Month: July 2017

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.