, the balance is skewed toward its disfavor

rather than its approbation.

However, if there happened to be a method for hiding such a tax from the eyes of the

consumer, this would likely be advantageous to all, particularly from an economist’s vantage

point. Yet beyond this, it would release every retailer from the tremendous burden of submitting

quarterly tax filings, and their accompanying contributions. Of even greater significance, it

would eliminate the ominous threat of their being audited for these very same submissions, and

therefore preclude their subjection to one of the most repugnant experiences in the history of

mankind; the dreaded tax audit.

A Consumption Tax is Both Fair and Just

It is Adam Smith who, above all others, informs us about the fairness of a consumption

tax.

Such taxes on luxuries . . . are paid finally, or without retribution, by whoever consumes the commodities upon which they are imposed. Yet they do not always fall equally or proportionately upon the revenue of every individual. As every man’s humour regulates the degree of his consumption, every man contributes rather according to his humour

57


230 Niccolò Machiavelli, The Prince, p. 72 (1992)

than in proportion to his revenue; the profits contribute more, the parsimonious less, than their proper proportion.231

In elaborating on the fairness of such a tax, Smith further posits:

If you accept, however, this very peculiar situation, any inequality in the contribution of individuals, which can arise from such taxes, is much more than compensated by the very circumstance which occasions that inequality; the circumstance that every man’s contribution is voluntary; it being altogether in his power either to consume or not to consume the commodity taxed.232

Yet to hide this consumption tax, as Adam Smith,233 Montesquieu,234 Machiavelli,235 and

many others suggest -- so as not to offend or chill a consumer’s interest in the very goods or

services he desires -- the government should levy the tax where the consumable item is

manufactured, thus making the tax essentially blind to all but the original producer, who then

simply builds the tax back into his product’s wholesale price.236 In support of this taxation

methodology, it is Adam Smith who asserts, ‘[w]hen [taxes] are advanced by the merchant or

manufacturer, the consumer, who finally pays them, soon comes to confound them with the price

of the commodities, and almost forgets that he pays any tax.”237 It is thus here that Machiavelli’s

general observation holds true; that “injuries ought to be done all at one time, so that, being

tasted less, they offend less.” In truth, by disguising the tax from the consumer altogether, little --

if any -- injury is felt by them at all.238 And surely, the value of such taxation stratagems were not

58

231 Adam Smith, The Wealth of Nations, pp. 966-67 (1994) (emphasis added)


233 Adam Smith, The Wealth of Nations, pp. 967-68, 969 (1994)



236 Adam Smith, The Wealth of Nations, pp. 967-68 (1994)

237 Id.


unfamiliar to Montesquieu, for he asserts; “[t]he duties felt least by the people are those on

merchandise, because they are not demanded of them in form. They may be so prudently

managed that the people themselves shall hardly know they pay them.”239 In furtherance of this

line of thought, Montesquieu nevertheless suggests that “[i]n order to make the purchaser

confound the price of the commodity with the impost, there must be some proportion between

the impost and the value of the commodity: for which reason there ought not to be an excessive

duty upon merchandise of little value.”240 Yet this prodigy of political theory cautions, “[t]here

are countries in which the duty exceeds seventeen or eighteen times the value of the

commodity.”241 In which “case the prince removes the disguise.”242 In further illustrating this

point, Montesquieu asserts: “There are two states in Europe where the imposts are very heavy

upon liquor: In one the brewer alone pays the duty, in the other it is levied indiscriminately upon

all the consumers; in the first nobody feels the rigor of the impost, in the second, it is looked

upon as a grievance.”243 And it was Adam Smith who commonsensibly observed that “such taxes

necessarily occasion some obstruction or discouragement to certain branches of industry. As

they always raise the price for the commodity taxed they so far discourage its consumption, and

consequently its production.”244 In the most extreme cases, when a spending tax rises to

exorbitant levels, “taxation on necessaries encourages citizens to remove to another state” and

