Obstruction, Thy Name Is Grover

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It started with an effort in California to rein in property tax increases. With the enormous growth in population and property values in California reflected in the 1970’s property assessment rates, Howard Jarvis was the organizing force that enabled Proposition 13 to succeed at the ballot box in California in 1978. Proposition 13 froze real estate taxes in California and greatly limited the potential rate of property tax increase allowed. Thus began the revolt against any form of increased taxes that became the mantra of the Republican party since that time.

 

President Reagan in 1981 assumed the mantle of the outsider who decried and denounced the government in his inaugural address. “In this present crisis, government is not the solution to the problem; government is the problem.” He then took the lead in the passage of two significant income tax reductions during his two terms. Yet he wasn’t totally committed as an anti-tax ideologue, since he also oversaw several tax increases that affected social security taxes, and broadened the taxable base, exposing formerly exempt forms of income to the new lower tax rates.

 

This inconsistency from the leader of the Republicans led a 29-year old veteran of anti-communist battles across the globe to create an organization that has hobbled the US ever since its founding. Grover Norquist established Americans for Tax Reform (ATR) in 1985 as requested by President Reagan, and shortly thereafter became the chief evangelist for the philosophical position that all government spending is bad, and that it should become an existential crisis if a Republican politician ever supports a tax increase. Thus began the saga of the pledge, the Taxpayer Protection Pledge, that an overwhelming number of Republican legislators have affixed their signatures to, stating that they will “oppose any and all efforts to increase the marginal income tax rate for individuals and business; and to oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates”.

 

So much of the polarization in Congress flows directly from the pernicious effects of this pledge, and from the personal crusading of Grover Norquist against any attempt to increase tax revenues, either at a federal or a state level. Indeed, the state of Kansas attempted to follow the guidance of Norquist and fellow economic guru Arthur Laffer by slashing their income tax rates in order to unleash a supply-side revolution at the state level. Five years later, with the state hobbled by the unforeseen consequences of the tax reductions, the legislature of Kansas overrode their governor’s veto of tax increases in order to restore the functioning of the state government at a minimal level. Governor Brownback is not chastened, though, and still champions the same tax slash and burn strategy for the Federal government.

 

Grover Norquist’s penchant for bullying recalcitrant Republicans is straight-forward. As the Washington Post quoted Norquist in a July 12, 2011 story, “There are times,” he boasted, “when we’ll call everybody in the congressional district and let them know that one guy signed the pledge and one guy didn’t.” Indeed, the reluctance of Republicans to seriously address needed fiscal remedies stems from the likelihood that ATR and other political organizations spawned from ATR vitriol will cause the emergence of a well-funded primary opponent in the legislator’s next race. It is well known that the influence of Grover Norquist and his pledge was one of the main reasons why the bipartisan effort to address deficits and spending in 2011 through the super committee came to failure. See this 2011 editorial from the New York Times for a contemporaneous perspective:  http://www.nytimes.com/2011/11/22/opinion/republicans-are-endangering-national-security.html  Thus came into effect that blind ax swinger called the sequester that has run amuck over the past few years, slicing both defense and discretionary spending.

 

In less partisan times, the two parties could actually work together to have a legitimate debate about the true size and function of a government. We could make longer term plans to address the deferred maintenance of our US infrastructure. We could discuss ways to reduce safety net spending by improving workforce participation rates and labor skills. We could discuss how to encourage entrepreneurship and reducing artificial barriers to entry caused by state licensing requirements for many trades. But the hyperbolic partisan wrangling wrought about through generations of adherence to a flawed political philosophy means that the worst threat that Senator McConnell can issue is to force the Republicans to work with the Democrats on health care legislation. After all, as Grover has said, bipartisanship is “date rape”.

 

There are many areas where legislative efforts involving both parties should bear significant fruit. Indeed, overregulation has become a problem, although the wholesale shredding of environmental regulations will only bear toxic fruit. We desperately need a longer term program of infrastructure repair and replacement. We do need to simplify the tax code and reduce the nominal top business rate in order to improve our competitiveness in a global economy.

