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 V.17 No.41 | October 9 - 15, 2008 

The Real Side

Tax the Politicians

Let them feel our pain

There’s one booming sector of the economy that escapes taxes the rest of us pay. It’s the political campaign business. Politicians and political parties pay no taxes on the money they raise to chase jobs and power.

True charities, like the Salvation Army and Save the Children, pay no taxes on income, and donors may deduct their gifts from federal taxes. Tax exemption acts as a subsidy of their operations. They get to use 100 percent of everything they bring in, unlike a private business that can use only what is leftover after paying taxes.

Contributions to a political campaign are not tax deductible. Under state and federal law, though, money earned by a politician’s campaign committee is not taxed. Though no politicians will ever be confused with Mother Teresa, their operations are treated the same as charities that clothe the poor and feed the hungry.

Even without its tax-free advantages, the money raised in this election cycle would make a Fortune 500 company envious. So far, a combined $1.35 billion has been raised by all presidential candidates running this election season. Candidates for the House of Representatives have reported raising $694 million. Senate candidates have reported collecting $293 million.

Those sums do not include what has been pulled in by the moneymaking apparatus housed in the Democratic and Republican parties. Between the two organizations, the GOP and DNC have raised $1.88 billion.

These figures, compiled by opensecrets.org, are incomplete. They do not include the final months before Election Day, nor the considerable sums candidates will raise after the election, win or lose. Hillary Clinton, for instance, continues to raise money to pay down a $20 million debt. Bill Richardson is still doing cocktail parties to find cash for his failed race. Somebody will raise tens of millions of dollars for a grand inauguration party.

Incumbency offers the kind of employment security few Americans will ever know.

The figures reported to date come to more than $4.2 billion, none of which has been taxed, and none of which has fed or clothed anyone except for consultants, ad execs, broadcast media millionaires, campaign staff, private pilots and limo drivers.

Sure, campaign workers pay taxes on their salaries. But by escaping taxes on his or her committee’s income, a politician enjoys an enormous advantage private businesses never experience.

Society gives true charities tax-free status because they provide necessary services government and the market can’t or won’t provide. Traditional charities were established as selfless institutions, though scandals, abuses and fat salaries are not uncommon in the nonprofit sector. Generally speaking, society wants to encourage these charitable endeavors and gives a helping hand by foregoing taxing their income.

The tax-free status of political campaigns, on the other hand, encourages more Karl Roves and James Carvilles.

Every politician assures us he’s running because he longs to serve the public interest. But, particularly if he’s running for federal office, the job he wants will place him in one of the highest income brackets. With that job comes glamour, power, junkets, pensions, great health care and a good shot at a paycheck for life. Incumbency offers the kind of employment security few Americans will ever know.

It’s time to re-examine the tax-free status of politicians’ money.

Political campaigns are not charities. $10 million for dried milk and rice to fight famine is an unquestionable benefit for mankind. Who would argue that $10 million’s worth of attack ads makes the world a better place?

Though we are seeing more and more money collected by politicians, there doesn’t seem to be a commensurate increase in their job performances. “Are you better off than you were eight years ago?” Bill Clinton asked in 1992. We’re still being asked that rhetorical question, and we’ll be asked again four years from now, regardless of who takes the White House.

Like the income tax, a tax on politicians should be progressive. That would let them share an experience enjoyed by many Americans who own businesses or are self-employed.

While we’re leveling the playing field, let’s also hit politicians with a death tax. Many politicians keep scads of money after their campaigns have died. Six months after being re-elected in 2006, Bill Richardson still had $738,000 in his kitty. There is no justification for taxpayers subsidizing walking-around money for politicians, or slush funds they can use to help finance other politicians’ quests for power.

Politicians always tell us they feel our pain. Let’s make it easier for them and stop treating them like charity cases.

The opinions expressed are solely those of the author. E-mail jims@alibi.com.

 

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