59


240 Id. at 182

241 Id.

242 Id.

243 Id.


thus nation.245 Yet, in what may prove to be the greatest example of excessive taxation in the

history of civilization, it was discovered that the Byzantine Emperor Anastasius, in an attempt to

replenish the coffers of the state, “invented a tax for breathing, ut quisque pro haustu æris

penderet” 246 Finally, it is Montesquieu who astutely observes that,

[h]igh taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging smuggling, frequently afford a smaller revenue to government than what might be drawn from more moderate taxes. When the diminution of revenue is the effect of the diminution of consumption, there can be but one remedy, and that is the lowering of taxes.247

Now surely, there are weaknesses with the foregoing consumption tax scheme, the

foremost of which involves the amount you will be collecting, at least if the percentage of

taxation is to be equivalent to what it would otherwise be if taxes continued to be levied at the

consumer point-of-sale level. For instance, if John Deere manufactured forty tractors with a

collective wholesale price of ten million dollars, and its retailers would sell those same tractors

for a price that is thirty percent higher than wholesale, if the spending tax is five percent, then the

government will be out five percent of three million dollars, or a total of $150,000.00. We can

easily remedy this deficiency, however, by anticipating this loss in tax revenue beforehand, and

therefore adjusting the rate at the manufacturer accordingly. For instance, the tax rate at the

manufacturer level could be increased to seven percent, which would garner $200,000.00, an

amount constituting $50,000.00 more than if the consumption tax were levied at the retail level.

And at six percent, the government would glean a portion under the amount collected at the retail

level, thus recovering $50,000.00 less. Thus, a six percent tax at the manufacturer would make

60

245 Id. at 1006

246 Charles de Montesquieu, The Spirit of the Law, Thomas Nugent, trans., p. 186, fn. 531 (2010)


the tax at the consumer point-of sale level effectively less than five percent. Yet the shortfall in

tax revenue would be more than made up by what will be an inherently increased level of

compliance, as the tax is levied automatically -- and in masse -- at the manufacturer level. And

interest gained through this advance taxation would provide further offsets. But most of all, the

money saved through foregoing the necessary bureaucracy involved with gathering taxes at the

consumer level would constitute the greatest savings of all. Thus, one can see how advantageous

this structure is, for the nation as well as its citizenry, and how taxing less readily garners more.

This plan would, indeed, constitute one of those rare and highly desirable quintessential win-win

arrangements; a circumstance highly sought after in the course of nearly every business

encounter.

Lastly, a consumption tax is, from numerous vantage points, a just tax. Indeed, so few

among us find ourselves seriously deliberating the purchase of an item we can ill afford. Yet

surely some will assert, as did Adam Smith, that “[t]he necessaries of life occasion the great

expense of the poor.”248 And the acuity of Smith’s reasoning fails to be softened by the

rationalization that if one cannot afford an item, that individual will surely refrain from its

purchase. Further, the severity of Smith’s assertion is not likely lessened by offering that a

consumption tax is levied at a time when the consumer is most fully able to afford it.249 Or that

this ability to afford is most patently evidenced by the individual’s very desire to make the

purchase in the first instance.250 Surely, the aforementioned argumentation founders in the face of

61

248 Id. at 906

249Id. at 967-68

250 Id.

Smith’s observation that “the necessaries of life occasion the great expense for the poor.”251

Where is the justice in levying a disproportionate amount of taxation -- through the taxation of

necessary food items -- on those dwelling in the lowest echelons of poverty? Surely, this would

strike many as patently unjust; adding the greatest insult to what is already a considerable injury.

This may, in truth -- particularly for those struggling to provide even the barest necessities of life

-- be that one additional burden that ultimately “breaks the camel’s back.” Indeed, for some

similarly situated individuals, a six percent consumption tax could truly make the difference

between life or death. Yet such deep concerns may be expeditiously allayed by the fact the vast

majority of citizens living at or below the poverty level in this nation utilize food stamps -- a

program more favorably known as SNAP. Hence, these individuals are not likely to be harmed

by a consumption tax on these necessary food consumables, as their food purchases are

automatically exempted from any form of taxation whatsoever. And, under the GTR plan

proffered herewith, that exemption would remain intact.

