Pledging to not reform taxes

I don’t think many people realize how incredibly inflential Grover Norquist is. In the book The Benefit and the Burden Bruce Bartlett titled one chapter “If tax reform happens, it will be because Grover Norquist permits it.” It is not a compliment. Rather the chapter explains that Norquist is the single largest barrier in the nation to successful tax reform. Grover Norquist is, ironically, the founder of Americans for Tax Reform, and the author of the Taxpayer Protection Pledge which nearly all Republicans sign.

So why is Grover Norquist the single most powerful voice in tax policy? First, let’s talk about tax reform. There’s no ironclad definition, but it generally means removing complications and market distortions in the tax code. The last major tax reform happened in 1986, and since then a lot of deductions, exemptions, credits and complications have been added. Some of those have proven useful, others have outlived their purpose, some of them never worked quite properly, and others had unintended consequences. The purpose of tax reform would simply be to evaluate those changes and remove as many as possible to restore some of the simplicity that their addition has cost. Not only would it make doing taxes simpler, it would make then more fair and allow the market to function more properly.

Norquist has so much power because of his anti-tax pledge. Signing his pledge offers an advantage in winning Republican primaries, and breaking it tends to lose candidates elections. This has made signing and keeping it essentially a requirement for most Republicans. So what does it say? Essentially, the candidate will oppose any increase in tax revenue. It is a pledge not to raise taxes, but it is also a pledge not to remove any element of the tax code that would result in more tax revenue. It is a line in the sand opposing the government taking in any more money, regardless of spending or deficits.

Since the majority of changes to the tax code are credits, deductions or other breaks, this has the effect of completely disallowing tax reform unless it is accompanied by equal government cutbacks. This ties together two completely separate issues: tax reform and cutting government spending. Worse, it does so in a way that allows no compromise. Tax reform has historically been aimed at being revenue neutral, a goal impossible under Norquist’s pledge because every adjustment must be offset by spending cuts rather than other tax adjustments. Broadening the base is a very common conservative goal, but no matter how much they claim to support it, those who have signed this pledge have agreed to vote against any reform that doesn’t also include very large spending cuts.

The intended purpose of his pledge, according to Norquist, is to starve the beast, or to use a crushing deficit to force a significant reduction in the size of government. Unfortunately, it seems that as spending levels and taxes become disconnected voters have lost appreciation for the cost of government programs and the opposite has happened. The lower taxes get, the more deficit spending voters want. As Dick Cheney put it, “Reagan proved deficits don’t matter.” This view of taxes also distorts understanding of government spending, encouraging politicians to hide spending in the tax code. In fact, following Norquist’s logic allows politicians to increase spending and call it tax breaks.

I know some people will read this and take away that all politicians are corrupt and feel some mix of anger and despair. I can’t blame them for that, but it is very much not my point. My point is that people like Norquist must be opposed. We, as citizens and voters, must be better informed. As I noted earlier, Norquist has the incredible power he has because his tax pledge works. I do not believe that is inevitable. I’m sure that if people are informed, if they understand how flawed that pledge is, it will become a political burden rather than an asset. And if that happens Norquist will no longer have the power to prevent tax reform.

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