 

But with the political discourse from one side beginning and ending with the phrase, no additional taxes, we cannot move forward. I put forth the proposition that Grover Norquist is one of the most dangerous people in politics, and that the culture of absolutely no compromise allowed has poisoned political discourse. Only when politicians are able to overcome the siren song of simplistic solutions like the Taxpayer Protection Pledge will we be able to begin to fix the myriads of problems we face in this nation and in the world. Look at what 30+ years of adherence to this pledge has achieved! You tell me if we are on a sustainable path given the childishness we face in our politics.

 

There are indeed legitimate roles for a government that cannot be met by private sector solutions. And taxes, instead of being viewed as money stolen from individuals, represent the price we incur to live in a civilized society, rather than living in an anarchic world where strength is the only security available to men and women and children. I worked in the corporate world for 40 years. I do not want totally unfettered capitalism where there are no rules and anything goes, because in such an environment, we all lose.

 

 

Originally posted on my blog at https://evenabrokenclock.blog

Comments

Ari Silverstein Added Jul 6, 2017 - 12:42pm
Expanding the tax base while lowering rates is not inconsistency, it’s the proper way to structure a tax code.  The current tax code has so many exemptions that the rich and upper-middle class pay a higher percent of the overall tax haul than ever before.  This is why Mitt Romney’s 47% remark, while painful to his chances of getting elected, is true.  The reason it’s the proper way to structure a code is that taxing the rich is unfair and un-capitalistic.  It also ensures that more people have skin in the game, meaning more people will care how the government spends our money.  Currently few people care because so few of us have any skin in the game. 
Even A Broken Clock Added Jul 6, 2017 - 2:19pm
Ari, I definitely agree that simplification of the code is the key so that it can result in lower nominal rates, and still result in increased revenues. I maintain that we have punted the can down the road so many times, we must begin to address some of the deferred maintenance in order to keep a functioning society. That means increased expenditures are needed, and we also need an increase in revenues in order to prevent the accumulated debt from overwhelming us (if that is even possible).
 
The problem with Romney's 47% remark was that it was, like Hillary's designation of the deplorables, extremely condescending to a huge segment of the population. What Romney did not acknowledge was that even if folks did not explicitly pay income tax, they still had obligations under the tax code for payroll taxes. So I would argue that most do have skin in the game, especially since all funds in the treasury are fungible.
Jenifer Frost Added Jul 6, 2017 - 3:46pm
Norquist and his faithful braindead goon squad are complete and total liar hypocrites. Their so called pledge only applies to the rich. None of them ever saw a tax increase on the poor or working people that they ever had a problem with. Total class warfare thugs. 
George N Romey Added Jul 6, 2017 - 3:53pm
The last thing the so called tax reformers want is tax reform.  Their little precious goodies in the form of tax avoidance would go way.
Ari Silverstein Added Jul 6, 2017 - 4:29pm
I think the tax code should be simplified the same we Reagan simplified it.  In other words, he lowered the rates and broadened the base by eliminating the loopholes/deductions.  In addition, and most importantly, Reagan did not raise the overall tax haul from these changes.  That is why I commented to you.  You made it seem like Reagan was a tax-hiker and that is false. 
 
I agree that we’ve punted the can down the road, but increased expenditures is the can.  We need to rein in spending as the government is out of control.  We do not need increased taxes, the government is extracting more money via taxes than ever before. And please stop calling taxation “revenue.” 
 
The problem with your critique of Romney's 47% remark and Hillary’s deplorable statement, is that the former is accurate and the latter is a slanderous opinion. 
John G Added Jul 6, 2017 - 6:29pm
The current tax code has so many exemptions that the rich and upper-middle class pay a higher percent of the overall tax haul than ever before. 
What? Are you mad?
John G Added Jul 6, 2017 - 6:32pm
We need to rein in spending
Yeah, we really need to go into recession with a dose of deflationary depression.
Government spending creates the money that pays the taxes. 
Why can't people understand that?
Jenifer Frost Added Jul 6, 2017 - 6:33pm
No, he's not mad John. Ari is just a boldfaced liar and hopes that readers will be too gullible to learn the truth. 
John G Added Jul 6, 2017 - 7:01pm
Most of the right wing nuts ff both colours believe these fallacies Jennifer. They have been conditioned to believe that government finances are the same as households and they are trained to avoid thinking about money creation.
 
