The 60 Minutes Grover Norquist segment Sunday evening and a little follow up research on the Web led me to the conclusion that Mr. Norquist might have had a pretty good idea, when he was a kid, when even liberals were fiscally conservative, and when federal spending deficits were very small, about applying political pressure to stop tax increases as a means of shrinking government. However, the willingness of Congress to borrow excessively and spend recklessly and accumulate debt with no reasonable repayment plan has rendered his no tax pledge not just meaningless but destructive. It is not excessive tax revenue but irresponsible spending that is destroying our economy.
This chart, which includes only (personal and corporate) income taxes (the pledge target) and not Social Security and Medicare taxes, illustrates the point. (The small dotted line is total Federal Revenues.) Mr. Norquist and his pledge signers might have been feeling pretty good at the turn of the century when Messrs. Clinton, Dole, Gingrich, and Lott had reduced government spending even as the dot com boom had boosted income tax revenues without any increase in marginal rates, but should be suffering some indigestion now trying to swallow the growing national debt.
The Norquist idea of threatening well-funded primary opponents for any Republican congressman who fails to sign or signs and then violates a pledge to, “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," might have made sense for conservatives in an era of fiscal responsibility but the battle has been lost to big government liberals, Republicans and Democrats included, who have continued to make spending promises that cannot be kept and approve budgets that can never be balanced.
The primary objective, after all, of Norquist and his backers was to shrink government “until it is small enough to drown in a bathtub.” Stopping income tax increases was just a means, and that means has demonstrably and spectacularly failed to achieve the primary objective. It is time to abandon that plan, and all that is required is for the 277 pledge signers to caucus and agree to offer to renounce it…as a negotiating tool.
I hasten to say that I have no doubt that aggressive compliance with the second half of the Norquist pledge, elimination of deductions and credits with equivalent reductions in tax rates, could, if spending were controlled, result in a significant boost to the economy, higher growth rates for GDP, higher federal government tax revenues, and long term reduction of debt as a percent of GDP. Mr. Norquist is a very smart guy and has probably spent a lot more time thinking about such issues than most in Congress. He understands the issues and does not have to worry about winning the next election. But such a move, including elimination of the home mortgage and charitable contribution deductions and all other special treatment for small businesses, corporations, individuals, and farmers, would require simultaneous wise and courageous cooperative acts on the parts of both Democrats and Republicans. That would be a miracle for sure. It is much easier and better for their individual political careers, dependent on often clueless voters, for Democrats to demonize Republicans for the tax pledge and Republicans to demonize Democrats for big spending.
So, given the complete failure of the original Norquist plan to shrink government, my suggestion to him is to regroup and call a meeting of all his pledge signers and tell them to put on the table a willingness to accept 5% higher personal and corporate tax total revenues if all the deductions and credits for individuals and corporations are eliminated and marginal tax rates are reduced. Since foolish pledge signers have granted him all this power, maybe someone will sponsor a Norquist/Obama debate. They are both Harvard graduates, after all and should be able to clearly explain and defend their positions.
If only Mr. Norquist had decided in the mid-1980’s to attack federal spending increases rather than federal tax increases…