Grover Norquist Is Living in Candyland
So it turns out that the cure for “epistemic closure” is great quantities of crystal meth. The things you learn from Grover Norquist.
In case you missed it, Norquist came down like a runaway gravel truck on Indiana governor Mitch Daniels, a favorite around these parts. Governor Daniels’s offense was declaring himself open to the possibility that a value-added tax might be an acceptable part of a wide-ranging reform of the federal tax system. Norquist replied, in a Politico interview:
This is outside the bounds of acceptable modern Republican thought, and it is only the zone of extremely left-wing Democrats who publicly talk about those things because all Democrats pretending to be moderates wouldn’t touch it with a 10-foot poll. Absent some explanation, such as large quantities of crystal meth, this is disqualifying. This is beyond the pale.
Here’s the problem: The deficit is, by my always-suspect English-major math, about 36.3 percent of federal spending ($1.29 trillion deficit out of $3.55 trillion spending). For comparison: Defense accounts for about 18 percent of federal spending. So you could cut out the entire national-security budget, and another Pentagon-sized chunk of non-military spending, and not quite close that deficit. You could cut the Pentagon to $0.00 and eliminate Social Security entirely and just barely get there.
Even great heaping quantities of crystal meth would not be enough to convince me that is going to happen.
Don’t get me wrong: In a perfect world, Exchequer would love to see the budget balanced and some tax cuts enabled through spending reductions alone. Exchequer would also like to be dating Marisa Miller, driving a Morgan Aero, and running a four-minute mile, developments that are about as plausible as Congress’s cutting 36.3 percent of federal spending. Not going to happen.
So, our choices are this: 1. Hold out for the best-case scenario, in which a newly elected Speaker Boehner gives President Obama the complete works of Milton Friedman and everybody agrees to cutting federal spending by more than a third. 2. Keep running deficits and piling up debt. 3. Raise taxes. My preferences, in order, go: 1, 3, 2. And No. 2 is not really acceptable.
Like it or not, taxes are going up: If not today, then in the near future. Even once the deficit is under control, that debt is still going to have to be paid down, lest debt service alone overwhelm the federal budget, necessitating even more tax hikes. If Grover Norquist thinks there’s a tax-free way out of this mess that is both politically and economically realistic, he is living in a fantasy. There’s an old joke that goes: Neurotics build castles in the sky; psychotics live in them. And Grover Norquist seeks tax protection for them.
Norquist’s outfit, Americans for Tax Reform, does a lot of good things. (And so has Grover Norquist, over the years.) But here’s how it describes itself:
Americans for Tax Reform (ATR) opposes all tax increases as a matter of principle.
That’s not a campaign against Big Government — it’s a campaign against math. As ye spend, so shall ye tax. Denying that is not a principle — it’s a tantrum. ATR’s pledge reads:
“I _____ pledge to the taxpayers of the __________ district, of the state of __________, and to all the people of this state, that I will oppose and vote against any and all efforts to increase taxes.”
And here is how it should read:
“I _____ pledge to the taxpayers of the __________ district, of the state of __________, and to all the people of this state, that I will oppose and vote against any and all efforts to increase spending.”
Spending is the issue, not taxes. Spending is the virus, taxes are the symptom. Norquistism, by focusing on the taxing side of the ledger rather than on the spending side, has for decades enabled Republican spending shenanigans of the sort that helped put the party in the minority and ruined its reputation for fiscal sobriety; it is of a piece with naïve supply-siderism. The Bush-era deficits, and the subsequent discrediting of Republicans’ fiscal conservatism, are the product.
Give me the grown-up despair of Mitch Daniels any day over the happy-talk daydream that says we’re getting out of this mess without paying for it.
(This post originally appeared on National Review Online)
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May '10
Re: Grover Norquist Is Living in Candyland
It seems to me that giving in to something like VAT now only makes it harder to do away with in the future. It also gives the other side a lot of plausible argument material for the future. The real choice #1 is cut spending, cut spending, cut spending (as you sort of hint at). Or die trying. Maybe Mitch was thinking about doing a temporary VAT deal... I think he did something like that in his state where he got everyone to agree to a few years of tax hike with the understanding that once everything came into place and they got balanced then they could roll taxes back again. Just seems very dangerous on the federal level where the zombies come to stay.
Aug '10
Re: Grover Norquist Is Living in Candyland
The trouble is that the only openness to tax increases we see in the current political climate is toward tax increases on the rich, of whom there are never enough. The only way to close the deficit through taxes is to tax the vast middle class, including a lot of people who are currently entirely exempt from the federal income tax. A V.A.T. is probably the most palatable way to hide taxes from the middle class.
The other trouble is that we know that when deficits go down, politicians spend more. I think we need some major structural revision to remove some of the biases toward spending. A line item veto in the Constitution would be a good start.
Aug '10
Re: Grover Norquist Is Living in Candyland
May I ask some questions about VATs in general?
Also, is it possible that Mr Norquist is simply playing good political poker? Maybe a stubborn insistence that taxes not be raised, ruat caelum, really is the best way to convince the other guys that there is no choice but to cut spending.
Because if I were a politician, it'd be very easy to say, "Sure, we'll cut spending. But let's raise taxes first..."
Then I'd conveniently never get around to cutting the spending.
