Johnson Amendment

About a month ago I was in Washington where I heard a congressman talk about whether a Trump administration might really push the senate to get rid of the Johnson Amendment. What does the Johnson Amendment do? It restricts any 501(c)3 nonprofit from engaging in meaningful political activity. The IRS explains:

Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity.  Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.

Certain activities or expenditures may not be prohibited depending on the facts and circumstances.  For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.

On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.

The first thing to understand is that the Johnson Amendment isn’t a law. It’s a senate-committee amendment to the federal tax code. It’s just a tax policy; easily changed.

The second thing to understand about the Johnson policy is that Lyndon Johnson pushed this through his senate committee in 1954 after narrowly winning re-election in Texas after he faced serious, nearly career-ending attacks from 501(c)3 nonprofits. This was created by a singular politician and very much motivated by his own self-interest.

The third thing to understand about the Johnson policy is that it’s a simple and straightforward violation of the First Amendment right to freedom of expression that applies to some (but not others!) simply based on their tax status. A nonprofit corporation is a still a corporation—a coming together of people to engage in public life and ultimately to influence its development in a certain direction. Like any other corporate or human activity. If Trump had the senate create a tax policy restricting the speech rights of Medicaid-eligible citizens, or granting speech rights (rights to libel or defame) to hedge fund managers, it would be immediately recognized for the obvious farce that it is. This farce exists today for every nonprofit from charity:water to United Way to your local church. A young Pell grant recipient in college doesn’t lose his right to give to a political candidate or publicly speak on behalf of a candidate. Neither should a corporation, regardless of tax status.

The fourth thing to understand about the Johnson policy (as Mark Kellner points out) is that it’s contrary to 165+ years of American experience that understood freedom of expression in a much simpler and less compromised way.

This anti-speech tax policy was created by a politician whose self-interest required muzzling nonprofits to ensure easier re-election. I’m hopeful it will be eliminated by a politician who now finds it in his self-interest to restore these simple speech rights.

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