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…
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