Entries Tagged as 'Grover Norquist'

Who Made Norquist’s Pledge Sacrosanct?

November 30th, 2011 at 11:14 am 191 Comments

Grover Norquist’s Taxpayer Protection Pledge is not even 100 words long, yet it has been blamed for gridlock in Congress and for making it impossible for Republicans to make any constructive negotiations and compromises over the budget. Because of the importance of the pledge (which commits politicians to never raising income taxes) AEI hosted a debate between Grover Norquist of Americans for Tax Reform (ATR) and New York Times columnist Ross Douthat.

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If Every Job Required a Pledge

August 22nd, 2011 at 3:09 pm 12 Comments

The new school year is almost here. Teacher assignments should be coming out soon. I hope my daughter gets the teacher who has signed the pledge. You know, pharm the one that says that while in the classroom, the teacher will never, ever deviate from the textbook. I think it’s called: The Textbook Protection Pledge.

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Watch: O’Donnell Loses Temper with Norquist

July 28th, 2011 at 10:01 am 20 Comments

Lawrence O’Donnell yells at Grover Norquist, president of Americans for Tax Reform, over the debt ceiling on MSNBC‘s Morning Joe.

Visit msnbc.com for breaking news, world news, and news about the economy

Will the “No New Taxes” Pledge Cause Financial Disaster?

July 19th, 2011 at 9:07 am 26 Comments

The Cato Institute held a debate at the Rayburn House Office Building to discuss whether the Republican Party’s “No New Taxes” pledge is an effective tool for Conservatives’ ultimate goals of shrinking the federal government and restoring fiscal responsibility to Washington.

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Grover Norquist, Alpha Male?

June 18th, 2011 at 9:19 am 12 Comments

J.D. Hamel wrote a great piece here at FrumForum regarding the struggle between Senator Tom Coburn (R-OK) and Americans for Tax Reform President Grover Norquist over the issue of ethanol subsidies.  Norquist is, of course, a longtime fixture on the conservative political scene, so Senator Coburn’s public rebuke of Norquist’s position has gotten a lot of attention.  While the legislative and policy points are well-discussed by Hamel and others, I noticed this rather crass little bit of commentary from Norquist, as quoted in an article by Andrew Stiles at National Review and cited by Jonathan Chait at The New Republic:

Norquist says Coburn’s statements after the vote make it clear that his amendment had nothing to do with ethanol subsidies and everything to do with forcing Republicans to go on record supporting a tax increase — essentially a gateway drug that would inevitably lead to additional increases down the road. “He said, ‘Ha ha, popped your cherry, lost your virginity. Now give me $2 trillion in tax increases,’” Norquist says. “As soon as they voted, he turned around and called them sluts. Guys like that didn’t get second dates in high school.”

Now, I’ve never met Senator Coburn or Grover Norquist, and I don’t have much knowledge about their high school or post-high school experiences.  But it is worth pointing out that Senator Coburn is a very much of an Oklahoma boy-made-good, with a successful career in medicine and business before he entered politics, and he is married to a former Miss Oklahoma.  And Grover Norquist is … Grover Norquist.  The reader can draw his or her own conclusions.

Norquist Loses in Ethanol Subsidy Fight

June 17th, 2011 at 12:00 am 21 Comments

The media largely framed the debate over ethanol subsidies between Senator Tom Coburn and Americans for Tax Reform president Grover Norquist as a contrast between two approaches to deficit reduction: Coburn’s pragmatic willingness to raise more revenue on the one hand, treatment and Norquist’s ideologically-rigid opposition to tax increases on the other.

That’s one way to look at it.

But there’s a better way to look at it: Tom Coburn is the ideologically-consistent conservative, and Grover Norquist is a fiscal phony.

It’s worth remembering exactly what ethanol subsidies are. As “tax expenditures” they redirect money from the US Treasury to a particular group — in this case corn farmers — to provide financial incentives for that group to engage in a certain behavior.

These subsidies, in their superficial aim, inevitably work. Corn farmers receive billions of dollars a year to produce ethanol. This reduces the money they spend on producing ethanol, and thus directly increases their profits and encourages them to increase output.

The problem is that like every other tax expenditure, ethanol subsidies are a direct wealth transfer.

As Grover Norquist is undoubtedly aware, taxpayer dollars don’t grow on trees. The money that pays for ethanol subsidies is confiscated from the American public at large. So while the farm lobby benefits from the expenditures, the rest of us lose in the form of higher taxes or increased deficit spending.

To be fair, ethanol proponents argue that the subsidies serve a valuable function — reducing our dependence on foreign energy sources, or decreasing carbon emissions. I find the first of these arguments unpersuasive, while the second is laughably unsupported — it takes lots of carbon emissions to grow corn, and more to turn it into a workable fuel — but I’ll leave the wisdom of ethanol to the side.

The question of subsidies is another matter entirely. Those subsides, like all subsidies, inherently distort the market. Consumers direct resources to the goods and services that most satisfy their desires, but ethanol subsidies forcibly transfer resources from consumers to farmers. Maybe those resources would have gone to savings, or to investment in more profitable ventures. But thanks to ethanol subsidies, they go to agribusiness.