The Negative Repercussions Associated with Abolishing the IRS

The ironic twist in this unfolding of history is the following; within months of the IRS’

proving itself utterly unworthy of the American people’s trust, our President took massive action,

pushing the Patient Protection and Affordable Care Act health mandate through Congress. This

health mandate, more commonly referred to as ObamaCare, and its approval by Congress and the

Court appears to ensure the IRS’ continued survival. This is because the penalty for not enrolling

in ObamaCare is, under the Supreme Court’s ruling, deemed a tax. And it is a tax that is to be

62

251 Id.

collected by the IRS.252 Thus, one of the drawbacks or -- as almost any Republican would

assuredly proclaim -- benefits of abolishing the IRS would be the unravelling of one of the most

essential ObamaCare features; deeming the health mandate’s penalty feature a tax to be collected

by the IRS.253 Indeed, it is this very element that enabled ObamaCare to survive U.S. Supreme

Court scrutiny in the first instance.254 However, ObamaCare for all its merits, or lack thereof,

need not be eliminated under the new program; the tax could just as readily be garnered under

the new GTR system, thus keeping the health mandate inviolate. Nevertheless, an appreciable

portion of this nation’s citizenry, all members of Tea Parties included, are patently displeased

with the President’s new health mandate, and thus would not be terribly disheartened to see its

departure hastened. Indeed, they believe its continuance is incontrovertibly more harmful to this

nation than not. Hence for them, this health mandate’s subsequent demise, concomitant with the

IRS’s departure, would constitute no great loss. Still, as Grotius asserts, “no law can be

convenient for every particular person, it is enough, if it be beneficial in general, and to the

greater part.”255 Nevertheless, the jury is still out on the health mandate’s effectuality overall.

Yet if it is discovered to help more people than not, partisans should, as Grotius suggests,

acquiesce. And as for its remaining imperfections, he asserts, “[i]n the matter of civil

government, it is impossible to provide against all inconveniences.”256

Yet the fact that the IRS has ostensibly -- through its most recent actions -- made itself a

political ally to the Democratic party makes this newly forged relationship all the more peculiar.

63

252 Nat’l Fed’n of Indep. Bus. v. Sabelius, 132 S. Ct. 2566 (2012)

253 Id.

254 Id.

255 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 345 (2005) (quoting Cato)

256 Id. at 307

And this is particularly the case when one considers that our President has, albeit through

dormant inaction rather than action, appeared to be one of the IRS’ biggest fans. Yet how could

it be the case that our President discovered himself utterly oblivious to the IRS’ innumerable --

and most glaring -- failings. Thus, when contemplating President Obama’s acts of omission,

surely, the thought of abolishing the IRS was obviously the farthest thing from his mind. Yet

what troubles most individuals -- at least those possessing even the remotest sensitivities of

conscience -- is that our President’s response to this crisis of corruption, once it was uncovered,

was one of denial and delay. On this issue, dilatory stratagems appeared to constitute the

decorum of the day. Yet we must remain forever mindful that, when assessing the actions of the

President, surely “the buck stops with him.”257 And this head in the sand behavior, coming from

one of the most intelligent beings among men, evidences something beyond an appreciable

degree of ignorance. Rather, it demonstrates that President Obama decided to turn a blind

partisan eye to the IRS’ innumerable failings, as well as their most recent -- and reprehensible --

acts of corruption. And while it is true that “[w]e must bear with the follies of Princes,”258 and

that “[t]here will be faults as long as there are men.”259 it is equally true that “[h]e who does not

punish evil commands that it be done.”260

Unsurprisingly, rather than seeing the elimination of ObamaCare as a negative, Senator

Cruz thinks the IRS’s recent shenanigans should generate even greater concern among our

nation’s citizenry; that these recent events should, in fact, raise some deeply red, and high-flying

64

257 President Harry Truman’s desk sign read “The Buck Stops Here.”

258 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 341 (2005) (quoting Euripides)

259 Id. at 274

260 Leonardo da Vinci, The Notebooks of Leonardo da Vinci, trans. Jean Paul Richter, p. 216 (1888)

warning flags among our populace. Thus, Senator Cruz argues “that this relationship” between

the new health mandate and the IRS “makes the IRS even more dangerous.”261 Which makes the

consideration that by eliminating the IRS, one could effectually kill two birds with one stone,

eradicating the health mandate and the IRS in one fell swoop, all the more intriguing. Yet surely

any attempt to address the failings of ObamaCare, or deliberate the advantages of abolishing this

health mandate altogether, would take us far afield from the purview of this paper. Thus, I shall

refrain from treading in those treacherous waters any further.