Even A Broken Clock Added Jul 6, 2017 - 10:13pm
What I'd like to see is a perspective of the federal receipts (yes, Ari, revenues) as a percentage of the GNP. Regardless of whether you think GNP is a valid measure of US economic activity, it should serve as a benchmark.
 
What it shows is that federal revenues as a percentage of economic activities has been below the baseline ever since Bush the illiterate denied economic reality and put the Iraq and Afghanistan wars on the Visa.
John G Added Jul 7, 2017 - 12:19am
EaBC Bush the illiterate denied economic reality and put the Iraq and Afghanistan wars on the Visa.
Bush was indeed close to illiterate but economic reality is that the Federal government has what amounts to an unlimited credit card that it never ever has to pay off.
And every time it spends, the private sector receives income. And what it doesn't tax away, the private sector keeps as its savings.
Reality can be a little different to what you imagine.
Not that Bush or Ari understand either but there you go. That's how it works.
Bill Caciene Added Jul 7, 2017 - 8:05am
Don’t blame Grover Norquist for what Republicans choose to do under their own free will.  Republicans believe that low taxes is one of the key features to achieving high economic activity and with that, all sorts good ancillary benefits are to be realized.  What liberals will always fail to realize is that the government is inefficient, corrupt and downright wasteful.  So it makes complete sense to starve the beast.  Liberals also fail to realize that people are much happier when they earn their keep versus when they are dependent on others.  It should also be noted that Norquist supported a tax hike in 2012.
Even A Broken Clock Added Jul 7, 2017 - 10:48am
Bill, I will disagree with you on your absolutist statement that government is inefficient, corrupt, and downright wasteful. I do agree that it always has the potential to be all of those things, and that is why we need an independent press and other watchdogs to expose those sins of government.
 
There are some functions of maintaining a civilized society which can only be done by the body of the whole, because they do not lend themselves to a commercial entity taking on the responsibility.
 
And I do blame Grover Norquist for creating the climate that denies even the possibility for addressing needs through increased tax revenues.
Dino Manalis Added Jul 7, 2017 - 12:39pm
 We're overtaxed at the federal; state; and local levels, the problem is we spend too much, I'm especially concerned with property taxes, because they've become an increasing rent to the municipality.  They're anti-property rights; anti-development; discriminate against poor school districts; and prevent poor and middle class families and seniors from owning property.  People should pay something locally, but most municipal expenses ought to be paid with state revenues!
George Kocan Added Jul 7, 2017 - 1:47pm
Grover Norquist is a saint in my estimation.  As the government increases taxes, it grows in power.  Socialists and fascists like that.  They have created a system where tax cuts do not exist.  A compromise means the tax goes up 4% instead of 5%.  The socio-fascists (Democrats) have created a racket.  They buy votes with tax money.  They spend more than they have, then raise taxes to cover the increase.  In Illinois the Dems have driven the state into near bankruptcy.  It economic output is near the bottom compared with the other 49 states.  In fact, the lowest five states are all run by Democrats.  People are leaving Illinois in droves, leaving the tax base poorer and smaller.  The Dems do not care.  They just forced a permanent tax increase of 32%.  They will do this again, again.  Years ago, FDR's top man, exposed the racket as he bragged about it.  Harry Hopkins said, "We will tax and tax, spend and spend, elect and elect."  These guys deserve prison time.
Louis Giokas Added Jul 8, 2017 - 8:16pm
Your comments about Regan and the tax cuts and increases in disingenuous.  I am not a supporter of big government.  On the other hand, Social Security and Medicare are essential benefits that many, many people rely on.  You cannot have private insurance for older people in the current structure.  Almost no one would be able to afford it, and this is when most healthcare spending takes place for most individuals.  Keeping these programs solvent and in good shape is essential to large parts of the population. Actually, that is incorrect.  It is essential to effectively everyone at some point.  Taxes for discretionary programs are different.  The level of those programs, and the split between public and private spending, is the chief policy difference between various political movements.  These "discretionary" programs are just that.  There are extremes on both sides, but this is where the debate really is.   This debate has many dimensions, and Regan had his take on it. 
 