To call the end of these subsidies — a government transfer program — a tax increase is possibly the most un-conservative argument that I have ever heard.

The only difference between an ethanol subsidy and a welfare payment is where the subsidy goes (the business or the poor person) and how it gets there (through the IRS or some other agency). Does the fact that ethanol subsidies are filtered through the IRS make them some sort of tax cut? Of course not.

But maybe if Obama had filtered his multi-trillion dollar health care reform through the tax code, he would have found an unlikely ally in Grover Norquist.

A further problem with Norquist’s position is its apparent ignorance of our deficit. Starve-the-beast economics may have made sense in the 1980s, but after three decades of the doctrine’s failure, conservatives should know one thing: government programs are almost always paid for by higher taxes or more deficit spending.

And what is deficit spending? Yep, a future tax on people like me. So while I appreciate Norquist’s fulmination against tax increases, I’d appreciate it if he’d transfer that passion to the tax increases that will most affect me — those that are coming because “conservatives” like him won’t take the rare opportunity to eliminate a government spending program.

It is uplifting that the gross majority of Senate Republicans broke with Norquist and joined the real conservative in this fight, Sen. Tom Coburn.

Those conservatives apparently realize that every dollar the government spends is a dollar that someone has to pay back. I hope they continue to realize that fact — and continue to ignore the demands of fiscal phonies like Grover Norquist.

Don’t Forget Norquist’s Abramoff Ties

June 14th, 2011 at 7:17 pm 9 Comments

The Hill today carried a piece observing that Americans for Tax Reform president Grover Norquist has fully overcome his connection to the Abramoff scandal.

The overcoming is apparently so complete that the story does not mention any of the particulars of the connection, consigning the whole incident to the dusty archives. For those who do not remember, here’s a brief reminder of the facts, as related by the final 2006 report by the United States Senate Committee on Indian Affairs:

In late 1999, the Choctaw paid ATR $325,000. In a 2005 interview with The Boston Globe, Norquist said that ATR had sent $300,000 of that $325,000 to Citizens Against Legalized Lottery (“CALL”). Norquist explained that he sent the money to CALL because the Tribe wanted to block gambling competition in Alabama. Out of the Choctaw’s $325,000, ATR apparently kept $25,000 for its services. According to Rogers, Norquist demanded that he receive a management fee for letting ATR be used as a conduit[...]”

Norquist Moves to Nix Bipartisan Debt Plan

April 27th, 2011 at 2:18 am 42 Comments

Can the debt be brought down if the Congress sets targets for how it wants to do it in dollar amounts? That is the theory behind a new proposal offered by the Bipartisan Policy Center which some conservatives are already dismissing because it leaves revenue raising on the table.

On April 21, sick the Bipartisan Policy Center unveiled it’s new “SAVEGO” debt reduction proposal. The proposal is one of several competing ones being offered and attempts to address the nation’s long-term debt crisis. The designers of SAVEGO hope that it can be incorporated into congressional rules in the same way that the PAYGO rules were. The SAVEGO is not the only plan being offered, medical Senators McCaskill and Corker have offered their own plans and Senate Republicans have voted to support a Balanced Budget Amendment which constrained federal spending as a percentage of GDP.

The BPC plan was presented today by former White House Budget Director Alice Rivlin, BPC’s Debt Reduction Task Force members Joe Minarik and G. William Hoagland, BPC Senior Director Steve Bell. From the outset, Rivlin made clear that what set this plan apart from the other ones being offered on the table was that it was designed to empower Congress to set its own targets, make it clear what those targets were, and give congress the ability to act within what it’s members can do to meet its targets.

You have to control something controllable, when the triggering event is a deficit target it doesn’t work very well. [because Congress has limited power over how it sets what specific deficits will be] The lesson of the Budget Enforcement Act of 1990 which worked, was that it depended on things that Congress could control. They could cap spending, they could change entitlement legislation, [and] they could change revenue legislation.

SAVEGO does require the Congress to set a goal of what they want their debt target to be (in the materials provided by BPC, they chose reducing the debt 60% of GDP by 2021 as their example goal). What sets SAVEGO apart from other proposals is that Congress then has to determine by how many dollar amounts it will create savings in every year to reach. This process of choosing to save a particular amount of dollars as opposed to achieving, say a percentage figure, or a figure as part of a debt to GDP calculation is what sets SAVEGO apart. It’s easier for legislators to either raise revenue or reduce spending to achieve a particular dollar amount in savings.

The savings that would need to produced would be further sub-divided into three areas: discretionary spending caps, savings from health programs such as Medicaid and Medicare, and other non-healthcare mandatory spending. The enforcement mechanism for this plan would be to empower the OMB to sequester spending if Congress falls short, and to empower the OMB to sequester in all parts of the budget.

Why has Grover Norquist’s group, American for Tax Reform, already announced that it opposes the plan? Because the SAVEGO proposal does not specify how the savings need to be made, and in fact the authors made clear that the plan allows for savings to be made either by revenue raising or by spending cuts.