It presents as little surprise to most to learn that nearly every American possesses a

considerable degree of animus toward the IRS -- save the 100,000 individuals working for this

leviathanic organization.262 Thus, it should be unsurprising to discover that there exists a paucity

of extant literature where authors seek to refute assertions that the IRS’ days on earth should be

numbered. Nonetheless, there are some who, while readily acknowledging the advantages of

eliminating this over-burgeoned -- already behemoth -- bastion of bureaucracy, nevertheless

question the feasibility of taking what appears to many as an extremely drastic course of

action.263 How can this be done, they ask? They have existed as an integral part of our

government for so long. Yet could it be that there now exists a sense of permanency that the IRS

joyfully and freely basks in; a permanency which precludes even the thought of its departure

from arising? Is it unthinkable to most that we should take such measures; that the majority of

our nation’s citizens would seek their elimination? Perhaps this is so. And to make matters

worse, there exists in the human psyche a pervasive and underlying inertia which further

65

261 Fox News, Senator Cruz Leading the Charge on Abolishing the IRS: GOP Lawmaker Makes a Case for Flat Tax (June 3, 2013)

262 Joel McDurmon, Ted Cruz: Here’s What “Abolish the IRS Really Means (June 4, 2013)

263 See Ibid. at 41-47

solidifies this aversion to change. However, if we are to achieve the political virtue that our

philosophical forefathers so firmly held to be our government’s paragon standard,264 and thus

preserve our nation, and perhaps, if we are lucky, even to see it flourish, then we must

necessarily take our minds “out of the box.” Therefore, we must employ divergent thinking to

our current IRS crisis, one that has led to an entire governmental crisis of “CONFIDENCE.”265

And, as laboriously described herewith, anything that undermines the populace’s confidence in

its government ultimately threatens our nation’s ability to survive, which not only offends, but

actually precludes the fulfillment of our government’s principal calling; to achieve political

virtue.266 Thus, when a government acts contrary to this virtue it functions in a manner that is

pernicious to itself. There is surely a tumor in our midst -- in the form of an erosion of

confidence in our government -- and it must not be coddled with. Rather, it must be extricated

from this nation’s political body. Indeed, it was Grotius who observed that “as in the natural

Body, so in the political, the Preservation of the Parts depends on that of the Whole.”267 Hence,

the IRS must be eliminated from our government; not merely within the rhetoric of the upcoming

66

264 Charles de Montesquieu, The Spirit of the Laws, trans. Thomas Nugent, p. 43 (2010), Edward Gibbon, The Decline and Fall of the Roman Empire, vol. 1, p. 13 (1993) (That public virtue, which among the ancients was denominated by patriotism, is derived from a strong sense of our own interest in the preservation and prosperity of the free government of which we are members) (see also Hugh Trevor-Roper’s introduction to Gibbon, p. Lxxxviii, where he infers that Machiavelli’s concept of “public virtu,” in addition to that of Aristotle’s, provided the genesis for Gibbon’s, and perhaps many others political philosophers deliberations on the subject. For instance, one can readily deduce that, based on an analysis of his The Spirit of The Laws, Montesquieu drew heavily from Machiavelli), John Locke, The Second Treatise on Government, pp. 7-8 (1921), Marcus Tullius Cicero, De Re Publica, De Legibus, trans. Clinton Walker Keyes, bk. 2, sec. 11 (2000), Aristotle, The Basic Work of Aristotle, Politics, trans. Benjamin Jowett, pp. 1180, 1270-71, 1271 (2001)



267 Hugo Grotius, The Rights of War and Peace, trans. Richard Tuck, bk. 1, p. 347 (2005) (quoting Lamblichus) (emphasis in the original)

election cycle, but in actuality, and for all time to come. For Aristotle cautions, “no government

can stand which is not founded upon justice.”268

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tea parties and abusive sovereigns-by paul f. hannan

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