Burmese President Thein Sein will be visiting Washington next week. It’s the first trip by a Burmese head of state in nearly five decades and reflects the reform winds blowing through Naypyitaw.

Burma, or Myanmar, languished under brutal military rule for a half century before the armed forces moved into the background and created a nominal civilian government. Thein Sein is a former general and the retired junta leaders undoubtedly remain influential, though their exact role remains hidden.

Nevertheless, Burma has come far in the last couple of years. Many political prisoners have been released. Many restrictions over the media have been lifted. Nobel Laureate Aung San Suu Kyi has been freed from house arrest and elected to parliament. Fighting has ceased against many separatist ethnic groups. Naypyitaw has distanced itself from its former patron, China.

There’s still more to be done. Conflict with the ethnic Kachin continues to ravage parts of Burma, while Buddhist mobs have been conducting a different form of war against Muslim Burmese. Nor is it certain that the military is prepared to fully yield power in 2015, when the next election is scheduled. Indeed, Tomas Ojea Quintana, the United Nations Special Rapporteur on human rights in Burma, recently issued a report citing the need for additional reforms, which I discussed in a recent article in National Interest online.

Nevertheless, after spending years vying with North Korea for distinction as the world’s worst government, Burma now offers its people hope of liberating change. Ultimately enduring reform will come from inside Burma. But the West can help.

The best reward for Naypyitaw for continuing reform is steadily eliminating remaining economic sanctions. Foreign investment and trade will help moderate poverty, expand the middle class, and provide resources for democratic activism. Expanding the economic pie also would give government and security personnel a stake in a freer society in which their power is more limited.

But Washington and other democratic states should not bury Naypyitaw in foreign aid. Alas, history demonstrates that foreign “assistance” more often deserves to be called foreign hindrance, actually slowing reform and entrenching corrupt elites. Burma desperately needs a broader civil society as the foundation for a freer and more prosperous future.

There is a lot of bad news in the world today. Burma offers some welcome good news. Washington should use Thein Sein’s visit to encourage continuing political and economic reform.

If you had asked me who would actually try to defend the behavior of the IRS employees, I would have guessed, “Oh, maybe someone at the New Yorker.… Jeffrey Toobin?” Bingo. 

ABC News reports on the bewildering experience of Marion Bower after she sought exempt tax status for her Tea Party group, not expecting the process to drag on for two years:

The Ohio woman also did not expect that providing information about the books her group read would be part of the application process.

“I was trying to be very cordial, but they wanted copies of unbelievable things,” Bower told ABC News today. “They wanted to know what materials we had discussed at any of our book studies.” …

“They wanted a synopsis of all the books we read,” Bower said. “I thought, I don’t have time to write a book report. You can read them for yourselves.”

The thing is, the essentials of the IRS scandal were clear to anyone with eyes to see more than a year ago — before the intervening false denials by IRS officials, the more recent admissions and apologies, and the promises of house-cleaning from the President and leading Democrats. Here’s an AP story from March 2012 citing “instances in which the IRS has asked for voluminous details about [Tea Party] groups’ postings on social networking sites like Twitter and Facebook, information on donors and key members’ relatives and copies of all literature they have distributed to their members, according to documents provided by some organizations.” Here are more reports on IRS demands for transcripts of speeches and radio shows, donor lists, and the like. It is perhaps needless to add that many other groups seeking 501 (c)(4) status were not subjected to overbearing demands of this sort. 

Regarding Jeffrey Toobin, it seems to me that there are two main possibilities. Either he is unaware that the IRS’s scrutiny of politically dissident groups has included these sorts of crushingly burdensome demands, in which case he has not made much of an effort to get up to speed on the story. Or he is aware of it, but sees nothing wrong enough with such demands to give him pause in his defense of the agency’s conduct.

Incidentally, Mrs. Bower of Ohio eventually figured out how to respond to the IRS’s demand for synopses of the reading materials provided to her group’s members. She sent them a copy of the U.S. Constitution.

The recent revelation that the IRS targeted conservative political groups is now moving into the second stage of a DC scandal: the first is finding out what happened; the second is finding out how high up it goes. Although it is important to find out how many, if any, high-level officials are culpable, high-level participation is not necessary for libertarians to have a small “I told you so” moment.

