**Listen for details on how to win tickets to our live WITHpod recording with Stacey Abrams!**

Why is it so hard to raise taxes on the rich? From freshmen firebrands to presidential hopefuls, taxing the wealthy has become the Congressional conversation du jour of 2019 with no signs of slowing down. But before even getting into the policy debates and the ideological disputes, there’s one important and fundamental question that has to be answered: Do we have an IRS that has the capacity to do such a thing?

ProPublica’s Jesse Eisinger has done stellar reporting to uncover the scandalous hidden story of the ways the Republican Party, corporate interests, and big donors have all succeeded in gutting the IRS of its ability to do the one thing it exists to do: collect taxes to fund the United States government.

JESSE EISINGER: Tax debts expire after 10 years. Roughly several hundred million used to expire in 2011 on average. In years past. Now it's eight billion in the most recent year.

CHRIS HAYES: Wait a second. What you're telling me is that eight billion dollars of proper government revenue vanished-

JESSE EISINGER: Assessed government taxes, that people owed them, they know who it is and it just vanished because they can't collect it.

CHRIS HAYES: Eight billion dollars.

JESSE EISINGER: Eight billion dollars last year.

CHRIS HAYES: That's a lot of money.

JESSE EISINGER: Yeah, it's real. Well, start a billion here a billion there.

CHRIS HAYES: You could probably build a wall with that.

Hello, and welcome to "Why Is This Happening?," with me your host, Chris Hayes. Do I sound a little different? Yes, I do. Because I'm sick. I'm getting over the flu. I'm sorry that you're going to have to suffer through my hoarse voice for this intro today. Get your flu shots, everyone. I got mine just for the record. Get them every year, but flu going around my flu defenses.

Also, before I get into the intro for today's show — if my voice can make it — I want to just tell you that there are some really important information at the end of the conversation, the end of the podcast, listen all the way through about, Stacey Abrams live with "Pod" in New York City, including a little ticket giveaway action. That's we do in the audio world. I am bummed that we can't take live calls. I would literally love nothing more than like a big call board. Just put people on the air. Like the phrase that pays.

TIFFANY CHAMPION: The what?

CHRIS HAYES: I just I said Tiffany, I said to Tiffany, "Can we come up with a phrase that pays," she's like, "The what?" I was like, "That's like a morning zoo trope."

So, The hottest club in politics right now, the hottest spot, the “Night at the Roxbury,” place you want to be at is taxing the rich. In democratic politics, that is where it is going down. Seemingly kind of all at the same time, you've got a million different proposals for taxing the rich. You've got Alexandria Ocasio-Cortez floating her 70 percent top marginal tax rate, which would take us back to rates we haven't really seen since mid-century. You've got Elizabeth Warren's really fascinating wealth tax idea, which is totally novel, has not been done in the US except — as I'm fond of pointing out — for every single person that pays property taxes every year.

If you're listening this, and you pay property taxes, you already pay a wealth tax. Look at that. The wealth tax exists. This would be a wealth tax for people who have over $50,000,000 in wealth. For most people, most of their wealth is the property they own. The vast majority of Americans, the majority, the overwhelming part of their wealth is the property they own that they do pay a wealth tax on every year. People up at the top $50,000,000 in holdings, they do not pay a wealth tax. So, you could look at as a just kind of an equity sort of situation. You've got Brian Schatz out of Hawaii, who I think is going to introduce, or has introduced a financial transaction tax, which is a very popular idea that's kicked around sort of progressive think tank circles for every stock or financial transaction, a very, very small amount of money to tax that, a lot of people think would have both good benefits on the finance world because it would get rid of a lot of hot money moving in and out of places.

You got Bernie Sanders got a new thing to tax rich estates. He wants to raise taxes on really, really, really big estates. I think we'll see more, and more, and more of this to come. Here's one really interesting question that comes up with all these proposals, and it was I think, the first question I asked Elizabeth Warren when she was on "All In" about this proposal: her wealth tax. It's not a question about is this morally justified? Or is this substantively attractive? Though there's a debate over that. It's not a question about the incentives it might create, right? Because there's debate about that, right? If you tax people's wealth, maybe they'll stop working, or they won't ... they'll just sleep till 11 a.m. rather than getting up at nine and creating jobs the first two hours a day, or something like that.

This sort of ridiculous incentive argument taken to with logical and absurd extreme. No, the first question, the first question a lot of people have, the first question I have for Elizabeth Warren is, can you do this? And I don't mean can you do it constitutionally — though that's a question — I mean can you literally get the wealthy people to pay? There's all these proposals floating around there and what you see is a widespread, totally earned, totally grounded-in-reality skepticism of like, okay you're going to pass a tax hike on the rich in theory, making air quotes, but aren't you actually going to get the rich people to pay their taxes? Because in the America I live in I'm not super confident that you can do that because they sure as hell seem to get away with avoiding a lot of taxes, and like the President of the United States who has been in the public spotlight for the entirety of his career, and who has been, quote, under audit forever.

Sure seems like maybe not a guy who's like doing his utmost to pay all the taxes that are due. So okay yes, let's tax the rich. Let's agree for a second, stipulate it's not a consensus agreement American life, but it's actually quite popular in the polling. But let's say yes, as a policy matter, taxing the rich at higher rates in different and new ways is a big part of combating the rising inequality. That's the kind of interesting ideological policy dispute. But the much more fundamental, and in some ways important, though arguably more boring, discussion to have is literally do we have an IRS that can do that? Is there a capacity on the part of our government to do that?

That question is as profound a question about where we are as a civilization as you can ask. The ability of a state to effectively tax its most powerful wealthy members is a threshold question of the integrity, health, and vibrancy of that state. Going back years, thousands of years, going back all through history, time and time again, huge fights erupting between the state, often represented by the king or the Emperor and say, the landowners, who don't like to pay tons of taxes. This is a key line of conflict, political conflict, throughout civilization in history. As a key question about the health, vibrancy, efficacy of a state of whether it can pull it off. Can you make the very, very rich people in your society pay taxes to the Public Treasury?

And often the answer to that is, no. In many different states throughout history, and around the world right now, the answer is no. In fact, we've seen this massive explosion in overseas tax dodgers, and something we've talked about a little bit in this program. The question right now before the U.S. is, what kind of country is the U.S.? What kind of civilization is the U.S.? Is it the kind of country that still has the power to effectively tax its richest members? The answer to that question makes up the substance of today's conversation with a great reporter,. He's a senior reporter and editor at ProPublica. He wrote a great book about Wall Street, and the financial crisis, and the Obama administration called "The Chickenshit Club." He has embarked on this reporting project with ProPublica about the nature of the IRS, and the really unnerving ways in which systematically corporate interests, the Republican Party, the wealthy folks, the wealthy anti-tax zealots that fund the Republican Party and fund much of the conservative movement have succeeded in gutting the capacity of the IRS to do this elemental thing: collect taxes. Not exclusively the very rich, but most problematically has gut the ability of the IRS to collect taxes from the very rich.

