This Week: IRS Propaganda


There’s a lot of news lately about Russian propaganda.  While it seems likely that such a thing does exist, I’ve long been more worried about the kind of propaganda that is baked into our own information systems.  The punditocracy is up in arms about Russia’s efforts “to exploit America’s racial and religious divisions,” as the Washington Post and many others see it—as if these issues were not divisive until Russia took out some ads on Facebook!

This issue of the Notes examines one small example of how propaganda creeps into our media system as a result of the various forces at work in an increasingly freaked-out social order such as we have in the United States of the 21st Century.  This little example is doubly timely, as it not only illustrates how home-grown propaganda works, but it’s also about the Internal Revenue Service.  Just as the reactionary Right gears up to pass “the largest tax cut in our county’s history” (per Mr. Trump). Coincidence?  Probably not.  Timing is also a facet of propaganda worth considering.

I hope this issue doesn’t tax you too much! Ha Ha.


“Quote” of the Week: “To write smartly and critically on race, you must read.”

In their Fall 2017 issue, the Columbia Journalism Review ran a short article by reporter Collier Meyerson that offered advice to her fellow journalists about the importance of race consciousness for all reporters.  Headlined, “Covering a Country Where Race Is Everywhere,” the article included the following words:

“To write smartly and critically on race, you must read. Read books about America’s history that are not the books you read in high school. Read the work of your peers who write on race. To get sources to open up to you, sources who have been traumatized by a country that has called them ‘alien’ or ‘lazy,’ convey to them that you are trying your best to tell their stories honestly and compassionately. To do that accurately, you need to study America’s history.

“Sometimes getting the right source to open up takes time. If you’re writing for a digital outlet that expects a quick turnaround, push back on your editors. Tell your editors the story requires trust building, and that it will be better for the extra time.

“Rhetoric is powerful. In 2008, it was used as a force of optimistic “hope and change.” Now it has taken a dark turn. The language used by Trump is emboldening white nationalists and strengthening what used to be a white supremacist fringe. As journalists, it is imperative that we poke holes in that rhetoric, which can be found in everything we report on. Race and racism are everywhere, and in everything. We are the product of a violent history that privileges one race over all others. And in order to tell that truth, we must look for it everywhere.”

The Narrative of a Rogue IRS

On October 27th, on page 3 of my local newspaper the Star Tribune of Minneapolis, I saw the following headline above a story by the Associated Press: “Tea Party Gets IRS Apology, Payment.”  My thoughts immediately turned (like the thoughts of everyone else, I imagine) to Nygaard Notes Number 554, of May 19, 2014, when I last discussed the Internal Revenue Service—the nation’s tax-collection agency—making an apology to the Tea Party and other “conservative” groups.

The Associated Press article to which I’m referring began like this: “The Trump administration has agreed to what a lawyer described as a ‘very substantial’ payout to hundreds of Tea Party groups to settle a class-action lawsuit over the extra, often burdensome IRS scrutiny they received when applying for tax-exempt status during the 2012 election.  Republicans were outraged in 2013 when the IRS admitted the targeting, in part by zeroing in on groups with words such as ‘tea party’ or ‘patriot’ in their names.”

My question is: Upon which groups did the IRS “zero in”? Well, the article reports that the apology comes as a result of a class-action suit that was filed on behalf of “more than 400 groups” that “were singled out based on their political views.”  And the groups, we’re told, were “Tea party and other conservative groups.”

The AP reports that “Republicans were outraged in 2013” by “an inspector general’s report” which found that the IRS “delayed for months and years” the applications for tax-exempt status on the part of these “conservative groups”.

Is there another side to this story?  Well, the article reports that “The Obama Justice Department announced in 2015 that no one at the IRS would be prosecuted. It said investigators found mismanagement but no evidence that the tax agency had targeted a political group based on its viewpoints or obstructed justice.”  In light of last month’s apology and “very substantial” payment to the Tea Party et al, this certainly appears to be another example of the grossly unfair partisanship of the Obama years.  That is, it appears that way until we look at the facts of the case.  Time for some history.

