Your dollars are subsidizing white supremacy through tax exemptions

What's the difference between UCLA and the KKK? Or a neo-Nazi and a Girl Scout? These are not setups for jokes. They are questions the House Ways and Means Oversight Subcommittee recently spent 2½ hours trying to answer. This is because many white supremacist groups enjoy the same tax-exempt status as public universities, churches and other charities — simply by claiming to be educational.

For instance, the New Century Foundation, a self-styled think tank, publishes a racist magazine rife with dire warnings such as "a European population cannot survive in a multiracial society" and "when blacks are left entirely to their own devices, Western civilization — any kind of civilization — disappears." By persuading the Internal Revenue Service that such drivel is educational, it is legally considered a charity, it didn't have to pay federal taxes on the nearly half-million dollars of revenue it reported in 2017, and its donors enjoyed federal and state (including California) income tax deductions on their contributions.

That's only one example of many. As Rep. Judy Chu, D-Calif., pointed out in the subcommittee hearing, at least 60 hate groups are registered as charities.

In what world are white supremacists considered educational and therefore charitable? This is not just an academic issue. We now know that white supremacist theories inspire mass shooter after mass shooter. Rep. Linda T. Sanchez, D-Calif., did not exaggerate at the hearing when she said that "people have lost their lives because of the vile hatred that is spewed by these groups."

In the last year alone, this was certainly true at the Tree of Life synagogue in Pittsburgh, the Garlic Festival in Gilroy, Calif., and the Walmart in El Paso, Texas. Total number of people killed by domestic terrorists in these three tragedies: 36.

So again, why does our tax code subsidize white supremacy? The answer is depressingly banal: The IRS, the agency charged with policing the charitable sector, does not have the resources to review charitable status applications or regulate the activities of charities. Over the last two decades, systematic underfunding of the IRS has reduced the staff in its exempt organizations division by almost 40%.

Before it was eviscerated, the IRS actively policed white supremacist groups trying to pass as charities. In 1983, the IRS denied tax-exempt status for a racist and anti-Semitic group called the National Alliance. The same year, the IRS revoked Bob Jones University's tax-exempt status because it prohibited interracial dating. But today, the IRS no longer has the resources to conduct such investigations.

The second step is to make sure the IRS has the political support to take on these well-funded white supremacist groups. There has been some movement on this front. In January, the House passed a resolution called "Rejecting White Nationalism and White Supremacy" by a vote of 424 to 1 (Rep. Bobby Rush, a Democrat from Illinois, voted against it, saying it "did not go far enough"). In 2017, in response to the murder of Heather Heyer, who was killed when a white supremacist drove his car into a crowd of peaceful demonstrators in Charlottesville, Va., President Donald Trump signed a joint resolution denouncing "white nationalists, white supremacists, the Ku Klux Klan, neo-Nazis and other hate groups."

Although these resolutions were largely symbolic, they suggest IRS action against white supremacists would have bipartisan support.

Some policymakers are skeptical of taking aggressive action against white supremacist charities. As Rep. Kevin Brady, R-Texas, emphasized at the hearing, the First Amendment "not only applies to speech we agree with, but it also applies to speech we despise."

But while the First Amendment promises that the government will not restrict speech, it does not promise anyone a tax subsidy.

If the IRS refuses charitable status because a group is not educational, without reference to the content of the group's speech, the First Amendment is not an issue.

Rooting out white supremacists disguised as charities would not put an end to hate crimes or mass shootings. But it could help, and our government would no longer be in the business of legitimizing hate groups and subsidizing white supremacy.