In fact, as you'll hear this conversation has changed the focus of the IRS in who they go after and who they audit, from the very rich to the working poor. Over the last decade or more, kind of in front of our faces, but below our gaze, there has been an effective and concerted effort by Republican appropriators, industry lobbyists groups and the wealthy to basically break the legs of the IRS to make it an ineffective watchdog, and an ineffective agency at doing the one thing it exists to do, which is collect taxes to fund the United States government. Before you get to the fun and exciting policy debate questions of Elizabeth Warren or Bernie Sanders or Alexandria Ocasio-Cortez, or all the fights that are going to happen over the course of this Democratic primary in which taxing the rich will be an absolutely central part of the platform. No question. It'll be a central part of debates. It'll be a central part of the Democratic Party platform, it'll be a thing everyone's talking about.

Before you get to that, you have to have an agency that can actually pull off the policy, you have to conceive of, design and fund ways of making the IRS the kind of agency that can do what you're asking it to do in your policy papers.

Today's conversation is all about what those in power, and those with wealth, who know what they're doing, what they have already done behind the scenes in the bowels of the legislative process to make it so the IRS cannot effectively collect taxes from wealthy people.

CHRIS HAYES: Collecting taxes is one of maybe the two most core functions.

JESSE EISINGER: Yes.

CHRIS HAYES: Right?

JESSE EISINGER: Yes.

CHRIS HAYES: Like, it's like it's right there. It's like, you've got the army. You've got the taxes. You've got a state.

JESSE EISINGER: Right. We wanted to make this point that people have been worried about the health of our democracy, and we wanted to make the point that before you have a democracy, you have to have a functioning tax collection system. And we are in jeopardy-

CHRIS HAYES: Meaning you have to have a state.

JESSE EISINGER: You need a state, and the state needs to be funded, and the state needs to collect taxes and then the tax collection needs to seem, in some way, to be equitable.

CHRIS HAYES: Tax evasion, the inability to collect taxes, is a feature throughout history of essentially failed or failing states.

JESSE EISINGER: Exactly. Yeah.

CHRIS HAYES: Right? Whether that's because of corruption or legitimacy issues, right? I'm not going to pay the king my taxes. I'm a feudal lord because I don't view the king as legitimate anymore. Next thing you know, we have a succession fight.

JESSE EISINGER: My wife and I traveled to Apulia in the heel of the boot of Italy this summer, and they have these strange elf-like structures called trulli all dotting the landscape. They're really beautiful, and they don't have any mortar in them, and the reason they don't have any mortar in them is they were a regency of the Spanish hundreds of years ago, and the Prince didn't want the structures to be stable because the tax system was based on how many edifices you had in your region. And so when he got wind of the Spanish tax collectors, he had all the farmers dismantle-

CHRIS HAYES: Knock them down?

JESSE EISINGER: Yeah, dismantle them, and so you could build up your trulli and knock them down.

CHRIS HAYES: It's like your property tax assessor coming out once a year, and you just razing your house. Just like, "Buddy, I don't know what to tell you. Nothing here."

JESSE EISINGER: Right. I had a lean-to and then I took it down. But, you know, soon after, the Spanish lost Italy.

CHRIS HAYES: Right, that's the point. There's a connection here. There's a deep connection between the ability of the state to collect taxes both from a kind of technical standpoint and the standpoint of legitimacy that gets to the heart of the vibrancy and health of a state.

JESSE EISINGER: Right. So successive IRS commissioners have warned we don't want to be Greece or Italy now, today, where they don't have a functioning tax system, and the more people understand that they don't have a functioning tax system, the more people won't pay it, and then you get into a spiral where it's very difficult to get out of.

CHRIS HAYES: You then become a sucker. This is one of these things where there's a real race to the bottom. There's real pure effects. We see it in corruption all the time, right? If everyone's taking bribes, you become a sucker not taking a bribe. When you put a person who is generally honest and has integrity in an environment where no one is taking bribes, he or she doesn't take bribes, but you put them in an environment where everyone's taking a bribe, you start to feel like, "What am I, an idiot? Everyone's taking a bribe. I'm going to take a bribe."

Same thing goes for taxes. If it becomes the case that you look around, it's like no one's paying their taxes and everyone's cheating, and everyone's getting away with it, that will convert people into being cheaters who wouldn't otherwise be cheaters.

JESSE EISINGER: Yeah. It licenses a kind of behavior, and you've seen this from Trump with the reason we are seeing so many scandals at cabinet officers is that he's licensed this kind of behavior, corruption. We had no corruption scandals under Obama. None. And I think they were more honest people, but there wasn't this pure change from complete honesty to total dishonesty.

CHRIS HAYES: My favorite example of this is David Shulkin, who is a natural experiment, who literally was an Obama deputy cabinet official, no scandals. Becomes the head of the V.A. under Trump, and all of a sudden it's like Wimbledon tickets and all sorts of other stuff.

JESSE EISINGER: Exactly. I completely agree with you.

CHRIS HAYES: So you've been doing this. You're an investigative reporter. You're kind of writing this really fascinating book about white collar criminal prosecutions, and you've undertaken this reporting project on the IRS.

JESSE EISINGER: Yeah.

CHRIS HAYES: First, and we're going to talk about what has happened to the IRS, which is utterly scandalous. Utterly scandalous, and everyone should be outraged about. Before we get to that though, what is the IRS? What is it and what does it do?

JESSE EISINGER: Well, as everybody knows, it collects taxes. It collects taxes from large corporations, and small corporations, and individuals. It also polices our tax laws, so they investigate tax fraud. There's legal tax avoidance, then there's tax evasion, and the IRS is on the civil side trying to uncover tax avoidance, telling people that they owe more money, and then there's illegal tax evasion that they investigate and then refer to the Department of Justice for criminal investigation.

CHRIS HAYES: Oh, so this is an interesting distinction. So tell me more. Tax avoidance is you — either through accident or overly aggressive accounting — reduce your tax burden.

JESSE EISINGER: It's not accidental.

CHRIS HAYES: Right, okay. So these are not mistakes.

JESSE EISINGER: No, these are not mistakes. This is Google moving billions of dollars of profit abroad because they have moved IP to Ireland.

CHRIS HAYES: Everyone's favorite country to hold IP in.

