IRS and NSA Controversies

In recent months, the Obama administration has been plagued by several serious controversies, chief among them:

• Charges of political profiling by the Internal Revenue Service (IRS) in delaying the approval of tax exemption under § 501 (c)(4) to some "patriotic" organizations, and


• Large-scale domestic snooping by the National Security Agency (NSA) according to Top Secret documents leaked by Edward Snowden.

You may download my PowerPoint presentation (Philosophy Club, The Villages, FL, 5 July 2013) here: https://sites.google.com/site/bigira/philosophy-related-pps/Philo%20IRS%20NSA%20July%202013.pptx?attredirects=0&d=1

IRS POLITICAL PROFILING CONTROVERSY

According to the May 2013 report by the US Treasury Department Inspector General (IG) for Tax Administration (.pdf available here: http://www.washingtonpost.com/blogs/wonkblog/files/2013/05/201310053fr-revised-redacted-1.pdf ), starting in 2010 and continuing through 2012 and two election cycles, "inappropriate criteria were used to identify tax-exempt applications for review".

The IG Report identified some specific inappropriate criteria including "Patriots", "Tea Party", "Issues include government spending, government debt or taxes", "Education of the public by advocacy/lobbying 'to make America a better place to live'", and "Statement in the case file criticize how the country is being run". [exact quotes, including grammatical errors]

The result was that some applications submitted by Liberal groups were approved for § 501 (c)(4) while otherwise identical applications by Conservative groups were forwarded to a team of "specialists" and thus delayed for years.

According to the IG Report:

Organizations that applied for tax-exempt status and had their applications forwarded to the team
of specialists experienced substantial delays. As of December 17, 2012, many organizations had
not received an approval or denial letter for more than two years after they submitted their
applications. Some cases have been open during two election cycles (2010 and 2012). [my bold]

On 13 May 2013, a day before the IG Report was issued, President Obama stated that the practice was "Outrageous, if true."

The next day, when it was clear that the charges were indeed true, Obama followed up stating:

"The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity.

“This report shows that some [IRS] employees failed that test. I’ve directed Secretary Lew to hold those responsible for these failures accountable, … so that such conduct never happens again.

“But regardless of how this conduct was allowed to take place, the bottom line is, it was wrong."

The IG Report included a detailed list of some of the "unnecessary" questions asked of targeted organizations by the "specialists" to delay approval.

1 Requests the names of donors. 2 Requests a list of all issues that are important to the organization and asks that the organization indicate its position regarding such issues. 3 Requests 1) the roles and activities of the audience and participants other than members in the activity and 2) the type of conversations and discussions members and participants had during the activity. 4 Asks whether the officer, director, etc., has run or will run for public office. 5 Requests the political affiliation of the officer, director, speakers, candidates supported, etc., or otherwise refers to the relationship with identified political party–related organizations. 6 Requests information regarding employment, other than for the organization, including hours worked. 7 Requests information regarding activities of another organization – not just the relationship of the other organization to the applicant.

Were "Progressive" Organizations also Targeted?

The Democrats on the House Ways and Means Committee published what they said was evidence that "progressive" groups were also targeted (.pdf available here: http://democrats.waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/November%202010%20BOLO%20IRS0000001349-IRS0000001364.pdf).

Indeed, the term "Progressive" does appear on a spreadsheet utilized by the IRS reviewers, however, that line of the spreadsheet applies only to § 501 (c)(3) applications, which are very different from the 501 (c)(4) applications that are the main object of the IRS political profiling controversy.

As the IG Report makes clear, § 501 (c)(3) organizations may NOT "engage in political campaign intervention" while § 501 (c)(4) groups may do so up to 40% of their activities. Another difference is that contributions to § 501 (c)(3) groups ARE tax deductible by the donors while § 501 (c)(4) are NOT tax deductible by the donors.

The House Ways and Means Democrats include one example of a "Tea Party" group that appears on an IRS spreadsheet, but careful observation shows that that line applies to BOTH § 501 (c)(3) and § 501 (c)(4) groups. It should be obvious that tax exemption should not be allowed for donors for any "political campaign intervention", whether Liberal or Conservative.

Thus, there is no evidence that "Progressive" groups were subjected to any profiling related to § 501 (c)(4), while it is clear, even from the IRS spreadsheet example published by the Democrats, that such profiling was inappropriately applied to Conservative groups.