The Scandal of 2013

This story more or less begins in May of 2013, six months after the re-election of Barack Obama.  The national media very widely and loudly covered what came to be known as “the IRS targeting scandal”.  Here are a few examples from the period:

Washington Post May 12 2013: “Criminal Probe of IRS Launched.” The lead paragraph: “Federal authorities have opened a criminal investigation of whether Internal Revenue Service employees broke the law when they targeted conservative groups seeking tax-exempt status—the latest setback for an agency that is the subject of withering bipartisan criticism and multiple congressional inquiries.”

The Washington-based news website “The Hill” reported that “the scandal surrounding its [the IRS’s] admission of singling out Tea Party groups for extra scrutiny deepened” on May 14th.  Here’s the Associated Press on May 15: “Justice Investigating IRS Targeting of Tea Party.”  CNN said on May 17th that “Democrats [in Congress] also expressed outrage at the targeting of conservative groups seeking tax-exempt status.”  My favorite headline was on the front page of USA Today on May 15th: “IRS Gave a Pass to Liberals; Tea Party Groups Mired in Red Tape as Liberal Groups Easily Got Tax-exempt Status” There were literally hundreds of other stories about the “scandal” or “controversy” during May and June of 2013.

So the media consensus was clear: There’s bipartisan agreement that an out-of-control IRS was using tax law to impede the legitimate activities of conservative groups.  What an outrage!  And it would be an outrage.  If it were true.

It didn’t take long for a counter-story to emerge. About five weeks, in fact.  Many outlets echoed this reporting from the New York Times on June 25th 2013: “The instructions that Internal Revenue Service officials used to look for applicants seeking tax-exempt status with ‘Tea Party’ and ‘Patriots’ in their titles also included groups whose names included the words ‘Progressive’ and ‘Occupy,’ according to I.R.S. documents released Monday.  The documents appeared to back up contentions by I.R.S. officials and some Democrats that the agency did not intend to single out conservative groups for special scrutiny. Instead, the documents say, officials were trying to use ‘key word’ shortcuts to find overtly political organizations—both liberal and conservative—that were after tax favors by saying they were social welfare organizations.”

Maybe this is why “The Obama Justice Department announced in 2015 that no one at the IRS would be prosecuted.”

And here I’ll quote the Farmers Independent of Bagley, Minnesota (population 1,400!) explaining why it’s important for the IRS to investigate both conservative and liberal groups when they apply for tax-exempt status: “The law clearly states that only organizations devoted to ‘social welfare’ can receive a coveted tax exemption because we taxpayers should not be subsidizing any purely political groups on the right or left. IRS officials were merely trying to enforce the law, perhaps clumsily, when faced with a flood of new political organizations filing for tax-exempt status after the Supreme Court’s Citizens United decision in January 2010.”

So we can see that this story of the “scandal” of partisan abuse by an out-of-control Revenue service was widely debunked within a few weeks of the breaking of the story.  About a year later Nygaard Notes got into the act (Issue 554, May 19, 2014), when I wrote about a fairly significant report put out on April 23rd of that year by the group ThinkProgress.  Headlined “New Records: IRS Targeted Progressive Groups More Extensively Than Tea Party,” the story noted that “A series of IRS documents, provided to ThinkProgress under the Freedom of Information Act, appears to contradict the claims by Rep. Darrell Issa (R-CA) and his House Oversight and Government Reform Committee that only Tea Party organizations applying for tax-exempt status ‘received systematic scrutiny because of their political beliefs.’ The 22 ‘Be On the Look Out’ keywords lists, distributed to staff reviewing applications between August 12, 2010 and April 19, 2013, included more explicit references to progressive groups, ACORN successors, and medical marijuana organizations than to Tea Party entities.”

I know what you’re thinking: Any source called “ThinkProgress” is probably biased against anything conservative.  So that doesn’t prove anything!  But the story doesn’t end in 2014.

Moving Up to The Present

It turns out that the IRS is overseen by an outside auditor, the office of which is known as the Treasury Inspector General for Tax Administration, or TIGTA.  And TIGTA put out a report just about exactly one month before the IRS apologized to all of these conservative groups for targeting them.  That report was released to members of Congress on September 28th, 2017, and to the general public one week later.  It’s 122 pages long and nearly unreadable, so I’ll now quote extensively from an article by the Washington Post’s Paul Farhi, which appeared only in the online edition of the Post (oddly, in the ‘Style’ section).  The lengthy headline read, “Four Years Later, the IRS Tea Party Scandal Looks Very Different. It May Not Even Be a Scandal.”