JESSE EISINGER: Yes, and they get expensive lawyers and expensive accountants to design these in ways that, they argue, comply with the law or within the four corners of the law, and then the IRS says, "No, it's not," or "We don't agree with your interpretation. We're going to argue with you about it." And they have an argument, and then they come up with, "We've audited you, and you owe us X amount of money." Mostly that's in the legal realm.

CHRIS HAYES: I mean, what's key about that is that's not subterfuge. They're kind of clear about what they're doing. It's a dispute between the very wealthy tax lawyers for the very wealthy corporations, and the tax authority about what exactly is legal.

JESSE EISINGER: Right. Right. I mean, there's an enormous amount of subterfuge going on, and there's enormous amount of obfuscation. They're designed to be extremely complicated. They'll fundamentally change the substance of an economic transaction.

CHRIS HAYES: And the question then that the IRS faces in those contexts ... We're talking about those behemoth corporations doing all this very complicated tax evasion is what's the line of what's clever but legal, or just a facial violation of the law.

JESSE EISINGER: To give these corporations their due in this particular case, there's a lot of stuff that's arguable that really wouldn't be criminal. You couldn't really appropriately think of criminality. Criminality is knowledge of forethought. You know something was wrong and you did it anyway, and so the IRS-

CHRIS HAYES: Like Paul Manafort just comes to mind.

JESSE EISINGER: Why would you say that? Yeah.

CHRIS HAYES: Like a person that I associate with that just being super, hella into crimes, being like "This is criminal. This is super criminal. I'm criming it up."

JESSE EISINGER: I mean, there are a variety of names you could come up with. Michael Cohen is another name that springs to mind.

Michael Cohen, former personal attorney to President Donald Trump, exits federal court on Nov. 29, 2018 in New York City. Drew Angerer / Getty Images file

CHRIS HAYES: Right. Yeah, also in mind.

JESSE EISINGER: Yes. Both tax evaders-

CHRIS HAYES: Yes, good point.

JESSE EISINGER: By the way, but also bank fraudsters, and an orgy of criminality for those guys. But, yeah, so then there's crime. And the IRS, there's actually debates about whether the IRS should have a criminal enforcement operation. It's actually a kind of poor relation to the rest of the service. They don't really get along, and one of the things that we've found is that the referral system, where the auditors come in and they look at something and they say, "Boy, this actually crosses the line here"-

CHRIS HAYES: They ring a bell. They're like, "We've got ourselves a Manafort!"

JESSE EISINGER: Yeah. Well, they're supposed to, but it's actually collapsed, and so they hardly do that anymore.

CHRIS HAYES: Oh, that's interesting.

JESSE EISINGER: Yeah, so they hardly ever refer cases over to the criminal section.

CHRIS HAYES: And it's an enormous bureaucracy. I mean, collecting the nation's taxes for the United States of America-

JESSE EISINGER: It's certainly one of the biggest, and it's got a $12 billion budget now, and tens of thousands of employees, and touches every aspect of our lives, and is one of the most hated bureaucracies. You're talking about how boring it is. The reporting on it is extraordinarily boring. I've reported on anti-trust economics, and collateralized debt obligations, and bank stress tests, and this was some of the most excruciatingly dull reporting to do.

CHRIS HAYES: Amazing.

JESSE EISINGER: And so hard.

CHRIS HAYES: Jesse is weirdly blushing while he's telling me this.

JESSE EISINGER: Maybe I'm just warm. Yeah, yeah.

CHRIS HAYES: It's a shameful secret how bored he's been by his own fantastic IRS reporting.

JESSE EISINGER: Oh, well, thank you.

CHRIS HAYES: This is a thing that I feel like anyone who's listening to the podcast who's a lawyer or who has gone through law school is like ... Everyone says "Take tax law. Take tax law. It's a really important area of the law. Massively important area of the law." Incredibly lucrative area of the law for people that get very good at it or go into it.

JESSE EISINGER: Yeah.

CHRIS HAYES: But it's crushing when you're sitting there in class.

JESSE EISINGER: Years and years ago, somebody said to me the greatest thing that could happen to you in law school is to find out that you fell in love with tax law.

CHRIS HAYES: Right, because you've got to take it.

JESSE EISINGER: You have a lifetime employment and you'll be a very wealthy person.

CHRIS HAYES: So what you're reporting is about the sort of what has happened to the IRS over the last how long?

JESSE EISINGER: Really, eight years. We go through a little bit of the history here because the IRS has been vilified by the right, but relatively recently. Really only since the 90s.

CHRIS HAYES: Yeah. It was a big Gingrich thing. I remember it was a big Gingrich thing.

JESSE EISINGER: Right. But this effort from the Republican party started with the Tea Party Congress in 2011 to really go after the IRS and start gutting it. So there's some history there, but this effort to cut the budget and relentlessly cut the budget started in 2011 and really hasn't stopped.

CHRIS HAYES: So you've got a rhetorical attack where they're sort of a useful punching bag. Like, "Who likes the IRS?" Before that. But there's a kind of plan put in place to really attack it as an institution and to make it weaker, right? To weaken the service.

JESSE EISINGER: Yeah. Deliberately weaken the service.

So, before the 1990s, it was basically a kind of consensus that we have to have a functioning tax collection system. And then in the 1990s, the Republican party is kind of having a debate about how to cut taxes, and there are the "flat taxers," and then there is the-

CHRIS HAYES: Steve Forbes. God bless him.

JESSE EISINGER: Right, and then "fair tax." The fair tax is a consumption tax. The benefit, supposedly, from the fair tax guys, is you can abolish the IRS, and it becomes a kind of catchphrase. Gingrich uses it in "Contract with America," and then they actually go after the IRS and successfully really cripple it for a number of years with some extraordinary hearings. They are these dramatic hearings where IRS supposed whistleblowers and people who were audited were testifying behind screens with disguised voices because of the supposed retribution from the jackbooted thugs at the IRS.

CHRIS HAYES: Wow. These are hearings that Gingrich’s Congress stages?

JESSE EISINGER: These are, yes, senate hearings, and they are very high profile. Then they pass a, quote-unquote, "reform bill" that passes unanimously in the senate. Clinton eagerly signs it, and it completely decimates the enforcement and collectionability of the IRS for years. Then the GAO does a report saying, actually, we couldn't corroborate any of the hearing witnesses. There's nothing ... So one of the things was that the IRS had stormed in, guns blazing. There was a slumber party with teenage girls, and they made the teenage girls get dressed in front of the agents. So there was this lascivious stuff.

CHRIS HAYES: This is one of the whistleblowers?