I was at a Republican event some years ago where Norquist was the main speaker.  Solvency for the FICA programs is important, and there are even choices that can be made in addressing that issue.  If we don't change the programs in any fundamental way, then there are very straightforward solutions to solvency.  On the other hand, we can change the programs somewhat, both in funding and benefits, and this makes for a more complex equation, but not one that is impossible to determine or understand. 
Even A Broken Clock Added Jul 8, 2017 - 10:34pm
Grover, I invite you to examine some facts as to the actual rates of taxation over the past two decades. Due to the ill-conceived tax cuts from W., and his expansion of the expenditures due to placing the Iraq and Afghanistan conflicts outside of the budget process, and then coming up with the expansion of Medicare drug coverage without providing the government the ability to negotiate drug pricing, you ended up with the perfect storm of deficits leading into the Great Recession. The guys that deserve prison time resided in the Bush II administration.
 
Louis, you raise more subtle points. I also believe that FICA (and indeed medicare) need to be placed on more substantial footing. I've also believed that the large excess in the trust fund (Al Gore's famous lock box) should have been harnessed over the past two decades to provide a source of funding for state and local governments to have done infrastructure improvements. Loaning the SS trust funds to governments at a 3-4 % interest rate would have resulted in making the funds earn their keep by supporting productive activity in the economy rather than just sitting there waiting to become a drag on the economy. Alas, that won't happen now. But discretionary programs are at the lowest percentage of federal expenditures since the 1940's. Is this really the time to cut them back further.
 
I do enjoy this type of discussion because I think we are participating in a civil manner and are bringing up valid or at least serious points. Thanks for your comments.
Bill Caciene Added Jul 9, 2017 - 8:37am
Of course at times government isn’t inefficient, corrupt and wasteful but to the extent it ever is, it’s your and my money that’s being pissed away.  What liberals need to realize is that the government is not a capitalist entity driven by the desire to lower costs.  Accordingly, it’s going to be wasteful, it’s merely the degree of waste that’s in question.  So we’d have a more civilized society if we didn’t target successful people for extra taxation so that poor people get more free stuff. 
 
As for Norquist, I’m not a fan of pledges either, but if I were a politician I would fight tooth and nail to rein in spending and lower taxes, rather than give more money to a wasteful entity like the Government.  So pledge or no pledge, Republicans by and large are attempting to do just that, while Democrats do nothing but devise more ways to spend and tax. 
John G Added Jul 9, 2017 - 3:50pm
your and my money that’s being pissed away. 
 
Nope. That's government money and it is income to the private sector. Reality is a bitch.
Even A Broken Clock Added Jul 9, 2017 - 8:03pm
The purpose of private enterprise is to make money. Thus the incentive to be efficient and spend less. In order to do that, it is necessary to spend capital which is justified on an IRR (internal rate of return) basis. You have to spend money to make money.
 
The purpose of government is to provide a service to the public. Since some of the services must be provided for all citizens in their jurisdictions, there is the potential for inefficiencies in those services.
 
Part of the reason why government is inefficient, especially in this day of rapid technological change, is that the government agencies have not been given the funding to upgrade their technological infrastructure. That has primarily been driven by Republicans with their antipathy to government. Thus we have more employees than would be justified if governmental agencies used a return on capital perspective like business uses. But when the legislative group won't open the purse strings, upgrading and process simplification cannot occur, and thus you end up with inefficiencies.
 
Pay me now or pay me later.  You have to spend money to save money.
John G Added Jul 10, 2017 - 1:14am
Government has always been the biggest driver of R&D and efficiency improvements.
Human ingenuity doesn't require a capitalist over class seeking rent to function.
Starving the government of the resources that it requires to deliver efficiency producing services and infrastructure to the private sector only serves to raise the cost of living and the cost of doing business.
And they do that (starve it of resources) with their deficit and debt terrorism.
Currency issuers don't need return on capital. They are capital.

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