But we should not try to oversell it. Some libertarians have an odd tendency to believe that government is more effective at doing bad things than at doing good things. At the extremes, this manifests as the “libertarian conspiracy theorist”—someone who oddly believes that, while government can’t effectively run health care, schools, or welfare programs, it can successfully orchestrate and cover-up massive conspiracies. But we don’t need high-level conspiracies to point out that abuses of power, even by low-level officials, can be expected. Moreover, as government grows larger it becomes both less accountable and more important to our lives, thus giving government officials both more leverage and more freedom to misbehave. 

In his novel Child 44, a fascinating detective story that takes place in Stalin’s Russia, Tom Rob Smith tells of an encounter between a party-member doctor and the novel’s protagonist, a Muscovite police officer who was once a loyal party member but is slowly losing his faith. The officer is out sick and the doctor visits to see if he is really sick or just trying to avoid work. Shirking work is a grave offense, and the doctor’s judgment could destroy the officer and his wife. A bad report and they will go to the Gulag. A good report and they get to stay in their relatively comfortable apartment in Moscow. Knowing his power, the doctor makes unwanted advances towards the officer’s beautiful wife, telling her that “Ten minutes is hardly a high price to pay for the life of your husband.”

It is a chilling episode, and while I am certainly not comparing the U.S. government to Soviet Russia, there are some lessons to be learned. As much as we might like a sensational story implicating top-level officials, the most common form of government misconduct does not usually involve devious scheming by politicians. Instead, it is often both less insidious and more invidious—the cumulative effects of misconduct by less-accountable, low-level officials who enjoy immense power over small areas of our lives. 

My father, an attorney, once told me he first started having vaguely libertarian thoughts after he began dealing with banking regulators. The regulators were relatively low on the chain of command, yet they held an incredible amount of power over their areas of concern, more than enough to make my father’s job very difficult. And they did. Similar stories happen all over the country, and sometimes they make it to the Supreme Court.

But most don’t usually make it to any court, much less the Supremes. The United States government is the most powerful organization the world has ever seen, and lower-level officials wield a small fraction of that power, which is still more than enough to make most people sit down and shut up.

I’m not saying that most government officials illegitimately use their power. I believe that the vast majority of government officials do not. I am saying, however, that many abuses occur and more can be expected if the government continues to grow larger and more powerful. It is simply too large an organization for anyone to control.

The revelations of IRS officials targeting conservative and libertarian groups suggest that now is a good time for lawmakers to review a broad range of the agency’s activities. Since the agency’s last overhaul in the IRS Restructuring and Reform Act of 1998, its budget has exploded from $33 billion to a proposed $106 billion in 2013. 

Using data from the OMB budget database, I split total IRS outlays into two broad activities: administration and handouts. Administration includes tax return processing, investigations, enforcement, and other bureaucratic functions. Handouts mainly includes spending on “refundable” tax credits such as the EITC. 

The chart shows that the IRS has become a huge social welfare agency in recent decades. Handouts have soared from $4.4 billion in 1990 to an estimated $91.1 billion in 2013 (red line). Handouts are down a bit in recent years because some of the refundable credits from “stimulus” legislation have expired. IRS administration costs have grown from $7.7 billion in 1990 to an estimated $15.3 billion in 2013 (blue line). 

How should we reform the IRS budget? First, we should terminate the handout programs. That would save taxpayers more than $90 billion annually and cut the IRS budget by 86 percent. 

The largest IRS handout is the refundable part of the EITC, which is expected to cost $55 billion in 2013. Many policymakers favor the EITC as a “conservative” handout program because it encourages people to work. But the EITC itself creates a discouragement to increased work over the income range that it is phased-out. It also adds to tax-code complexity and has an error and fraud rate of more than 20 percent.

The EITC is an example of how big government begets more big government. We certainly wouldn’t need the EITC incentive to work if we slashed all the taxes and welfare programs that currently encourage people not to work. 

It’s a similar situation with other IRS handout programs, such as the $1 billion “Therapeutic Discovery” grant program. These grants are supposed to “produce new and cost-saving therapies, support jobs and increase U.S. competitiveness.” But it would be better to accomplish those goals by repealing the excise tax on medical devices and slashing the high 40 percent U.S. corporate income tax. 

As for the $15 billion in spending on IRS administration, we could dramatically cut that cost with major tax reforms. In particular, a consumption-based flat tax would hugely simplify the code and greatly reduce paperwork costs of the IRS and taxpayers alike. 