JESSE EISINGER: This is one of the whistleblowers' stories saying the house of my manager of my restaurant was raided, and guns blazing, and they had the teenage boys lie facedown on the ground, the teenage girls at the slumber party were changing their clothing, and all this kind of depredations from the IRS. Not true. False. It only sort of came after this reform bill.

CHRIS HAYES: That had passed unanimously in the senate and signed by Bill Clinton.

JESSE EISINGER: Passed unanimously and signed by Bill Clinton.

CHRIS HAYES: That bill-

JESSE EISINGER: That bill did a lot of arcane bureaucratic reorganizations for the IRS, but then prevented them from freezing assets of tax cheats, so that collapses.

CHRIS HAYES: I see.

JESSE EISINGER: So audits collapse after that, the budget goes down slightly and collections go way down, and asset freezes go down and basically never recover. But the collections, and the audit rate, and the budget does recover for the 2000s, and then the Tea Party Congress comes in and they are very focused. And they start cutting.

CHRIS HAYES: And what do they start doing?

JESSE EISINGER: They start cutting the budget. So right away in 2000, their first bill which is a budget bill, they call for a huge $600 million cut for the IRS budget. They only get their $600 million cut later, but they do make a cut in 2011 and 2012. And then in 2013, there's the Lois Lerner quote-unquote “scandal,” and if you remember that ... And we didn't mention, you asked me what does the IRS do? Well, one of the things it does is police non-profits who, of course, are exempt from paying taxes if you fulfill certain criteria, and there's a boom in Tea Party groups, political groups, C4s, that can't predominantly do political activity and also claim tax exemption.

CHRIS HAYES: Right. So just to be clear here, right? So people are probably familiar with the idea of a 501(c)(3). A 501(c)(3) is both tax deductible and tax exempt. Your local food pantry is a 501(c)(3).

JESSE EISINGER: Right.

CHRIS HAYES: It doesn't pay taxes. Also, if you give them $500, you can write that off your own taxes. That's tax deductible. 501(c)(4) is adjacent. It's not tax deductible, right?

JESSE EISINGER: Right.

CHRIS HAYES: You can't deduct it off your taxes if you give them money, but they don't pay taxes.

JESSE EISINGER: Right.

CHRIS HAYES: And they're kind of a weird category.

JESSE EISINGER: I mean, it's an infernally complex set of rules that have to do with how much ... So the (c)(3)s are not allowed to participate in policymaking, lobbying or political activity at all. The (c)(4)s are not allowed to be predominantly involved in political activity.

CHRIS HAYES: And that "predominantly" does a lot of work.

JESSE EISINGER: And it does a lot of work, exactly. So that scandal, the short story and it's very complicated, is that the IRS is this little operation, the tax exempt operation of the IRS, which is another tiny backwater to what they're actually doing. They're deluged by groups especially with names like Tea Party Patriots and things like that, and they start trying to figure out how to verify whether these groups are participating in activities that will prevent them from being tax exempt, and that becomes one of the big Obama administration scandals.

CHRIS HAYES: Right, so they blow this up. Basically, what you've got is this interpretational question that's a difficult one, which is whether a 501(c)(4) is on which side of the line of being predominantly doing essentially politics by another name, in which case it can't be tax exempt, or whether it's not predominantly doing that. A bunch of these groups get created because there's all kinds of changes that are happening in campaign finance as well, and you've got this little elf in the IRS that's trying to distinguish "Are these guys on the right side of the line or not?" Essentially.

JESSE EISINGER: Right.

CHRIS HAYES: And this gets turned into Lois Lerner who becomes a villain of this, and Barack Obama's IRS is unconstitutionally trying to destroy Tea Party groups.

JESSE EISINGER: Yes, the Obama Administration, like Nixon, is using the IRS as a vehicle to punish political enemies.

CHRIS HAYES: Right.

JESSE EISINGER: I should've said, before all this happens, as we pointed out that the Republicans were targeting the IRS. Well, it wasn't just because they don't like the IRS and they don't like tax enforcement. It's because the ACA, Affordable Care Act, Obamacare — it's a little known aspect of it — that it's a major tax bill, and most of the implementation of the ACA fell to the IRS, and the Republicans understood it-

CHRIS HAYES: Right.

JESSE EISINGER: Perfectly. So what they wanted to do, what they had obviously failed to-

Get the think newsletter. This site is protected by recaptcha

CHRIS HAYES: Prevent-

JESSE EISINGER: Stop the passage of the ACA, so what they wanted to do was a backdoor way of preventing payments to put the ACA in place, to implement the ACA.

CHRIS HAYES: Right because of the structure of the thing with the subsidies. All that's happening through the IRS, right?

JESSE EISINGER: Subsidies, mandate-

CHRIS HAYES: Right.

JESSE EISINGER: A huge number of things.

CHRIS HAYES: Of course.

JESSE EISINGER: And the IRS was tasked with this huge, huge new responsibility, and what they were doing was they were cutting the budget as they were ladling more-

CHRIS HAYES: Right. So the ACA-

JESSE EISINGER: Burdening the IRS with more and more stuff.

CHRIS HAYES: The ACA basically dumps enforcement into the IRS's lap effectively.

JESSE EISINGER: Yes.

CHRIS HAYES: I mean, the mechanics of the individual exchange is that the mandate, which again, is a tax, right?

JESSE EISINGER: Right.

CHRIS HAYES: Is a tax penalty the IRS is going to enforce.

JESSE EISINGER: Right.

CHRIS HAYES: The subsidy calculations. The IRS is calculating that, right?

JESSE EISINGER: Yes.

CHRIS HAYES: They're the ones that are running that whole thing. So you've given the IRS basically-

JESSE EISINGER: A huge, huge amount of enforcement and implementation responsibility, no added budget, and in fact the opposite where they're cut.

CHRIS HAYES: So they don't like the IRS to begin with, they don't like taxes to begin with, they don't like government bureaucrats to begin with.

JESSE EISINGER: Right.

CHRIS HAYES: Let's also be clear. The rich donor class that funds the Republican party really doesn't like the IRS.

JESSE EISINGER: No, they really don't, and the best thing to do is to get their taxes cut, but second best is to have no tax enforcement of the existing laws and rules.

CHRIS HAYES: Exactly. And in some ways, at a certain point they sort of asymptotically approach each other. I remember this stat that kept happening during the last tax bill, which was about the corporate tax rate, and they kept saying, "The US is the highest corporate tax rate in the world." Which was true. Absolutely true. All of these countries on paper.

JESSE EISINGER: And meaningless.

CHRIS HAYES: And meaningless because what was paid, what was it, 35 percent?

JESSE EISINGER: 35 percent was the headline number, and the effective tax rate was-

CHRIS HAYES: 14 percent.

JESSE EISINGER: Vastly lower.

