Don’t Tax Independent Expenditures, Eliminate Candidate Donor Limits

The bill authored by Assemblyman Marc Levine (D-San Rafael) to tax independent expenditure campaign spending has a point, although the measure itself is likely to find resistance in both the halls of the legislature and in the courts. Levine’s goal is to see campaigns conducted by candidates who would be accountable for the political messages delivered during a campaign.

With independent expenditures, which legally cannot consult or inform a candidate’s campaign of its activity, messages sent out on behalf of a candidate may not represent the candidate’s view, or his or her opinion of an opponent. Yet, the candidate often has to answer for this unsolicited “help.”

Assembly Bill 1494 would try to discourage use of independent expenditures (IE) by taxing the money spent in an IE campaign. Such a tax is probably unconstitutional. As election law expert Rick Hasen of UC Irvine told the Los Angeles Times, “You can’t design a tax with the purpose of trying to suppress speech. …The clear import of something like this would be to discourage people from making independent expenditures.”

Before such a law would face a legal challenge it would have to maneuver through a field of obstacles in the legislature. Well-off groups such as labor and business with sway under the capitol dome want to keep their ability to influence elections. Legislators themselves are likely to be concerned that the tax will limit the money that would be spent in their future campaigns.

Independent expenditure spending on campaigns has greatly increased since a 2000 ballot measure limited the amount of money that can be given directly to a candidate.

One goal of that measure was to increase the influence of political parties, according to supporters. However, independent expenditures arose and as Sacramento Bee columnist Dan Walters wrote there was a more cynical reason politicians supported the ballot measure:“(l)aundering campaign money to disguise its source is exactly what state legislators intended when they wrote Proposition 34 a decade ago. Its “strict limits” were designed to give the appearance of reform while encouraging money-laundering and so-called “independent expenditures” so that candidates wouldn’t be accountable to voters for their sources of campaign funds.”

A solution to the problem of beefing up candidate-controlled committees is to end the donation limits. Let candidates receive as much as a donor wants to give, report the donations immediately so that the public is aware of the donors, and let the candidate and his or her consultants fashion the campaign messages and be accountable for any promises or outrageous claims made during the campaign.

Joel Fox is Editor of Fox & Hounds and President of the Small Business Action Committee

Originally published by Fox and Hounds Daily