Should ANY "Political" Organizations Enjoy BOTH Tax-Exemption AND Anonymity for their Donors?

In reviewing this controversy, I wondered why the IRS allows MAJOR DONORS to make ANONYMOUS contributions to ANY tax-exempt organization that engages in any form of "political campaign intervention" (be it Liberal or Conservative) .

Well, it turns out that this strange rule dates from the 1958 Supreme Court decision regarding the NAACP vs Alabama (see http://en.wikipedia.org/wiki/NAACP_v._Alabama) where the Supremes ruled that disclosure of names could render private donors vulnerable to retaliation.

OK, if that is the Law of the Land, so be it, but it should be applied EQUALLY to both Liberal and Conservative groups. Don't you think?

In this case, IRS political profiling, targeting Conservative groups, over two election cycles (2010 and 2012), has almost certainly resulted in a net benefit for Liberal organizations in terms of fund-raising, because some donors will justifiably hesitate to contribute to any organization that has not been approved by the IRS for tax-exempt status.

Has this affected election results at the National level (House, Senate, Presidency), and/or local levels (Governors, State Legislators, etc.)? No one will ever know for sure, but I would think at least some close elections could have gone the other way absent IRS targeting of Conservative "political campaign intervention" groups.

NSA SNOOPING CONTROVERSY

Which brings us to the second part of this (admittedly long) topic posting.

The reason I have linked the IRS and NSA controversies should be painfully obvious:

If any Administration, whether Democrat or Republican, misuses an agency of the government for political profiling purposes, as the Democrats have clearly misused the IRS for two election cycles, how can we trust them not to similarly misuse the awesome snooping powers we now know have been entrusted to the NSA ?

We all know that Edward Snowden, an employee of an NSA contractor, went to Hong Kong (controlled by China) and released several TOP SECRET documents revealing that the NSA has engaged in large-scale domestic snooping. There is no doubt that all TOP SECRET materials contained on the laptop computers and other computer media he had with him have been downloaded by the Chinese and are now in their possession. Snowden subsequently went to Russia, and has been there long enough for the Russians to have downloaded all material he had with him. Also, there is no doubt that both the Chinese and Russians have interrogated Snowden thoroughly and extracted the critical TOP SECRET NSA information that he possessed.  

After the NSA leak was made public by Snowden, President Obama assured the American public:

“… nobody is listening to your telephone calls… 

“… you can't have 100 percent security, and also then have 100 percent privacy and zero inconvenience. We're going to have to make some choices as a society… 

"I don't welcome leaks … There's a reason these programs are classified." [my bold and italic]

Please note that I have bolded the President's word "Nobody". Does that mean no person is listening to our telephone calls (and that no person is reading our emails and other computer communications)?

For example, what if some automatic computer program was listening to our telephone calls (and emails) and searching for some combinations of words that might indicate criminal or terroristic intent? And, only if and when the computer program discovered some suspicious messages and identified the people involved, then the NSA went to the FISA court to get a warrant to have some person listen to phone calls (and emails) to and from the identified persons?

I have also bolded and italicized the word "is". As President Bill Clinton famously observed, "It depends upon what the meaning of the word 'is' is."

Is Obama assuring us that nobody is listening to our phone calls (and emails) right now? What if our phone calls (and emails) are being automatically recorded and stored away by the NSA for future use if and when subsequent analysis reveals that they may relate to suspicious activities and then the NSA gets a FISA warrant to have some person listen to them?

That said, I agree with Obama that we cannot expect "100 percent privacy and zero inconvenience" and maintain reasonable security against criminal and terrorist attacks. Like him, given this difficult choice, I come down on the side of security.

What do we know about NSA snooping?

Started as early as 2006 (under G.W. Bush), continued through present (2008-2013 under Obama).

Key members of Senate and Congress are aware of classified details of NSA programs and exercise oversight. Judicial oversight is exercised by FISA court.

MetaData is being collected on virtually ALL domestic home phone and cellphone calls (at least the Calling number, Called number, Date, Time, Duration, …) Internet data (VoIP, Emails, Chat, Photos, Videos, Files, Stored Data [“cloud”], Logins, SPECIAL REQUESTS, …)

What do I suspect about NSA snooping?

I’ve worked on classified military projects, but never NSA projects or any projects related to surveillance or data mining, so I am free to “speculate” without revealing classified information.

