Grover Norquist, president of Americans for Tax Reform, is under fire. More than half of U.S. representatives—238—have signed his ATR pledge to not raise taxes under any circumstances. (That includes six of North Carolina’s 13 representatives, all Republicans.) So when the super-committee issues its recommendations next month, either there will be no tax increases or implementation will require pledge violations from 21 representatives.
The notion that higher taxes could be off the table, however, is unfathomable to many. For example, Rep. Frank Wolf (R-W.Va.), one of six House Republicans that have not signed the pledge, has accused Norquist of “paralyzing congress” with ideological purity and working with “unsavory characters.” Evidently, hyperbolic metaphors, exaggerations, and personal attacks remain in vogue, perhaps because the relevant evidence leads us to an altogether different conclusion. (Norquist explains the ATR pledge to Stephen Colbert below.)
Of those who have attempted to address the ATR pledge directly, they express two leading concerns. (1) We cannot maintain the generosity of the federal spending and balance the budget (not that they’ve passed one) without higher revenues. (2) A hard line against any tax increases impedes the closing of many loopholes for special interest groups.
While these assertions are correct, they do not diminish the value of the ATR pledge. Rather, they demonstrate how unwilling both legislators and vested parties are to cut federal spending. In fact, a willingness to cut federal spending would negate both concerns and allow legislators to remain in line with their commitment.
Yes, deficit spending is a serious problem (which I’ve condemned before), but that does not give license to raise or introduce new taxes. Keep in mind that the 2010 health care reform contained 24 new taxes, along with other taxes that have broken President Obama’s own campaign promise. Additionally, federal spending has exploded in recent years, to a higher per-household level than ever before.
If federal officials would only return their spending to 2002 levels, that would eliminate the deficit immediately. Presidential candidate Rep. Ron Paul (R-Texas) has even proposed a plan that would balance the revenues and spending next year while rescinding neither Social Security nor Medicare payments.
The resistance to spending cuts shows how far we have strayed from a limited federal government with enumerated powers, but it also demonstrates the unfortunate “ratchet-effect.” Robert Higgs coined the term to describe the way government spending rises during crisis periods but does not return to its original size. In this way it ratchets upwards in a step-like manner, and it has been doing so throughout American history.
What about inequalities and loopholes in the tax code then? Yes, the spider’s web of privileges and punishments lodged into the United States tax code ought to end as soon as possible. These are shameful redistributions of wealth, and they provide the instrument that central planners need to manipulate constituents. By complicating the tax code, they also stifle economic growth and generate compliance costs. According to one estimate, Americans spend 6.6 billion hours each year completing tax forms.
So do away with them; just lower the overall rates to make the changes revenue neutral and avoid a violation of the pledge. To assert that the choice is between closing loopholes and violating of the pledge is simply a false dichotomy. In other words, the protesting legislators are only willing to do away with loopholes if more tax revenues will flow through their hands.
At the end of the day, those taking the pledge made a public commitment to their electorate. If they did so to get elected, that means voters know that tax rates are already more than sufficient to fund necessary federal expenditures, and they don’t want more forcibly taken from.
Once elected, these legislators cannot simply request to be disassociated from or supposedly forget that they signed it. As noted, there are no extenuating circumstances, so any violations of the pledge shall be, and should be, interpreted as a failure of integrity and self-responsibility. The most notable pledge violator is George H. W. Bush, and we all know what happened to him.
As far as Grover Norquist and ATR go, the only roadblock they generate is one against higher taxes. Rather than harsh criticism, they deserve praise for their work.