Proposed Rule Would Exempt Massive Union Political Machine
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Nearly 12 years ago, a coalition of voluntary organizations, including the National Right to Work Committee, launched a bid to get key anti-free speech provisions in the so-called Bipartisan Campaign Reform Act of 2002 (BCRA) overturned in court.
In late 2003, the efforts of this free-speech coalition seemed to fail, when a bitterly divided U.S. Supreme Court upheld the BCRA’s onerous restrictions on election-year lobbying of Congress in its 5-4 McConnell v. Federal Election Commission decision.
However, free-speech advocates, including the Committee, didn’t give up.
They kept fighting, and ultimately they persuaded the High Court to hear Citizens United v. Federal Election Commission, another sweeping challenge of the BCRA. The Committee itself submitted a brief in support of this suit.
And four years ago this month, the High Court voted 5-4 in Citizens United to reverse McConnell on key points, finally holding that Congress cannot constitutionally pick and choose who may speak about political candidates and issues, and who must be silent.
The majority opinion also dealt a stern rebuke to federal bureaucrats who for decades have contended that single-issue lobbies like the Committee are prohibited from spending their voluntary contributions on an array of public communications.
New IRS Regulation Applies Only to Single-Issue Lobbying Groups Like the Committee
Of course, top union bosses and their puppet politicians have never accepted the Supreme Court’s determination that Right to Work and other independent groups that disagree with Big Labor have a First Amendment right to mobilize supporters and lobby elected officials to advance their deeply-held principles.
Instead, since 2010 union-label politicians, acting at Big Labor’s behest, have tried again and again to circumvent Citizens United.
The latest, and the most dangerous yet, attempt to relaunch and expand upon the BCRA’s assault on First Amendment protections for nonprofit lobbying groups incorporated under the guidelines of Sec. 501(c)(4) of the federal tax code was announced by President Obama’s Treasury Department just before Thanksgiving.
Because the primary function of such groups is to lobby elected officials and candidates on matters of public policy, supporters cannot deduct from their income taxes contributions to 501(c)(4)’s like the Committee. At the same time, because 501(c)(4)’s never make a profit and don’t contribute any money to political candidates or advocate the election or defeat of any candidates, they are exempt from federal income taxes.
The Obama Treasury Department and IRS would change all that by redefining mobilization of like-minded citizens to contact their elected officials on public-policy issues, that is, the core function of groups like the Committee, as taxable “political activity.”
“If it is allowed to stand, the effect of the proposed IRS 501(c)(4) rule on the Committee would be to divert a huge share of members’ donated funds, money on which they’ve already paid income taxes, into federal tax coffers,” charged National Right to Work Committee Vice President Matthew Leen.
“This would of course seriously impair the Committee’s efforts to protect the Right to Work. Many smaller groups would very likely be put out of business altogether.”
Obama Bureaucrats: When Big Labor Gets Out the Vote, It Isn’t ‘Political’
Mr. Leen continued: “The 501(c)(4) proposal would represent an outrageous violation of the First Amendment even if it were applied evenhandedly. But, not surprisingly given the source, the proposal is anything but evenhanded.
“As the LM-2 disclosure forms unions themselves file with the U.S. Labor Department show, union bosses are the biggest spenders of all in politics.
“Yet Big Labor’s political machine, estimated to spend nearly a billion dollars a year on politics and lobbying, will remain almost entirely tax-exempt.
“According to the Obama IRS, get-out-the-vote drives financed by workers’ forced dues and fees and conducted by unions, which are established under Sec. 501(c)(5) of the tax code, aren’t ‘political.’ But get-out-the-vote efforts sponsored by 501(c)(4)’s are political!
“The IRS’s outrageous scheme must be stopped, and the Committee will stop it — in Congress, or in the courts.”