When asked about the reception that the plan has received when presented to some legislators, Steve Bell recounted the experience of meeting with the staff of a presumably conservative Republican senator:

We approached a Senator’s senior staffer, his response was ‘it has revenues in it?’ ‘Yes.’ ‘Not going to happen.’ A very short discussion.

Follow Noah on Twitter: @noahkgreen

How Norquist’s Pledge Blocks Real Deficit Cuts

David Frum April 25th, 2011 at 10:39 am 36 Comments

Eli Lehrer has an incisive piece on this page about Tom Coburn’s “Gang of Six” tax proposals. I believe however that the proposals deserve a warmer endorsement than Eli offers.

An important cause of America’s long-term debt problem is the intellectual cul-de-sac into which Republicans have driven themselves. Republicans have accepted a total ban on any kind of tax increase as party orthodoxy. And they have submitted to the authority of Grover Norquist of Americans for Tax Reform to determine what constitutes a “tax increase.”

Norquist takes the view that any action that increases the revenue column of the federal government must be deemed a tax increase – and that such increases are only permissible if they are offset by an equivalent cut to the spending column.

The trouble is that a lot of federal spending – especially the spending done by Republicans – takes the form of tax remission.

The federal government offers a tax credit of up to $9,500 for the purchase of plug-in electric cars. How exactly is that different from writing a check to every plug-in buyer? Yet canceling this program would count as a tax increase under Grover Norquist’s test.

Adopt a child and you can qualify for a tax credit of up to $13,100. You can even get credit for the cost of meals and lodging while traveling in a foreign country to receive the child. You can say a lot of things about this measure. But is it a “tax cut”? Hardly.

Enrolled in college or university? You can deduct up to $4,000 of qualified tuition expenses.

Over 65? Or disabled? Adjusted gross taxable income of less than $17,500? Tax credit for you.

And so on. The point is not that these tax expenditures are all necessarily ill-advised. (It’s genuinely more expensive to be disabled, and public money to help the disabled cope with the costs imposed on them by nature or accident seems a reasonable response by a civilized society.) The point is: they are expenditures, disguised as tax cuts.

This point – so obvious with the smaller tax expenditures – is true also of many of the larger tax expenditures, even if familiarity blinds us to the fact. Mortgage interest deductibility and the tax exclusion of employer-provided fringe benefits: these are subsidies too, no less subsidies for being widely rather than narrowly used.

Yet on the Norquist system and by the Norquist rule, the US cannot address these subsidies contained in the tax code unless and until they are simultaneously matched exactly with other subsidies and benefits that happened to have been framed as outlays. Economically, the rule makes little sense. Politically, it has the job of making deficit reduction twice as difficult as it needs to be. With consequences that …. well let’s leave that for a second post.

Coburn’s Reforms: Brave but Insufficient

April 25th, 2011 at 12:45 am 10 Comments

Tom Coburn, ampoule hardly a moderate or a shrinking violet by any measure, store has effectively “unsigned” Grover Norquist’s pledge not to raise taxes. Coburn’s both right (some taxes may have to go up) and truly courageous (he’s a living example of why tax hikes don’t work). After all, insisting that eliminating any narrow revenue expenditure amounts to a tax hike could make it impossible to reach any sort of agreement on a balanced budget or true reforms to entitlements. That said, two of the details of the Senate Gang of Six Plan that Coburn and others have hinted at — an avoidance of “middle class tax hikes” and efforts to close “offshore tax loopholes” — aren’t very promising.

Middle class taxes first.  While raising marginal rates on existing middle class taxpayers isn’t a good idea, there’s a good case for at least some of the “base broadening” that was the key of Ronald Reagan’s 1986 tax reform. Right now, about 50 percent of the population pays no federal income tax at all. While tax-free status is appropriate for the bottom 20 percent or so of income distribution — many of whom get the Earned Income Tax Credit — it’s problematic to have removed so many people from the tax rolls altogether. Doing so gives people no stake in the country or responsibility for government services. Even in the context of a revenue neutral tax reform, it might well make sense to hike marginal rates (at least) for some people in the middle.

The idea of closing “offshore tax loopholes” sounds attractive but in fact, isn’t really possible, desirable, or likely to be a sizeable source of revenue. First, the United States’ tax system, alone among the G-8’s, insists on worldwide taxation of income. This results in far fewer “loopholes” than any other big country’s tax system and puts American companies and expatriates at a disadvantage in international business. Some efforts to close so-called “loopholes” (such as the one on offshore reinsurance) would actually amount to tariffs that would likely result in retaliatory trade sanctions. Second, many “loopholes” exist simply because American statutory tax rates are higher than those in other countries. International tax competition keeps U.S. authorities and politicians honest. Finally, like anyone with a lot of money, most big companies–particularly those that sell “weightless” but important products like financial instruments and computer software — will be able to figure out ways to “manage down” any new tax liability imposed on them. The result of tax barriers won’t be to punish the big boys but, much more likely, to stop smaller, nimbler competitors from taking market-share. Either way, revenues from any offshore-related tax hikes are likely to disappoint.

Coburn and his colleagues are showing a good deal of courage by putting taxes on the table. But the handful of specifics they’ve offered so far aren’t very promising.