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Dean Obeidallah

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Super Tax the Super PACs

Posted: 07/01/2012 3:19 pm

The rich and powerful just got more powerful and most likely richer.

While all eyes have been focused on the Supreme Court's health care ruling, the Court quietly released a decision last Monday that could impact even more Americans.

The Supreme Court had a chance with this new case to reverse its infamous 2010 Citizens United decision and allow the government to impose corporate restrictions on contributions to Super PACs. By way of brief background, the Citizens United ruling -- together with a federal appeals court's decision in Speechnow.org vs. FEC -- gave birth to the monstrosity known as Super PACs. And worse yet, these rulings ended restrictions on the amount of money corporations, unions and wealthy individuals could give to Super PACs.

But instead, the Court struck down Montana's Corrupt Practices Act -- a law enacted in 1912 to end the corruption caused by the "copper kings" -- the big mining companies -- which were essentially buying politicians with large donations and bribes. Thus, this Montana law banned corporate donations to political organizations.

Who could oppose guarding our political system from corruption? Well, at least the five Justices who voted to strike the Montana law down. (Anyone surprised that these five Justices were all appointed by Republican presidents?)

There are currently 640 Super PACs and, in 2012 alone, they have raised over $240 million -- and counting.. In this year's election cycle, millions of dollars are being thrown around like a drunk stock broker "making it rain" by tossing fifty dollar bills at strippers in a high-end strip club.

Lets be honest: How can a politician supported by millions from a wealthy individual or corporation ever say "no" when asked by them to vote a certain way or take a position on an issue? Then you are among the 77 percent of Americans who believe politicians will stand with the big money contributors over the public interest. Our politicians are for up for sale just like the crooked "Nucky Thompson" on HBO's Boardwalk Empire.

Where is this heading? Can you say: "Citizens-gate"? (Okay, I'm not sure of what we will actually call the scandal, but it will likely bear the suffix "gate.") Almost 70 percent of Americans agree with me that the obscene amount of dollars being thrown around at and by Super PACs will lead to corruption. And Senator John McCain echoed this dire prognosis just last week when discussing the Citizens United decision: "I think there will be scandals as associated with the worst decision of the Supreme Court in the 21st century."

What's astounding is that opposition to Super PACs is one of the few things that unite people from both political parties. Indeed, a recent Washington Post-ABC News poll found that 69 percent of Americans want Super PACs to be illegal.

The rise of Super PACs is also resulting in a very alarming consequence: Polls indicate that 65 percent of Americans now trust the government less because big donors have more influence than the average voter. And worse, 26 percent percent of Americans now say they are less likely to vote because of Super PACs. That number will undoubtedly increase as more Americans feel that that our political system is being controlled by the wealthy and big corporations.

The stakes are clear: The Super PACs are a threat to our democracy. I'd say a "clear and present" danger but I don't want to be overly melodramatic -- but it's truly close to that.

The question is what can be done? We have few options:

1. Amend the U.S. Constitution to impose limits on these types of contributions. This could work but would take years;

2. Stop paying the Supreme Court Justices until they reverse their decision. Okay, I'm kidding with this one but I bet it would work; or

3. The most immediate and practical solution is Congress imposing a tax on the Super PACs. And not just any tax, but a Super tax.

Did you know that Super PACs don't pay taxes on the contributions they receive? Unbelievable, isn't it? These Super PACs are no doubt businesses but the contributions are not taxable because they are considered "gifts" under federal tax law. C'mon, a gift is a bouquet of flowers or a tie, not $2 million with the hope of changing public policy to help your corporation or personal investments.

The contributions to Super PACS should be deemed income. The money is given for a service, namely that the Super PAC will use the funds to lobby the American people on behalf of the donor. And for contributions over the current limit an individual can contribute to a federal political candidate -- $2,500 -- I propose a fifty percent flat tax be imposed which doesn't allow deductions.

The funds raised from this "super tax" can be used to reduce the deficit or to increase the amount presidential candidates are offered for public financing.

At some point there will again be limits imposed on contributions by wealthy individuals and corporations -- the question is do we first need another "Watergate" type scandal to make that happen?

 

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