26 November 2013

Sounds Good, but I do not Expect Anything Meaningful to Come of This

We've seen this before.

The White House puts out a potentially significant rule, or rule change, and the right wing noise machine cranks up, and they back off.

This is why I'm dubious that their place greater restrictions on tax-exempt political groups will amount to much:
The Obama administration proposed new rules on Tuesday to rein in tax-exempt groups that have transformed the U.S. political landscape in recent years by harnessing hundreds of millions of dollars in anonymous donations to influence elections.

The proposal would alter definitions in the tax code that allow limited campaign and fundraising activities by the tax-exempt groups, some of which have been at the center of allegations that the Internal Revenue Service targeted conservative Tea Party groups for extra scrutiny.

These tax-exempt "social welfare" groups, organized under section 501(c)(4) of the tax code, mushroomed after a 2010 U.S. Supreme Court ruling that relaxed campaign finance rules. Part of their appeal is that the groups do not have to disclose the identities of their donors as long as they spend less than half their time and money on political activities.

Critics say the relaxed rules have opened the door to the abuse of campaign finance rules meant to curb the influence of wealthy donors in U.S. politics.


U.S. government officials have struggled for years to determine what qualifies as political activity. The proposed rules would more clearly define "candidate-related political activity" and also ask for public comment about how much political spending these groups should be allowed to do. The proposed rules introduce several bright-line tests that would determine when a 501(c)(4) is doing too much campaign activity and is violating its tax-exempt status.

Among these new definitions, advertising that names a candidate 60 days before a general election would count as political activity. Certain contributions that can now be made anonymously by these groups may need to be reported. Any "voter guides" that refer to a candidate would be considered political activity.

Also, any event within 60 days of a general election at which a candidate appears as part of the program would be a political event.

"This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by social welfare organizations," Mark Mazur, Treasury assistant secretary for tax policy, said in a statement.
If they implement this, it would be good first step, but I expect it to be watered down beyond recognition.


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