Open Season on the Tea Party

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  • Will Obama's new IRS rules make targeting Tea Party legal?

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In the 2010 midterm elections, the tea party delivered the president its famous "shellacking." Riding a wave of discontent over his health care law and out-of-control spending the movement took back control of the House of Representatives. In the 2012 presidential election, the movement's impact seemed more subdued, and President Obama won re-election.

One of the reasons why this may have happened became widely known only after the election: the IRS had singled out tea party and other conservative groups for special treatment when they applied for tax-exempt status, leading to costly delays and the elimination of part of the Republican Party's ground game. After initial claims that low-level employees in the IRS' Cincinnati office had been solely responsible for this targeting were shown to be false, two acting commissioners of the IRS, Steven Miller and Danny Werfel, and the head of its section on tax-exempt organizations, Lois Lerner, were forced to resign. In the aftermath of the revelations, President Obama referred to the IRS' activities as "outrageous," claimed that had been unaware, and called for accountability, "so that such conduct never happens again."

That was then. This Tuesday, the administration decided that instead of making sure the 2014 midterm elections will not be tainted by similar restrictions on the activities of 501(c)4 organizations, it was going to legalize and institutionalize the IRS' practices. I guess that's one way to do it. British comedian Harry Enfield first suggested this strategy in a skit about police officers in Amsterdam, a city well known for its lax attitude toward the consumption, possession and sale of soft drugs. In the skit, one of the Dutch policy officers explains that burglary used to be a major problem in Amsterdam, but then it was legalized, and the problem was solved.

That was arguably funny. The IRS' actions, of course, were deeply frustrating to the conservative activists involved, and went to the heart of people's trust in government and electoral competition. The tea party movement had, after all, had a major impact on an election just a few months before it became subject to the tax service's targeting.

In an article in the current issue of the Quarterly Journal of Economics, my coauthors Andreas Madestam (Stockholm University), Daniel Shoag and David Yanagizawa-Drott (both of the Harvard Kennedy School) and I explore just how big this impact was. Our estimates suggest that the tea party movement brought Republican candidates as many as 3 to 6 million votes in the 2010 elections for the House of Representatives, of a total of fewer than 45 million.

In other words, the movement's impact was massive. Reducing such a massive influx of votes even by just a fraction could still have a material impact on the outcome of House races all around the country in 2014. Let us hope that that is not the administration's intention.

Stan Veuger is an economist at the American Enterprise Institute.

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About the Author

 

Stan
Veuger

  • Stan Veuger is a resident scholar at AEI.  His academic research focuses on political economy, and has been published in The Quarterly Journal of Economics. He writes frequently for popular audiences on a variety of topics, including health and tax policy. He is a regular contributor to The Hill, The National Interest, U.S. News & World Report, and AEIdeas, AEI’s policy blog. Before joining AEI, Dr. Veuger was a teaching fellow at Harvard University and Universitat Pompeu Fabra. He is a board member of the Netherland-American Foundation in Washington and at The Bulwark, a quarterly public policy journal, and was a National Review Institute Washington Fellow. He is a graduate of Utrecht University and Erasmus University Rotterdam, and holds an M.Sc. in Economics from Universitat Pompeu Fabra, as well as A.M. and Ph.D. degrees, also in Economics, from Harvard University. His academic research website can be found here.


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