CHRIS HAYES: Something like that.

JESSE EISINGER: 14 percent for in aggregate, but bigger companies paid much more.

CHRIS HAYES: And people would say that all the time, and I would just kind of be like, "Well, that's a big difference." I'm a person who pays taxes, and the thing that's on the tax chart is more or less what I pay.

JESSE EISINGER: Yeah.

CHRIS HAYES: There sure as hell isn't a 12 percentage point difference, I can tell you that, or 20 percentage point difference.

JESSE EISINGER: Yeah, absolutely. And a story that we're working on that I can preview, my colleague Paul Keil and I have been working on these stories together, is about corporate taxation and corporate tax enforcement, and the biggest corporations pay lower effective tax rates than medium sized corporations and smaller corporations because of course they can pay for lawyers and the accounts. So the bigger you are, the lower your tax bill.

CHRIS HAYES: Okay, so we've got this perfect storm. The Tea Party doesn't like the IRS anyway, the donor class doesn't like it, the ideologues don't like it, the big corporations who are funding them don't like it. They've now got more work to do because of ACA-

JESSE EISINGER: Yeah.

CHRIS HAYES: A lot more work. And then this Lois Lerner "scandal" happens.

JESSE EISINGER: Right.

CHRIS HAYES: So it's like this perfect, "Oh, look at these bad guys."

JESSE EISINGER: Right. And there's another scandal where they're supposedly going to conventions and partying and lavishly spending.

CHRIS HAYES: Was that the muffin?

JESSE EISINGER: Yes, yes. I'm blanking on the details of it, but costumes-

CHRIS HAYES: It was like, there was some $50 muffin somewhere at some-

JESSE EISINGER: Yeah, yeah. It's all-

CHRIS HAYES: There's a video.

JESSE EISINGER: There's a video. Now I'm blanking-

CHRIS HAYES: Like, some dumb, meme-y video, meme-esque meaning-

JESSE EISINGER: Yes. They had actually cut the ... The amount of spending on the conferences had dramatically been cut because it was the first thing to be cut from the budget cuts itself, but it blew up in a scandal anyway. I mean these were pretexts to attack the IRS, and the tax exempt portion is a tiny portion of the budget, but they attacked the overall budget, and the result was tens of thousands of people left $2 billion of the budget in real terms is gone from the IRS.

CHRIS HAYES: $2 billion of what it was-

JESSE EISINGER: Like a $14 billion agency is now a $12 billion agency, and now-

CHRIS HAYES: People need to understand, in a world in which budget generally, both because of inflation and also because size and complexity tend to increase over time, a real cut of $2 billion from a $14 billion agency is a massive, massive, massive cut.

JESSE EISINGER: It's a massive cut, and it's significantly more than most of the other agencies. Most of the other agencies have slowly crept back in budget, and not the IRS. So they're continuing to starve, particularly the enforcement arm. There was a little bit of money that went to try to enforce the Trump tax overhaul, which is yet another enormous task that the IRS has been given that they don't have the manpower for, but no added money for enforcement. So now, today, there are fewer auditors. The number of auditors is fewer than 10,000 people. That's the lowest number since any time since 1953, the year Stalin died.

CHRIS HAYES: In absolute terms, there are fewer auditors in the IRS than there were in any time since 1953.

JESSE EISINGER: In actual human beings.

CHRIS HAYES: Wow.

JESSE EISINGER: When the economy was a seventh of the size that it is today.

CHRIS HAYES: So then what happens? What is the effect, then, on the agency?

JESSE EISINGER: So it's an agency on life support. It's really been gutted. What it's meant is that they don't do the business that they used to do. The main thing that they are supposed to do is audit, and the audit rate has collapsed. It's down 42 percent.

CHRIS HAYES: And again, the logic here is ... I guess kind of an obvious point, but it's worth stating. It's kind of like the speed limit, right? We know what the speed limit is. A lot of people speed in a gray zone-

JESSE EISINGER: Yeah.

CHRIS HAYES: The same way that I imagine a lot of people maybe take some deductions they shouldn't on their taxes, things like that. There's things in the region of the gray area, and the reason that you've got cops and state highway patrol is to create some fear of enforcement.

JESSE EISINGER: Right. You need to-

CHRIS HAYES: And you just got rid of all of them, speeding would go up.

JESSE EISINGER: Yeah, yeah. You need to have a public display of enforcement, and they explicitly talked about this, they completely understand it. We need to do a certain number of audits and be public about them to prevent tax evasion, and now-

CHRIS HAYES: And that's the idea of the audit, right?

JESSE EISINGER: Right.

CHRIS HAYES: The audit is done as, you're trying to get kind of a peak efficiency, which is the same way you don't want state highway patrol every two miles on the same highway, which would be massively expensive and would probably bring speeding down, but that would be overkill. You want some critical mass of auditors and audits such that people fear breaking the law enough to incentivize compliance.

JESSE EISINGER: Yeah, there's a reason why often you see the police car on the highway.

CHRIS HAYES: Great point. That's right.

JESSE EISINGER: They're not just there to catch speeders, but to get everybody to slow down.

CHRIS HAYES: Right. And if you're like me, who never speeds obviously, you do not certainly jam on the brakes going 75 as the car comes into view-

JESSE EISINGER: Who would do that?

CHRIS HAYES: So that you slow down to the correct speed, and then gun it again.

JESSE EISINGER: Well you don't have to have done that because the cars ahead of you have slowed down.

CHRIS HAYES: Right.

JESSE EISINGER: So yes, it's really important. But another important fact of this is that I, and I don't know about you, but people who get W2s don't cheat on their taxes. Compliance rate is like, 99 percent, and the reason is not that middle class people are honest, it's that we're sending-

US tax form 1040 manop1984 / Getty Images/iStockphoto

CHRIS HAYES: There's nothing to do.

JESSE EISINGER: The money is withheld and the government already knows about it.

CHRIS HAYES: Right. So if you're a normal ... let's say just a normal wage earner, there's not much to do.

JESSE EISINGER: No.

CHRIS HAYES: The government's got it-

JESSE EISINGER: You have very little wiggle room.

CHRIS HAYES: Yeah, and in fact, most people I know in the realm of normal wage earners, and this has certainly been my, as a wage earner for my life, you get a refund. Sometimes you'll hear someone didn't file taxes for several years, and it's like, if you're doing a refund, the IRS doesn't care that much if you don't file.

JESSE EISINGER: Right.

CHRIS HAYES: They're just going to keep your money. So the way the system, which, do you know who came up with the system?

JESSE EISINGER: I don't.

CHRIS HAYES: Oh, this is a really fun piece of trivia.

JESSE EISINGER: Yeah.