After summarizing the charges brought by the “conservative” groups in relation to the 2013 “scandal,” Farhi said:

“The allegations formed one of the best-known scandals of former president Barack Obama’s administration and led to months of congressional hearings, official investigations and damning news coverage.  Now, it seems, it wasn’t so simple.

“A report released last week by the Treasury Department’s inspector general for tax matters [TIGTA] indicates the IRS also scrutinized nearly 150 organizations whose names suggested they were affiliated with liberal organizations.

“Without specifically characterizing the politics of the groups, the report said the IRS initiated reviews when applicants’ names included words such as ‘occupy,’ ‘progressive’ and ‘green energy’ between 2004 and 2013.

“The new [TIGTA] finding suggests Republicans and the media provided an incomplete or even misleading account of what the IRS was up to when it was reviewing political organizations that sought tax-exempt status. While not of the order of the news media’s credulous—and flawed—reporting about supposed weapons of mass destruction in Iraq before the U.S. invasion in 2003, the report offers a check on the prevailing narrative of the time.”

Farhi’s article quoted a former Obama spokesperson, Eric Schultz, who notes that the TIGTA “report substantiates our argument that our White House did not politicize the IRS, but those allegations, A1 material at the time, have lived online for four years and now that the public has moved on, they’re proven false.’”

Yet, one month later we read reports of the IRS apologizing, and making a ‘very substantial’ payment to conservative groups for singling them out and delaying their applications for political reasons.  So, even if the public has “moved on,” apparently the media has not.

I’ve been heard to say that “Once you know something, you can’t not know it.”  It’s bad grammar, but you get the point.  Yet, somehow, despite counter-reports that emerged shortly after the “scandal” broke in 2013, and the ThinkProgress counter-report in 2014, and the very recent report by the Treasury Inspector General for Tax Administration, we STILL read media reports—lots of them—reporting the story as one of the IRS “targeting Tea Party and other conservative groups.”

The ongoing misinterpretation of this non-scandal is a testimony both to the money behind these “conservative” groups (which allows them to pursue such costly litigation), and to the power of the right-wing media “echo chamber” that can amplify a genuine example of “fake news” into a story line that is widely accepted as true.

I am making a big deal out of this story because I think it illustrates how the daily news cycle—by virtue of the fact that it simultaneously reflects and shapes public thinking—reinforces the two great principles of USAmerican philosophy.  Those two pillars are Individualism and Competition.  The following essay will attempt to explain how this works.

Winners, Losers, and Media Propaganda

The reporting on the current Republican effort to “reform” the tax code reinforces an Individualistic and Competitive worldview in three important ways.  The first way is by basing most reports on the Individualistic “winners and losers” angle.  The second way is that journalists almost invariably talk about taxes as a one-way proposition, as if people pay taxes and nothing ever comes back to them as a result.  And the third way, related to the second, is to start from the assumption that everyone wants to pay less in taxes.  Let’s look at each problem, in reverse order.

Who Doesn’t Want a Tax Cut?

The answer to this question is… It depends.

A New York Times article of November 2nd reported on a two-day trip at the end of October led by Bernie Sanders which aimed to educate USAmericans about the Canadian healthcare system.  Headlined “What Did Bernie Sanders Learn in His Weekend in Canada?”, the Times reported that one of the things he learned was that “Canadians seem to value fairness more than Americans do.”  (Leave aside for the moment the absurdity of comparing a group of 36 million people with a group of 350 million people.)  Said the Times, “Throughout the weekend, Mr. Sanders kept asking Canadians what they thought about the higher taxes they’d paid to finance their system. Every one among the patients and doctors selected to meet him said the trade-off was worth it because it made the system fair.”

Despite the implication that this pro-tax view is held only by those “selected” to support the Sanders agenda, Canada’s leading newspaper, the Toronto Globe and Mail, reported just after the 2016 US election that “Americans have elected a president who calls Canadian health care ‘catastrophic’ but a new poll suggests a majority of people in this country want the public system expanded and that they are willing to pay more taxes to make that happen.”