Based on my knowledge of electronics and computers and the Internet and “artificial intelligence” I never type anything into my computer that I would not mind seeing on the front page of tomorrow’s newspaper or TV news!

For many years I have suspected that NSA (not to mention Google :^) has metadata on all Internet activity and phone calls and that they utilize advanced data mining algorithms to associate Phone numbers, Email addresses, Blogs, Social networks, and so on.

It is also likely they use “artificial intelligence” and “key word analysis” computer techniques to “gist” voice phone calls, looking for languages and word combinations that may indicate criminal or terrorist activities as well as semantic analysis to identify individual writing styles. It is also likely they similarly “gist” Emails, Blogs, Photos and other Internet data and use facial recognition, voice prints, and other biometrics to associate multi-modal communications with particular groups of people and individuals.

Bottom Line

I (along with Obama) am appalled that Edward Snowden violated his pledge to protect classified government documents. Internal government processes (and specialized lawyers) exist for reporting abuses. Snowden should have used these before going to China and before revealing these Top Secret activities to the press. (Hong Kong is an “autonomous” region under the control of China.) We should assume China and Russia have all Snowden’s NSA data.

I generally SUPPORT all the known and most of my suspected NSA snooping activities, assuming proper oversight. As I’ve stated in presentations to The Villages Philosophy Club and my Novel and Blogs, advocates of “privacy” are fighting a phony and lost battle. If you have a home and a job and a credit card and a cellphone and a car – in other words if you are a “respectable” citizen – YOU HAVE NO “PRIVACY”. (The only person with real privacy is the guy using your stolen credit card to buy stuff!)

However, the IRS scandal has increased my distrust of the government. I worry that POLITICALLY-motivated NSA employees may abuse Phone and Internet data for partisan purposes (as some IRS employees have done).

Get the PowerPoint Presentation!

If you'd like more technical background on the "six degrees of separation" between (virtually) any two people on Earth and on the issue of privacy in the Internet age, please download the PowerPoint presentation I gave to the Philosophy Club of The Villages, FL.

Please download that PowerPoint here: https://sites.google.com/site/bigira/philosophy-related-pps/Philo%20IRS%20NSA%20July%202013.pptx?attredirects=0&d=1,

Feel free to express your opinions on this issue by posting a Comment to this Blog.


advTHANKSance

Ira Glickstein 

 

James Hansen favors Carbon Tax

I'm surprised and pleased that I agree with the Director of NASA’s Goddard Institute for Space Studies (GISS), James Hansen, on the need for a Carbon Tax. IMHO, Hansen has gone overboard in his dire predictions regarding human-caused Global Warming. GISS, his agency, has come in for some criticism here for what appears to be some bias in Global Warming data.

Nevertheless he is right on this one!

My support for a punitive Carbon Tax goes back many years and is well documented on this Blog: (July 2007, May, October, and November 2008).

An Opinion piece in today's Wall Street Journal brought Hansen's statement to my attention. (The chart above is from Hansen's June 2008 presentation.)

With gasoline at $2 or less, and the memory of $4 and more clearly in mind, NOW is the right time to impose a $1/gallon carbon tax.

Hansen calls his proposal "Tax and 100% dividend" because it will apply equally to all forms of sequestered carbon (coal, oil, natural gas) and all of it will be returned, equally per-capita, to everyone with a Social Security number.

Other than collecting and distributing the carbon tax dividend, the government will have no role in using these revenues to select the specific alternative energy solution that will arise. By making carbon-based energy relatively more expensive, the carbon tax will spur consumers to conserve energy and also to select products that utilize alternative, non-taxed, energy. The tax will thus put an umbrella over researchers and corporations working on all sorts of alternative energy without imposing the heavy (and politicaly motivated) hand of government "experts" to tip the balance in favor of any one.

The proposed carbon tax will be revenue-neutral, returning money to the people. The tax will also be ultra-progressive since it returns the money equally per-capita while the rich will be paying most of the tax because they use more energy and products that require energy to produce and transport.


Here are some direct quotes from Hansen's remarks:

Tax and 100% dividend can drive innovation and economic growth with a snowballing effect. Carbon emissions will plummet far faster than in top-down or Manhattan projects. A clean environment that supports all life on the planet can be restored.