CHRIS HAYES: Milton Friedman.

JESSE EISINGER: Oh, the EITC?

CHRIS HAYES: No.

JESSE EISINGER: Or just the refund system?

CHRIS HAYES: No, the taking it directly out of the paycheck up front.

JESSE EISINGER: I didn't know that.

CHRIS HAYES: Is a Milton Friedman idea. But there's a grand irony, which is that this brilliant means of essentially ensuring tax compliance, which is that the taxes are paid in your paycheck, because think about it, if it wasn't there, and I've also been an independent contractor, and man, is that ... I mean, all the independent contractors out there right now are nodding their head because the first year you file as an independent contractor, and you've been getting these checks, and you've been like, "Oh, there's some tax liability. I should probably be putting some away for the taxes."

JESSE EISINGER: Oh, yeah.

CHRIS HAYES: "Just pay a little taxes, but we'll figure it out later." And then you file your taxes, and it's like, "You owe $2200." And it's like, "I'm sorry. Excuse me. What? I don't have any money, literally. The alternator on my car broke and I can't pay for that."

JESSE EISINGER: Yeah, that shock.

CHRIS HAYES: "I don't have $2200 to give you." And that's why the wage earning system is so far superior for everyone, and also in terms of compliance.

JESSE EISINGER: Yeah, although you probably needed a better accountant there. But yes, exactly. And the super wealthy of course don't earn wages, and that's where the tax evasion is and tax avoidance. And so the IRS needs to audit those people and they don't anymore, nearly to the degree that they used to.

CHRIS HAYES: So one of the points you're reporting is that this sort of retrenchment that's happened has had these distributional effects.

JESSE EISINGER: Yes.

CHRIS HAYES: And this is really one of the most perverse lessons here, which is basically the smaller amount of auditors have been going after the bottom of the wage scale as opposed to the people at the very top.

JESSE EISINGER: This is one of the great outrages is that the audit rate for the wealthy and for the affluent has collapsed much more quickly than the audit rate for the working poor. So people who get EITC, the earned income tax credit, they actually have a better chance of being audited than people making up to $500,000 a year.

CHRIS HAYES: Oh, come on.

JESSE EISINGER: They have a higher audit rate than the affluent. Only the super wealthy get audited at a higher rate than people making $20,000 a year. So the auditing of the working poor has become something that the IRS does more than it ever did before. Its risen as a proportion of its overall audits to 36 percent of what they do. Their total audits are for people making roughly $20,000 a year. So why is this? Well, the earned income tax credit is something that Milton Friedman was a pioneer of, and it's we give people who are working but not making much money, and it really is roughly ... it can go up to $30,000 for a family, but it's mostly, on average, about $20,000 a year. We give them a tax credit. We send them a check.

CHRIS HAYES: And this is why, by the way, in neighborhoods with that socioeconomic income strata, like tax refund time of the year is an enormously important part of the year, it essentially represents a massive fiscal stimulus to the neighborhood-

JESSE EISINGER: Absolutely.

CHRIS HAYES: To families, to overdue debts that people paid, medical debt, buying new clothes, wait until that period. That's why you have the whole scam of these operations charging these outrageous usurious rates on advanced refund loans, right?

JESSE EISINGER: Oh yes.

CHRIS HAYES: Because people need that money.

JESSE EISINGER: There's an enormous amount of scamming. One of the things that Paul Keil, my colleague, has pointed out, which is just mind blowing is that in the spring, February, March is when personal bankruptcy filings go way up. They skyrocket. And it's because the poor finally have money from the earned income tax credit to pay for a bankruptcy lawyer.

CHRIS HAYES: Wow.

JESSE EISINGER: This is a crucial aspect of the year and people get sometimes $2000, $3000. If you're making $20,000, it's 10-15 percent of your overall income for the year, and even though this was a Republican conservative idea initially, and has had bipartisan political support in its inception, the Republicans have turned against it, and they've attacked it, and they've relentlessly attacked the IRS for not policing the supposed fraud in the EITC. So the IRS has responded to this relentless political pressure by continuing to do these audits. Also, these audits are much easier to do-

CHRIS HAYES: Yeah, they're easy.

JESSE EISINGER: They're automated letters. When you audit a super wealthy person, that person might have trusts and foundations and overseas operations and LLCs and all sorts of interlocking ownership and gift tax, and you need a human being or human beings to look at that. It's incredibly work intensive and time consuming. Those EITC audits can go very quickly. So that's why people are audited at a higher rate. Now, the working poor is audited at a much higher rate than even people making, as I say, up to $400,000 a year. There are people who don't file their taxes. The IRS used to go after them, they're called non-filers, and they used to go after about two million a year, and now they go after about 300,000 a year.

CHRIS HAYES: Wow. These are non-filers who are not owed a refund, we should note.

JESSE EISINGER: Yeah, not owed a refund.

CHRIS HAYES: Right.

JESSE EISINGER: Non-filers not owed a refund, they owe taxes, and the IRS doesn't even chase them down.

CHRIS HAYES: Wow. They used to do two million. Now they're doing 300,000.

JESSE EISINGER: Yeah.

CHRIS HAYES: It's like you can just role the dice and not file your taxes.

JESSE EISINGER: Well, we have tax lawyers in the article saying it's a great time to cheat on your taxes. Tax debts expire after 10 years. Roughly several hundred million used to expire in 2011 on average in years past. Now it's eight billion in the most recent year.

CHRIS HAYES: Wait a second. What you're telling me is that eight billion dollars of proper government revenue vanished.

JESSE EISINGER: Assessed government taxes. People owed them. They know who it is and it just vanished because they can't collect it.

CHRIS HAYES: Eight billion dollars.

JESSE EISINGER: Eight billion dollars last year.

CHRIS HAYES: That's a lot of money.

JESSE EISINGER: Yeah. A billon here, a billion there.

CHRIS HAYES: You could probably build a wall with that.

JESSE EISINGER: And have money leftover.

CHRIS HAYES: Right?

JESSE EISINGER: I don't know about concrete, but steel. So the big beneficiaries are the wealthy and giant corporations. The audit rate for giant corporations has plummeted. It used to be that the IRS continuously audited all large corporations every single year. And in fact the percentage of large corporations that were being audited was over 100 percent because many large corporations were being audited for multiple years at a time. Now it's down to about 80 percent. So now big companies are not even audited every year, but that actually masks how bad it is because the audits have become much thinner. So there are fewer auditors assigned to each large corporation and they look at fewer issues. So they've tried to come up with these efforts to deal with the budget cuts and one is kind of announcing campaigns. We're going to look at this issue, we're going to look at that issue.