And, as for that part about “Canadians” putting a higher value on fairness than USAmericans, that’s debatable as well.  An ABC News/Washington Post survey from this past July asked respondents, “which of these do you think is more important for the federal government to do: provide health care coverage for low-income Americans, or cut taxes?”  63 percent said “Provide health care.”  27 percent said “Cut taxes.”

In these very pages (Nygaard Notes #529, April 23, 2013) I wrote about a 2013 survey by the National Academy of Social Insurance, which reported, “82% agree it is critical to preserve Social Security for future generations even if it means increasing Social Security taxes paid by working Americans, and 87% want to preserve Social Security for future generations even if it means increasing taxes paid by wealthier Americans.”

The typical reporting in the daily news stream starts from the Individualistic and Competitive assumptions that tax policy is best understood as a competition between individuals to see who can get away with paying the least.  These polls provide evidence that—despite the constant barrage of de facto Individualistic propaganda—USAmericans often go beyond the Individualistic and Competitive “What’s in it for me?” way of thinking in favor of the Social and Cooperative emphasis on “How can I help make life better for all of us?”

Pay Taxes, Get Something in Return

Here’s a remark I published back in Nygaard Notes #189, January 24, 2003 (“The Two Types of Government”): “A little-known secret in this country is that we have more than just one government.  In fact, we have two, which might be called a Business Government and a Popular Government.  ‘The’ government in the United States is mostly a Business Government, but not entirely.  The tension between the two is what is often referred to as ‘class warfare.’”

I won’t go over all of that ground here, but my point was that the Popular Government is the one that responds to the demands of the majority by producing programs and policies like Social Security, workers’ compensation, Medicaid, Medicare, and public transit, among many others that serve the common good.  A Popular Government emerges from a Social and Cooperative philosophy, in which government is seen as a means to enable people to work together for the benefit of all.

The role of the Business Government, on the other hand, is to protect the power and wealth of the few who hold most of the power and wealth by A) Staying out of the way of the functioning of the so-called Free Market, and B) Keeping workers and other non-wealthy people from interfering with the functioning of the Free Market.  (It’s not really a Free Market that’s at the center of this, but that is the term used to sell the agenda favored by the wealthy who benefit from the workings of the Market, “free” or not.)  The driving philosophy of a Business Government is an Individualistic and Competitive one.

I’m not sure many people walking down the street could articulate this, but I think most people do understand that some of the taxes we pay are used to do things that we can’t do on our own, but that are important to our well-being.  None but the wealthiest among us could afford even a short stay in a nursing facility, for example.  But, by pooling our resources through taxation we can set up a fund (mostly Medicaid) which can be used to pay for the long-term care that many of us will one day need.  FEMA, the Federal Emergency Management Agency, is another example of tax money used to support those who need it, paid for by every taxpayer whether they need it or not.

A Gallup poll in April of this year asked USAmericans, “Do you regard the income tax which you will have to pay this year as fair?”  Many will be surprised to learn that 61 percent of respondents think the income tax they have to pay is indeed fair, while only 35 percent think it is not.  (The same poll found that 82 percent of USAmericans think that “lower-income people” are paying “their fair share” or “too much” in taxes, while 67 percent think that “corporations” are paying “too little.”)

Maybe we’re not so different from Canadians after all.

We must ask ourselves: What is it that people must believe if they think that the taxes levied on them are fair?  The answer: They must believe that the taxes are to be used for something useful.

And they do seem to think so, judging by levels of public support for increased spending on many tax-funded government programs and initiatives.  The Pew Research Center earlier this year reported that “majorities in both political parties said they favored maintaining or increasing spending in nearly all of the 14 specific budget areas that respondents were asked about.”  This includes health care in general, anti-terrorism spending, Veterans’ benefits, the State Department, transit infrastructure, anti-poverty spending, support for the unemployed, environmental protection, education, and even military spending (astronomical though it is).

By reporting on tax reform as if individual spending decisions are always better than decisions to contribute to the common good, media reinforces the Individualistic and Competitive philosophy that strengthens the Business Government at the expense of the Popular Government.

Individualism and Taxes

Most of the reporting on the Republican plan for tax reform that we see in the daily media focuses on who will pay more and who will pay less in taxes.  Looking closely at this pattern can help us to understand how the philosophy of Individualism shapes our thinking.