... Principles must be crystal clear and adhered to rigorously. A tax on coal, oil and gas is simple. It can be collected at the first point of sale within the country or at the last (e.g., at the gas pump), but it can be collected easily and reliably. You cannot hide coal in your purse; it travels in railroad cars that are easy to spot.

“Cap” [and trade of carbon credits] ... may do as much harm as good. ...

The entire carbon tax should be returned to the public, with a monthly deposit ...

A carbon tax will raise energy prices, but lower and middle income people, especially, will find ways to reduce carbon emissions so as to come out ahead. Product demand will spur economic activity and innovation. The rate of infrastructure replacement, thus economic activity, can be modulated by how fast the carbon tax rate increases. Effects will permeate society. Food requiring lots of carbon emissions to produce and transport will become more expensive and vice versa – it is likely, e.g., that the UK will stop importing and exporting 15,000 tons of waffles each year. There will be a
growing price incentive for life style changes needed for sustainable living.

The present political approach is to set carbon emission reduction goals for 2025 or 2050. The politicians do not expect the goals to be reached, and they define escape hatches that guarantee they will not. They expect to be retired or become lobbyists before the day of reckoning. The goals are mainly for bragging rights: “mine is bigger than yours!”

The worst thing about the present inadequate political approach is that it will generate public backlash. Taxes will increase, with no apparent benefit. The reaction would likely delay effective emission reductions, so as to practically guarantee that climate would pass tipping points with devastating consequences for nature and humanity.

Carbon tax and 100% dividend, on the contrary, will be a breath of fresh air, a boon and boom for the economy. The tax is progressive, the poorest benefitting most, with profligate energy users forced to pay for their excesses. Incidentally, it will yield strong incentive for aliens to become legal; otherwise they receive no dividend while paying the same carbon tax rate as everyone.

Special interests and their lobbyists in alligator shoes will fight carbon tax and 100% dividend tooth and nail. They want to determine who gets your tax money in the usual Washington way, Congress allocating money program-by-program, substituting their judgment for that of the market place. The lobbyists can afford the shoes. Helping Washington figure out how to spend your money is a very lucrative business.

But we can save the planet and alligators by making sure that not one thin dime of the carbon tax is siphoned off by lobbyists for their clients – 100% must be returned to citizens as dividend. Make this your motto: “100% or fight! No alligator shoes!”

Check the position of your congresspersons. If they spout things like “global warming is the greatest hoax in the history of the universe”, check the shoes of the people who visit them or have dinner with them. Changes in Congress are needed if we want our children and grandchildren to win this one.

Because of great benefits to the nation, humanity and nature, this approach soon would be adopted by other nations, providing an obvious path toward international agreements. (Jim Hansen)

Ira Glickstein

"Carbon Tax" a Loser (Too Bad)

One key issue in the Canadian parliamentary elections this week was the Liberal Party leader, Stéphane Dion's newfound support for a "carbon tax".

This is a shift for Dion. Previously, only Canada's Green Party supported that type of tax.

Election results indicate the "carbon tax" is a loser. The Conservatives gained 16 seats and the Liberals lost 19. The Conservatives still lack an absolute majority, holding 143 seats to the Liberals 76, with 89 in the hands of three minority parties, the Quebec separatists (50), the New Democrats (37), and the Independents (2). The Greens have zero seats.

As readers of this Blog know I favor a punitive tax on burning of sequestered carbon (oil, gas, coal) as a way to encourage development of nuclear energy and renewable energy (water, wind, biofuels, ...).

All energy used on Earth (with the exception of nuclear) is originally from the Sun.

Some of this energy was delivered to the Earth from the Sun eons ago and was sequestered in the form of carbon and hydrocarbons found in underground deposits of oil, gas, and coal. That carbon was removed from the Earth's atmosphere and, until the industrial age, remained there.

We are now burning increasing amounts of sequestered carbon to energize our mechanized civilization. It is spewing into the atmosphere in the form of man-made carbon dioxide, a "greenhouse gas". Increased levels of carbon dioxide have been detected and are certainly responsible for some percentage of the rise in worldwide temperatures. (The majority of the temperature rise is probably due to Sun and Earth-orbit effects that are beyond our control, but we can control some of the "greenhouse" effects of release of sequestered carbon.)

Nuclear energy is carbon-neutral, and it should be used to reduce cabon emissions, but it is, ultimately, non-renewable.