So they don't really audit the entirety of a tax return anymore. They just kind of focus in on one or two issues. Reinsurance. A reinsurance scam, and whether you're doing that. So if you're a corporation, you look at those things and clean up those areas and then go on and it obviously incentivizes taking big risks-

CHRIS HAYES: Right because it's all just ... Because this is basically all civil, right? At the corporate level, it's mostly all civil.

JESSE EISINGER: It's worse than that because it's all civil and even though the civil side has the ability to assign penalties for being aggressive about the taxes, basically the IRS doesn't like to penalize companies. And so even when they-

CHRIS HAYES: Well that's nice of them I guess.

JESSE EISINGER: It's lovely of them. That makes the fight over the tax bill even harder and they're looking to resolve these disputes and so they back away from penalties. And so if you're a corporation, the present value of money is pretty important. If you have to pay a tax bill today or you can pay it in 10 years with no penalties, same amount, why would you not?

CHRIS HAYES: And if they're not going to assess fines, you're just running a cost benefit about compliance.

JESSE EISINGER: Yeah, exactly.

CHRIS HAYES: There's no moral duty that's entering here and there was no criminal exposure unless you're doing something really gnarly.

JESSE EISINGER: Right. There is no moral duty, although there is a norm of behavior that ... We were just talking to an Oregon economist, Kim Clausing, the other day who was pointing out that companies didn't always act this way. And that in fact some companies use to kind of take pride in paying taxes. And in Japan you see this a lot where companies actually do take pride in how much they're paying in, because they think, "We are big contributors to society."

CHRIS HAYES: Right.

JESSE EISINGER: And so the norm around corporate taxation has really collapsed. It started in the eighties and nineties where tax departments transformed from places where you had to pay your taxes that figured out how much tax you had to pay to profit centers. And that really kind of GE was the pioneer of this, Jack Welch. And then many, many companies, most companies followed this where they expected their tax department to be a profit center. And because of that, now they see tax avoidance as their obligation to shareholders. Because we have an idea that companies are supposed to be only run for the shareholders.

CHRIS HAYES: And this is all happening, and the other thing that's happening here and the sort of global sense is this massive ... We saw some of it in the Panama papers. We've seen economists increasingly talking about this, that just the rise of the global network of tax havens and the inability of states, not just the U.S., across both the OACD and outside of it, to collect taxes on the richest citizens who now have this extremely vibrant, burgeoning industry that exists in the world of places to park tax free dollars.

JESSE EISINGER: Yeah, exactly. So, the Obama administration actually cracked down on this. They passed a law. Congress passed a law very quickly with relatively little debate called FATCA. FATCA required American citizens to reveal any overseas money they had, any overseas bank accounts. And moreover, they required banks, overseas banks to report to the IRS how many accounts they had from American citizens. This was a kind of game changing law. Very far reaching. And there's been zero enforcement and implementation of it eight years later because of the budget cuts.

CHRIS HAYES: They just don't enforce the law?

JESSE EISINGER: So they do not enforce the law. So the IRS essentially has no capacity to get the banks to comply with the law. And banks have deluged the IRS with information in a way that is unusable, and the IRS doesn't go through it.

CHRIS HAYES: So you can just keep your stuff hidden.

JESSE EISINGER: Right. Now what happened was they have moved it. So the impetus for FATCA was breaking the back of Swiss bank secrecy in the aftermath of the great financial crisis.

CHRIS HAYES: Yeah. I want to stop you there because I want to tell a funny story. The Swiss bank secrecy, which is that I was taken on a junket to Switzerland. It must've been 2009 or 2010 by this young American Swiss Foundation. It's a nonprofit that believes in Swiss-American partnership. It was actually started by a former ... Reagan's ambassador to Switzerland. A really interesting woman named Faith Wittlesey. And they brought us there and it was this incredibly lux trip and it was us, some Americans and some Swiss. Young leaders. Different industries, really interesting folks. Water hydrologists and then corporate folks and dancers and a member of parliament and things like that. And one of the first nights we were in Geneva and it was the head of the Swiss bankers association, who I think paid for our dinner and gave us a long speech about how great the Swiss banking system is. How it basically gets a bad rap, particularly after 9/11. But like, "Really it's a great system. We all have personal liability for what we do and that's like the check." That was his big thing. "We all have personal liability so trust us, we're not doing anything untoward and it's really important that…”

JESSE EISINGER: Certainly could trust them to keep your money.

CHRIS HAYES: Preserve the Swiss banking system. I just remember saying, "This is not a subtle play here."

JESSE EISINGER: Yeah, I mean it is one of the kind of unsung stories of the Obama administration. I'm very critical of. And they were not good about cracking down on corporations, but they did actually do this kind of incredible thing with Swiss bank secrecy. And then they pass FATCA in response to figuring out that all these Americans had secret bank accounts in Switzerland, and then because there's been no enforcement, there has been no reduction of overseas money at all.

So Gabriel Zuckerman, a Berkeley economist, calculates this and he says that all the money is just moved to places like Singapore. So there's been zero effect from this incredible enforcement effort, and new law, eight years later, 10 years later.

CHRIS HAYES: It sort of brings us to the more profound point here, which is a little bit of where we started about the equal justice under law idea. The idea of the law being equal to everyone. To the person making $20,000 and the person with $200,000,000 in assets. And also the existential question of whether a state can collect taxes. Whether the state is more powerful than it's wealthiest citizens or whether those wealthy citizens are more powerful than the state when it comes to the elemental question of whether they will pay for the state.

JESSE EISINGER: Yeah, I think we are eroding the rule of law. We're eroding the basic legitimacy of our democracy through this, through not being able to collect our taxes, through a lack of corporate law enforcement, white collar enforcement, which is what my book is about. We talk about inequality in this country and most of the time we're talking about wealth and income inequality, but I think this impunity to commit crimes and impunity to evade your responsibilities as a citizen, that's a greater prerequisite.

CHRIS HAYES: And your book, "The Chickenshit Club," is about the Justice Department and the Obama administration really failing to pursue and prosecute white collar financial crimes. And a crisis.

JESSE EISINGER: Right, although I'm trying to make a broader argument, which is that this was not just about the financial crisis and not just about the big banks. That this was building before that and persistent today, and affects our ability to prosecute. We've lost the will and ability to prosecute top corporate executives from not just big banks, but pharmaceutical companies, industrial companies, tech companies. The list goes on. I think Mueller is pointing out that whole swathes of the economy are going unpoliced in white collar world.

