Indiana Gov. Mitch Daniels has now managed to alienate prominent social and fiscal conservatives.
The potential presidential candidate’s already rocky path to the Republican nomination became more treacherous this weekend after the country’s most powerful anti-tax activist and one of the House’s most respected fiscal conservatives disparaged Daniels’ openness to considering a controversial value added tax as part of a larger tax system overhaul.
“This is outside the bounds of acceptable modern Republican thought, and it is only the zone of extremely left-wing Democrats who publicly talk about those things because all Democrats pretending to be moderates wouldn’t touch it with a 10-foot poll,” Americans for Tax Reform President Grover Norquist told POLITICO. “Absent some explanation, such as large quantities of crystal meth, this is disqualifying. This is beyond the pale.”
Taking on his party’s shibboleths is certainly nervy, even for someone who has positioned himself to become the tell-it-like-it-is candidate. The question becomes whether the strategy is savvy or naïve.
Rep. Joseph Pitts (R-Pa.) got 154 House Republicans to sign a letter in May that strongly opposed the so-called VAT, which slaps a tax on the estimated market value for products at every stage of production, after an Obama administration surrogate appeared to float putting it on the table.
Responding to Daniels’ comments, Pitts said Friday: “I don’t think a platform of new taxes on every American employer is what we need from a leader in the Republican party.”
An anti-VAT caucus in Congress counts 69 representatives and four senators as members. Its chairman, Rep. Wally Herger (R-Calif.), said Friday night that a VAT should not be part of fundamental reform because it’s a hidden tax that encourages more government spending.
Daniels sought to limit the fallout caused by his Thursday speech, delivered at a dinner sponsored by the conservative Hudson Institute in his honor. Spokeswoman Jane Jankowski insists he was not officially endorsing anything when he spoke fondly and approvingly of an obscure 1982 proposal by the late nuclear theorist Herman Kahn. She also reiterated that Daniels believes a VAT would be thinkable only as a total replacement of the current tax code and in conjunction with a flat income tax, not in addition to the current tax burden.
Daniels, who was George W. Bush’s first Office of Management and Budget director, was already skating on thin ice after he recently told Newsweek that “at some stage there could well be a tax increase.” He’s been one in only a handful of prominent elected Republicans refusing to sign the No New Taxes pledge, and he’s had the temerity to support tax hikes on wealthy residents of the Hoosier State.
For Norquist, the nuance included in Daniels’ VAT speech just doesn’t cut the mustard. He compared the governor to Republican House candidate Rich Iott, who was condemned last week for dressing as a Nazi in World War II reenactments.
“Ok and the guy in Ohio wasn’t really being a Nazi either. But he was dressing up like one,” Norquist said.
“I think speculating about a VAT is not quite up there with being a World War II reenactor, but its close,” he added. “Even if, in his mind, he was quoting somebody else’s ‘innovative thinking’ or something, it’s just a dangerous zone to go in … It’s playing with fire. And tossing it around causally as an idea is the kind of thing [Newt] Gingrich could do because everyone knows he might change his mind. But, if you’re trying to run as a steady-as-she-goes, solid Reagan Republican, it’s an odd approach.”
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