Norquist Vetoes Both Deficit Reduction and Tax Reform

According to a report in The Hill newspaper, Americans for Tax Reform president Grover Norquist has received assurances from Republican leaders in Congress that under no circumstances will they vote for any tax increase, either as part of deficit reduction or tax reform. Apparently, the only permissable deficit reduction is spending cuts and the only permissable tax reform is tax cuts. Given that Grover has succeeded in getting all but a small handful of Republicans to sign his no-new-taxes pledge, he essentially controls tax policy by being the sole arbiter of what constitutes a violation of the pledge and what does not. And given the power of the Tea Party to upset incumbent Republicans in primaries when they are viewed as insufficiently loyal to its agenda, it would take a very confident and courageous Republican to risk being accused of violating Grover’s pledge whether he or she signed it or not, since it would guarantee primary opposition from a well financed Tea Party candidate — the Club for Growth will see to that.

Whatever one thinks about the best way to achieve deficit reduction or tax reform, such rigidity is not conducive to action on either front. Indeed, the idea that every provision of the tax code that lowers revenues must be preserved is the opposite of tax reform. But this appears to be Grover’s position. I questioned him myself on this point a few weeks ago. I asked him if he would name a single provision of the tax code that is unjustified and deserving of abolition as part of a revenue-neutral tax reform that would also lower tax rates. Grover was unwilling to name one. He said it was solely the responsibility of the Democrats to come up with revenue-raisers. The only job Republicans had was to cut rates, period. I also questioned a number of other Republican tax experts who were involved in tax reform in the 1980s, and not one would endorse any actual reforms beyond rate cuts.

This is, of course, not the way Ronald Reagan did it. He proposed actual reforms in 1985 that raised revenues to offset tax rate cuts. So did Jack Kemp and Bob Kasten, whose tax reform legislation got the ball rolling. Although ATR was established for the purpose of continuing this work, in practice it would oppose legislation identical to the 1986 tax reform because every actual reform would be condemned as an impermissable tax increase, a violation of the pledge, and grounds for a primary challenge.

• Become A Funded Futures Trader