CHRIS HAYES: This is where I wanted to end up, which is that when you look at the Mueller stuff ... I mean Manafort and Cohen are great examples. Manafort's just doing this stuff out in the open. He's undertaking wildly sketchy and red flag raising financial and real estate transactions that WNYC reports on just from public records. They say, "What's up with you buying an all cash brownstone then taking out a mortgage against that?" No one does that except if they're money laundering, and then lo and behold, it shows up in the Manafort indictment that that's exactly what he was doing.

Paul Manafort arrives at U.S. District Court in Washington on June 15, 2018. Jonathan Ernst / Reuters file

And then you look through all the buildings, and all the apartments, and all of these towers that dot the skyline of the city of New York and Manhattan, blocks away from where we are, all purchased by LLCs, all sitting empty, all essentially places to park money and this sort of just general knowledge everyone has that, yes, these are all vehicles for people either to evade taxes or to launder money and this is a huge part of the money flows that come into the real estate markets in places like Miami and New York and it's a lot of foreign money. And this just kind of universe of like, yeah, that's just the way it is.

JESSE EISINGER: Yeah. I've realized that I actually underestimated the problem in my book. What Mueller's revealing is high-end real estate, campaign finance, corporate and political lobbying turned out to be rife with criminality are it's not policed.

CHRIS HAYES: Yes. I think in the case of Manafort, who's been doing this out in the open and Michael Cohen, but then there's also the question of the president also just surrounded himself with crooks. It's a special group. I don't think if you just picked a bunch of people at random-

JESSE EISINGER: I agree that there is a special group of criminals that he has surrounded himself with. But I think that if you ... There are also people like ... Skadden Arps partner pled guilty for doing a whitewash for an oligarch. For a report. Skadden Arps is as legitimate, as white shoe is against. They are a hyper degree version of what's going on. This is a technicolor version of what's going on every single day in corporate law enforcement. Big law exists now to do internal investigations of corporate wrongdoing. The dirty secret of corporate law enforcement is that the Department of Justice has outsourced its law enforcement to big law who do these internal investigations at the company. So the companies are enforcing themselves, paying for the enforcement of their own investigation of their own wrongdoing.

So yes, Manafort is particularly egregious. And how did he get away with it? Well, one of the ways he got away with it is that we've gutted law enforcement. Tax evasion law enforcement.

CHRIS HAYES: Yeah the guy was just evading taxes for a decade.

JESSE EISINGER: Blatant, blatant.

CHRIS HAYES: Just in front of everybody's face.

JESSE EISINGER: It was not sophisticated. It was not complicated. It wasn't built on a lot of arcane and difficult-

CHRIS HAYES: No he was just stealing from the government.

JESSE EISINGER: He was stealing from the government. And so was Michael Cohen, just not reporting income and we don't audit-

CHRIS HAYES: Cohen's even-

JESSE EISINGER: It's a simpler-

CHRIS HAYES: It's simpler-

JESSE EISINGER: Oh yeah. Much simpler. Yeah what are you talking about?

CHRIS HAYES: I've got nothing.

JESSE EISINGER: Exactly. So how much is out there? I don't think we know. So the idea that only the people who Trump is surrounding himself with, I don't think we know. I just don't think we're policing these arenas whatsoever.

CHRIS HAYES: Jesse Eisinger is a Pulitzer Prize winner. Which by the way, nice work.

JESSE EISINGER: Thank you.

CHRIS HAYES: Senior editor and reporter at ProPublica. He's the author of "The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives." And he co-wrote “How the IRS Was Gutted” for ProPublica in The Atlantic. And there's going to be, my understanding, more right? Coming in that series.

JESSE EISINGER: Yes, for our sins. We're going to keep reporting on this-

CHRIS HAYES: Grindingly boring, but not the product they produce. He takes it on. That's his cross to bear is the dullness. Jesse, this is great. Thanks a lot.

JESSE EISINGER: Thank you.

CHRIS HAYES: Once again, my great thanks to Jesse Eisinger. You can check out his reporting, and his colleagues reporting at Propublica.org. They're actually doing more stories on this beat.

Also, if you enjoyed that conversation, there's a few others you might want to check out, if you haven't. Zephyr Teachout, and I had a great conversation about corruption, which I think fits in really well with some of the themes Jesse and I got to. And there's two conversations we've had recently on what effective public administration, good bureaucracy looks like, which is a topic I'm somewhat obsessed with: Aaron Gordon and I spoke about that with regards to New York City subway, and Abdul El-Sayed and I spoke about that with regards to the American healthcare system and what instituting Medicare for All would actually look like if you wanted to do it the right way. Both of those are related and interesting.

All right, we've got big, big news. Feb. 24, Sunday night in New York City, I'm interviewing Stacey Abrams fresh off her response to the President’s State of the Union for the Democratic Party. She will be in New York live with me. We're having this conversation. We have sold all the tickets. They went real fast, real fast like way ... Tiffany knew this. She knows everything. She knew they're going to go fast. I was a little more skeptical. I don't know what you guys, you guys like me? I don't know. It's out there in the dark. I can't see you. Only way I get feedback is if we sell at our shows. You made me feel good about myself. Thank you. It's important in selling out the shows. But we did reserve five pairs of tickets to give away to lucky WITHpod listeners who were unable to get tickets.

We're giving away five pairs of tickets to the CCA rooms live recording of why this happened. It's going to recorded on Sunday, Feb. 24, at 6 p.m. at the Gramercy Theater in New York.

If you are one of our diehard fans who missed out on the sale send us an email at WITHpod@gmail.com, use the subject “Abrams tickets,” A-B-R-A-M-S tickets. Just include your name in the body of the email. What we're going to do is we're going to get all those emails, we're going to pick five winners at random who get two tickets each to come join us at the Stacey Abrams live edition WITHpod. If you live in New York or plan on being the area send us that email by Friday 12 p.m. ETE, Feb. 15, and then we will pick, and we will let you know if you won.

Thank you again for all your participation, for your interest in this. We're going to do more. We got big plans. Always big plans in the WITHpod studio here.

Ready. Disclaimer. No purchase necessary void where prohibited. Only open to those residing or located in New York, or 18 years old, or older. Limit one entry per person. For official rules and procedures, visit our own Facebook page.

You can always email us or tweet at us #W-I-T-H pod, WITHpod.

Featured Links:

"How the IRS Was Gutted," by Paul Kiel and Jesse Eisinger

"The Chickenshit Club," by Jesse Eisinger

Why Trump’s Corruption Matters (Aug. 21)

What it'll take to fix the NYC subway system (Jan. 29)

Making the case for "Medicaid for all" (Oct. 23)

"Why Is This Happening?" is presented by MSNBC and NBC News, produced by the "All In" team, and features music by Eddie Cooper. You can see more of our work including links to things we mentioned here by going to NBCnews.com/whyisthishappening.