Looking ahead, the IRS budget is expected to balloon in coming years as the agency plays a key role in implementing ObamaCare. Unless the health care legislation is repealed, IRS outlays are expected to soar from $106 billion this year to $263 billion by 2023.

I blogged earlier about how HHS Secretary Kathleen Sebelius is unethically, and possibly illegally, 

shaking down industries she regulates to get them to fund ObamaCare’s implementation.

Sen. Lamar Alexander (R‑TN), the ranking member of the Senate’s Health, Education, Labor, and Pensions Committee, says this is “arguably an even bigger issue [than] Iran-Contra,” and ably defends his position against the Washington Post’s Sarah Kliff.

Excerpts from Alexander’s comments:

[I]n Iran-Contra, you had $30 million that was spent by Oliver North through private organizations for a purpose congress refused to authorize, in support of the rebels. Here, you’re wanting to spend millions more in support of private organizations to do something that Congress has refused…

The cause in the first case was the cause of rebels in Nicaragua. And the cause here is to implement Obamacare. Congress has refused to appropriate more for that cause. The administration seems to be making a decision that’s called augmenting an appropriation. Its a constitutional offense that’s the issue…

If you read the report of the Iran-Contra select committee, it said that the executive cannot make an end run around Congress by raising money privately and spending it. That seems to be happening here. That was essentially the problem. There the money came from a different place, but if you look at my statement [the Iran-Contra report said] “a president whose appropriation requests were rejected by Congress could raise money from private sources or third countries for armies, military actions, arms systems, and even domestic programs.” [Emphasis added.] It’s the same kind of offense to the Constitution. It’s the same kind of thumbing your nose at Article 1…

If that’s what they’re saying…that Congress has refused to appropriate the money, then you can’t do it. That’s a curb on the executive.

Alexander has sent a letter to Sebelius requesting information about her extracurricular fundraising activities.

Last night, the Daily Show’s Jon Stewart said of reports the IRS singled out tea-party groups for extra scrutiny, “This seems like a genuine scandal.” Then he turned on the funny: “In their defense, there is a good reason why people using the IRS to crack down on political enemies would not want Americans educated about the Constitution.” Best line: “Wait a minute. I didn’t realize apologies were sufficient in IRS-related issues.” Video below. (Beware: some racy language.)

In the very next segment, Stewart portrays HHS’s release of (wildly divergent) hospital chargemaster prices as an example of government doing things right, gives kudos to HHS, and laments that government doesn’t do more of that sort of thing. There’s only one problem. Outrageously high and divergent hospital prices are due to government policies that encourage patients to pay for more items through health insurance and that thereby destroy the cash market and any hope of competitive and transparent prices. So that episode is also an example of government failure. 

The show’s Moment of Zen was this priceless clip of former IRS commissioner Douglas Shulman denying that his agency was on a tea-party witch hunt:

This morning Politico reports that there are plans for some congressional hearings into the unfolding IRS scandal. According to that report, these hearings will “probe whether the targeting of right-leaning groups is systemic or isolated.” In that connection, members of Congress (and others) should read this article from the Cato Journal, “Political Influence and the Internal Revenue Service.” Here’s an excerpt from the conclusion:

While history is replete with anecdotal evidence concerning the misuse of the Internal Revenue Service, this paper attempts to offer, to our knowledge, the first empirical evidence of systematic political manipulation. Findings reveal that the IRS is more active in states where noncompliance is more likely, but we also find evidence that political factors help shape enforcement patterns. For example, the IRS audits fewer returns in states whose representatives are members of congressional committees charged with IRS oversight. In addition, taxpayers in those states that gave Clinton greater political support were subjected to significantly fewer audits. Using 1995 audit rate data from the 63 IRS districts across the nation, we find that political factors offer significant explanatory power. In particular, a 10 percent increase in the vote for Clinton in the 1992 presidential election led to a 0.1 percent reduction in returns audited from the state. Thus evidence supports our hypothesis that both public-interest and private-interest motives shape IRS enforcement activity.

George Will has additional thoughts on the IRS matter:

The Post reported Monday that the IRS also targeted groups that ‘criticized the government and sought to educate Americans about the U.S. Constitution.’ Credit the IRS’s operatives with understanding who and what threatens the current regime.

Read the whole thing.