Until earlier this year, sequestered carbon energy from oil, gas, and coal was considerably less expensive than alternative fuels, which discouraged development of more wind, solar, nuclear, and other sources. The recent spike in oil prices altered that equation, and, as energy prices skyrocketed, many people changed their driving habits and gasoline usage dropped a bit. Interest in alternative energy sources increased.

However, the recent worldwide economic downturn has driven oil prices from about $140/barrel back down to about $70/barrel, half their peak levels. If they remain at these low levels, development of alternate energy will be endangered.

We need to reduce our dependence on sequestered carbon, a non-renewable resource. We must instead power our civilization with the renewable energy that arrives daily from the Sun. As you know, hydroelectric energy is driven by the Sun, which evaporates water from the sea and delivers it as rain that drives our rivers. The Sun also powers the weather, which causes winds that we can capture with wind turbines. Biofuels (including corn and sugarcane-based ethanol) are also powered by the Sun. When we burn biofuels we do release carbon into the atmosphere, but it is carbon that was recently removed from the atmosphere when the crops were grown. As a long-term goal, we may be able to grow crops and then bury them as a way to re-sequester carbon out of the atmosphere.

There are two ways the government can encourage alternative energy. The first is to subsidize it and the second is to punitively tax sequestered carbon as a way to make alternative energy relatively less expensive and allow market forces to do their magic. I favor the second approach. An added benefit of a punitive tax on sequestered carbon is that it will increase the rewards for energy conservation.

According to Wikipedia

The intention of a carbon tax is environmental: to reduce emissions of carbon dioxide and thereby slow climate change. It can be implemented by taxing the burning of fossil fuels — coal, petroleum products such as gasoline and aviation fuel, and natural gas — in proportion to their carbon content. Unlike other approaches such as carbon cap-and-trade systems, direct taxation has the benefit of being easily understood and can be popular with the public if the revenue from the tax is returned by reducing other taxes.

As a C-mind, I find it somewhat distressing that my support of a punitive "carbon tax" puts me with the Green Party and Liberal Party of Canada, and other L-minds like President Bill Clinton, and Senators Al Gore and John Kerry. However, Wikipedia notes:

A carbon tax is an indirect tax — a tax on a transaction — as opposed to a direct tax, which taxes income. As a result, some American conservatives have supported such a carbon tax because it taxes at a fixed rate, independent of income, which complements their support of a flat tax.[2]
Prices of carbon (fossil) fuels are expected to continue increasing as more countries industrialize and add to the demand on fuel supplies. In addition to creating incentives for energy conservation, a carbon tax would put renewable energy sources such as wind, solar and geothermal on a more competitive footing, stimulating their growth. Former Federal Reserve chairman Paul Volcker suggested (February 6, 2007) that "it would be wiser to impose a tax on oil, for example, than to wait for the market to drive up oil prices."[3]

Ira Glickstein

L/C Good Vibes vs Good Deeds

Do liberals earn less money that conservatives? Nope - liberal's family income averages 6 percent MORE than conservative families.

Do conservatives give less of their income to charity than liberals? Nope again - on average, conservative headed households give 30% MORE!

This surprising (to me) statistic throws new light on our ongoing L/C discussion. For the details, see Washington Post columnist George Will's recent column at: http://www.washingtonpost.com/wp-dyn/content/article/2008/03/26/AR2008032602916.html

Perhaps "compasionate conservative" is not an oxymoron? Perhaps liberals like to talk about helping the poor and downtrodden, but when they take action it is by taking higher taxes from the rich and giving it to the poor while keeping a bit for themselves in the form of bigger government with more social services jobs for them and more votes "bought" with government help programs paid for by us taxpayers?

The data in Will's column are from a Syracuse University professor's book and include the following:

• Conservatives give more blood and donate more time.
• Do you REJECT the idea that "government has a responsibility to reduce income inequality"? If so, you belong to a group that give FOUR times more than those who accept that statement!
• People who live in the reddest states give nearly twice the percentage of income to charity as those in the bluest states.

Also mentioned is the strong correlation of altruism with being associated with an organized religion. Perhaps religious belief is the "The God Delusion" (Dawkins) http://tvpclub.blogspot.com/2008/03/god-delusion.html and "god is not GREAT" (Hitchens) http://tvpclub.blogspot.com/2007/12/god-is-not-great.html, but that type of faith leads to actual, personal giving while the opposite leads to talking about it and getting "good vibes."

Ira Glickstein