The Tax Reform Moment

Photo Credit: kenteegardinRupert Murdoch took some heat for observing on Twitter, “Growing IRS scandal makes perfect case for flat tax and abolition all deductions. Nothing could be fairer and abuse free.”

Several responses took Murdoch to task because the abusive treatment of certain groups applying for tax-exempt status, based on their politics, doesn’t have any direct relationship with the progressive income tax system, or plans to replace it.

But if I might be a bit more charitable to Murdoch, I think he was trying to make the broader case that a Flat Tax system would greatly reduce the size and power of the IRS. If his suggestion is taken literally, and all deductions are abolished, it follows that no one would be applying for any sort of tax-exempt status at all. One of the complaints raised by the groups targeted in the IRS scandal is that it put them at a competitive disadvantage against liberal groups, which sailed right through the Tax Exempt Organizations unit and secured approval in a matter of weeks – even when they were actually violating tax law at the time, as in the case of the Barack H. Obama Foundation, run by the President’s half-brother. This isn’t just a scandal about those who were given a hard time; it’s also about those who weren’t.

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