A few Republicans out there, struggling to put the IRS scandalette in a larger context, are now saying it shows we need tax reform. It doesn't really, unless their argument is that we've been letting shamelessly political 501(c)(4) organizations get away with a scam and we ought to clarify the law on what such organizations can do. But that's not what they're saying. What they're saying is that the IRS matter shows we need to change the tax code to reflect the same policies they've advocated forever.

It wasn't as though this particular scandal arose because filing your personal income taxes is too complicated or because the corporate tax system is riddled with loopholes. It was something very specific, the law regarding how certain kinds of nonprofit organizations are allowed to operate. Frankly, there's no part of the tax code conservatives care less about. What they're interested in is changing personal and corporate taxes.

Something odd happened to Barack Obama's approval rating last week: nothing. With a bunch of controversies swirling about the administration, one might think Americans would be thinking less of his performance. Yet the latest polls from Gallup and CNN both show his job approval essentially unchanged, at just at or above 50 percent.

So far anyway, these "scandals" are, like most scandals, an almost completely partisan phenomenon. Yes, there are some—Watergate, Iran-Contra—where the facts are so damning and undeniable that even the president's own party can't help but acknowledge them. But Benghazi and the IRS are not Watergate or Iran-Contra. Perhaps they'll turn out to be, if we find out something completely shocking. Perhaps we'll discover that Barack Obama is on tape personally ordering the Cincinnati IRS office to put the screws to Tea Party groups, just as Richard Nixon was on tape ordering his aides to get the IRS to audit his political opponents. But that hasn't happened yet.

So conservatives are trying something new. If you were paying close attention the last couple of days, you saw them bringing up a new charge, one unrelated to the actual controversy: IRS income tax audits.

As we're learning more about the IRS giving heightened scrutiny to conservative groups filing for tax-exempt status, we should make one thing clear: If what we've heard so far holds up, the people involved should probably get fired, and new safeguards should be put in place to make sure nothing like it happens again. And let it be noted that liberal publications, at least the ones I've seen, have all taken that position and have been discussing this story at length.

Now, let's see if we can understand the context in which this happened. There's an irony at work here, which is that it may well be that the IRS employees involved were trying to obey the spirit of the law but ended up violating the letter of the law, while for the organizations in question it was the opposite: they were trying to violate the spirit of the law, but probably didn't violate the letter of the law.

As a general matter, I think the best reason for government not to go around competing with private industry isn't that doing so inherently diminishes our freedom, but because it's just not worth the effort, and much of the time it isn't going to provide any benefit to consumers. It wouldn't be tyrannical for the federal government to produce its own brand of cola, but it would be pointless, since they're unlikely to make something people will like better than Coke or Pepsi, and consumers seem to be perfectly happy with their current cola options. On the other hand, there are some areas where the market has clearly failed—health insurance for senior citizens, for instance (and, I'd argue, everyone else too, but that's a separate topic)—where it makes sense for the government to step in.

But what about areas where the market in question involves private companies helping consumers interact with the government itself? And where there isn't a particularly egregious market failure, but the government could clearly offer people the same service for which they're now paying, but at a lower price? Like, say, zero? In that case, it would be hard to argue that the government would be outside its rights if it made it easier for people to interact with it, solely on the basis that those private companies might suffer from the competition. Well, according to a story from Pro Publica, that's what's happening in the area of tax preparation:

The Internal Revenue Service recently updated its tax-gap estimate using 2006 tax year liabilities, and the numbers show that underreported income—largely from the one percent—remains a big obstruction to collecting taxes. Even though 83 percent of the country voluntarily pays its taxes, there are still $450 billion worth left unpaid. The IRS believes tougher enforcement could help it collect an additional $65 billion, but that still leaves $385 billion that will never be paid. That's a lot of money—enough to pay for more than 11 payroll-tax-cut bills like the one passed by Congress at the end of last year. 

For James O'Keefe, "defunding NPR is obvious." He hasn't expanded on his reasoning, but the Republican line on NPR funding, in general, is that our deficit-ridden nature can't afford these kind of luxuries.

What we can afford, apparently, is to subsidize O'Keefe's work. He's applied for a 501(c)3 designation for his organization, Project Veritas, which would make all contributions to the group tax-deductible.