Idea: How to neuter SuperPACs

by Alan Cohen

Sheldon Adelson, AP photo

See that evil-looking guy up there? That’s Sheldon Adelson, a right-wing casino mogul. He donated $70 million to various Republican campaign efforts in the 2012 season. In a fit of brilliance, he donated $20 million to Newt Gingrich. (How’d that work out for ya…?) The rest went to pro-Romney or anti-Obama SuperPACs. SuperPACs are organizations that, as a result of the 2010 US Supreme Court ruling Citizens United, are allowed to spend unlimited amounts of money on political advocacy without declaring their donors. So, according to current US law, someone like Adelson can donate $20 million to support a candidate, either openly or in secret. Then, when Adelson needs a favor to help his business interests… Well, you do the math.

Of course, after the results of this year’s US elections, it seems the SuperPACs had a bark worse than their bite. Many observers were suggesting that the flood of cash would favor Republicans; nonetheless, Obama was re-elected and the Democrats gained seats in both the Senate and the House. Some people think that this means SuperPACs are not so bad. I disagree; Eric Posner lays out a bunch of reasons why we should still be wary of them. Fundamentally, it is a problem for democracy when (a) rich people have disproportionate power to influence the outcomes of elections and (b) there is no legal way to limit either corruption or the appearance of corruption in politics. (The rationale behind the Citizens United decision is that free speech trumps these arguments, and that there is essentially no way to limit campaign spending without telling people they don’t have a right to spend their money to express their opinions.)

Citizens United thus seems to be an insurmountable barrier to any way to limit corruption and a disproportionate influence for the rich. If all political spending is protected as free speech, it seems nearly impossible to craft a law or regulations that would effectively limit the power of money in elections. So, here is an idea for how to get around this: Impose a progressive tax on political contributions.

Here’s how it would work. Small donations (under $100 within a year, say) would be tax deductible. Medium donations (up to $500) would be tax free. But anyone (or any corporation) who contributed more than $500 would pay a tax on the contribution. This tax would become steeper and steeper as the contribution increased, much like income tax brackets. For example, between $500 and $2000 the rate might be 15%; from $2000 to $10,000 the rate might be 50%, from $10,000 to $100,000 75%, and over $100,000 90%.

These are very high tax rates, and that is the point. If I want to give $1 million to a campaign, this system would force me to pony up nearly $10 million – $9 million would be taken as the 90% tax. Fewer rich people would feel it was worth their while to pay so much for so little in return, and total contributions to SuperPACs would plummet. No one would place any limit on how much speech anyone could buy – maybe someone would still be willing to contribute $70 million via a donation of $700 million. The US constitution clearly gives congress the right to impose taxes.

What about the argument that by taxing speech we are effectively limiting it? Well, that would be inconsistent with the principles of Citizens United, which effectively says that speech is for those who can afford it, and if you’re not rich enough, too bad – it’s not the government’s business to be worrying about who has access to speech in the real world, as long as the government is not imposing limits on what might happen. Under the proposed taxes-on-contributions plan, all that’s happened is that one has to be even richer to be able to have access to the same amount of speech as before. But if it’s not the government’s business to assure equal access to speech for all, why should this matter?

There is no way this plan could become law immediately – not with Republicans controlling the House of Representatives. But it could become law eventually, under the right political circumstances. A Democratic congress and president would probably approve it, and it is hard to see how it could be challenged in court if it is carefully constructed.

And what would be done with the money that is raised from this tax? I’d propose using it to invest in running better elections. More polling stations, more polling workers, and better technology. (I’ve previously described how we might design an electronic voting system with a paper trail that would be essentially impossible to hack.)

I am not a lawyer, and perhaps there are details of the Citizens United decision or other legal precedents that would make this idea less than feasible. If so, I’d love to hear about them. Please let me know if you think this might work. If you do, forward it to any lawyers you know and let’s see if we can make it happen!