People who pay less in taxes are reported as winners.  People who pay more are losers.  This perspective is so common that it likely doesn’t seem like a “perspective” at all to most people.  Yet it almost completely individualizes the issue, as if one dollar spent by Citizen A out of her own pocket is good for Citizen A, while that same dollar, if paid in taxes, is bad for Citizen A.  But, as we’ve just seen, most people don’t see it like this.

Taxation is a form of collective action.  This is fundamentally why those who identify with the prevailing power centers in the United States hate taxation so much.  In a society in which wealth means power, the only power held by low-wealth people is the power that comes from pooling their wealth.  One way to do that is through taxation.

Most people understand that there are things that can be done by united effort that can’t be done—or at least can’t be easily done—by individual effort or by relying on The Market.

There’s another way that this Individualistic thinking confuses the issue.  As long as we are focusing on the individual winner/loser dynamic, we are not thinking about the larger implications of a “tax cuts for everyone” approach.  That is, we’re not thinking about institutions,  the workings of which shape our lives in so many ways.  We’re not thinking Systems.

In the year 2017 we find ourselves the latter stages of Capitalism, a time in which capital is accumulating in the hands of smaller and smaller numbers of entities with greater and greater power.  Those entities are the multinational corporations and the wealthy few—the so-called One Percent—who carry out the corporate imperatives.  And in an era like the current one, there is really only one institution that has even a prayer of standing in the way of the One Percent.  And that is Government.  And, really, I’m talking about the federal government, as the power wielded by any smaller unit of government (state, county, municipal) is not enough to affect the Googles and ExxonMobils of the world.  Which, by the way, is a big part of the reason why it’s still possible to elect non-corporate candidates at the lower levels: Big Capital isn’t too worried about these relatively-toothless entities.

There are two things that give government the power to stand up to Capital.  One is popular support.  For example, a September Quinnipiac poll shows that 63 percent of USAmericans “think more needs to be done to address climate change.”  So, let’s assume for a moment that the federal government were inclined to pursue policies in tune with the wishes of the majority (difficult to imagine, I know).  What, besides popular support, would the federal government need in order to do the right thing?  It would need resources.  That is, it would need money.  Money to hire inspectors, money to pay people to enforce environmental laws, money to clean up polluted areas, money to respond to citizen demands for climate action, money to subsidize green technology, money to pay for the re-training and re-employment of people currently working in the coal and other carbon-based industries.  And so forth.

And here we begin to see the Big Picture that is obscured by the Individualistic focus on who will get a tax break.  The big picture is the strategy of permanently de-funding the federal government so that, even if we were to elect a legislature and President who might be inclined to take serious action to act in the public interest, such a government would be too weak to do anything.  Elected representatives, after all, may decide to attempt to counter the profit-seeking environmental suicide dictated by The Market, or they might be willing to deconstruct the Carceral State, or they might want to expand rather than suppress voting. But, so what?  Without a solid tax base, the economic power of the Fortune 500 would easily overwhelm any such public initiatives.

De-funding government can be accomplished in three ways.  The first is legislative action, as with the current effort to “reform” the tax system.  Tax cuts for everyone!  The second way is more insidious, and that is to delegitimize the tax collection agency.  The creation of the bogus “IRS targeting scandal” that I described earlier is a tactic that is a part of this strategy.

The third way of defunding the government—that is, the third way of reducing the capacity for united democratic action—is to delegitimize the very idea of a society deciding to tax its members for any purpose.  As illustration, here is how the Libertarian Party articulates the Individualistic thinking about taxes:  “The Libertarian Party is fundamentally opposed to the use of force to coerce people into doing anything. We think it is inherently wrong and should have no role in a civilized society. Thus we think that government forcing people to pay taxes is inherently wrong.”

I’m less concerned with Russian propaganda than I am with the Propaganda Effect that results from the unconscious use of the dominant ideology that routinely corrupts our intellectual culture. The good news is that, with a little work, it is possible to step off the propaganda path.  It starts with being aware that there is such a path, and that we are all on it most of the time.  This issue of Nygaard Notes aims to pull back the curtain just for a moment.  More good news: It gets easier the more we do it.