May '10
Re: Grover Norquist Is Living in Candyland
The VAT is like democracy- the worst system possible except for virtually everything else, which is what led the sainted Wm. F. Buckley to propose it in National Review a good 40 years ago.
But it needs to be established via constitutional amendment, one that concurrently limits its level and reduces income tax rates, while also capping federal spending both in terms of current accounts deficit and as a percentage of GDP. That is the kind of reform Gov. Daniels is likely thinking about, though probably as legislation. Unfortunately, like TEFRA in 1982, you cannot trust Washington, so no VAT should be implemented, period, unless it is constitutionally directly linked to the other reforms/caps.
The virtue of a VAT is that it is essentially a consumption tax, not an income tax, so the flat taxers should be in favor if it is done right. But if it is a statutory add-on to all the other taxes, even at some very low rate (which would inevitably creep up over time as it has in Europe), any conservative should virulently oppose it.
Aug '10
Re: Grover Norquist Is Living in Candyland
A VAT tax is the most insidious, nasty sort of tax there is. It is ripe for mischief because the government can raise it whenever they please and the public is none the wiser.
What Mr Williamson fails to acknowledge is that the government can increase revenue without raising tax rates - it's called GROWING THE ECONOMY! True conservatives know how to do this, which is to shrink government and reduce government spending and regulation.
As long as the federal government insists on social engineering via the tax code we should not give them one more nickel than we already are. A true flat tax with a single rate so that all citizens feel the pain of taxation is the only way to go. If we were to implement a flat tax I would be open to discussing a rate which would increase revenue but ONLY after the budget has been significantly whacked.
Sound difficult? You bet, but deploying any sort of VAT given the current levels of spending and mismanagement at the federal level is insanity....
Re: Grover Norquist Is Living in Candyland
You've got to be kidding me. Conservatives are talking favorably about a VAT? Am I misreading this or am I on another planet? Why do we need conservatives if we want to capitulate to the most noxious ideas?
Re: Grover Norquist Is Living in Candyland
Kevin, you're spot on. I agree wholeheartedly, and not just because Mitch Daniels is my political heartthrob. Growing the economy is of course paramount, but the huge exponential spike in entitlements that's coming in the next 30 years isn't something we can ever grow our way out of.
It's spending, of course, that's killing us, and some politician has to be honest with the American people: we need to cut entitlements, we need to cut spending, we need to reduce the amount of things -- even "good" things -- that the federal government is doing, like farm subsidies and urban mass transit subsidies, and we still won't be out of the hole. We still might be looking at some tax adjustments. A flat tax that's higher than maybe we'd like. A VAT, which I don't know much about yet. It scares me, of course, but unfunded and unfundable liabilities in the future -- 4 old people living off the FICA of one young wage earner, to start with -- scare me a lot more.
Edited on Oct 19, 2010 at 11:30amMay '10
Re: Grover Norquist Is Living in Candyland
Whether we capitulate or not, we certainly shouldn't open with that bid. The guv's proviso that he'd only support it if we went to a flat (why not reduced?) income tax is completely unenforceable, as others have noted. It's like proposing amnesty before enforcing the borders. The order of these enactments matters, cause you can't trust these people an inch.
You're right, Kevin, that spending is the problem. And we've got a big mandate to reduce it. So let's start there and not throw these unhelpful distractions out there. Good Lord, we are the stupid party.
Re: Grover Norquist Is Living in Candyland
If there's one thing we should have learned by now it is that new taxes will be used by the ruling class as a license to spend more, not as a method to balance the budget. If they adopt a VAT do you think they'll repeal the income tax? Capital gains? Please.
We wouldn't be having this discussion if spending hadn't metastasized. That said, I do agree that Republicans ultimately have to tackle entitlement reform. We have to radically reduce discretionary spending in the short run -- or as short as possible, but we cannot ignore the looming entitlement catastrophe. Democrats will inevitably demagogue any serious reform efforts and we're going to have to deal with that.
My friend Pete Wehner as a very good piece on this today in his Commentary blog post. Pete prudently cautions that the GOP not impale itself on entitlement reform and that they do it incrementally. I agree with that. But it has to be done. This would have been true even had Obama never been elected and it is even more imperative now. But other fiscal problems are even more urgent and I hope the GOP tackles them first.
Edited on Oct 19, 2010 at 11:57amSep '10
Re: Grover Norquist Is Living in Candyland
Mainstream Boehner who brags about helping write “No Child Left Behind”, helped shepard the budget busting Medicare Part D through the House and who is one of the biggest ethanol junkies in congress, (I could go on, but you should have the point by now) is going to lead the fight to reduce spending and the size of government. Give me a break! Where is a good extremist when you need one?
Re: Grover Norquist Is Living in Candyland
I will add one thing. While I am a supply sider I agree that we should not allow our exuberance for pro-growth tax policies to intoxicate us into believing that spending doesn't matter. While some starry-eyed supply-siders might have been irresponsibly negligent in their inattention to the spending side of the equation, it's not fair or accurate to place all supply-siders in that quasi-utopian category. It's a false choice. That is, there is nothing inconsistent between supply-side advocacy and relative spending austerity. That's the best of both worlds. But an insidious VAT tax might be the worst of all worlds.
May '10
Re: Grover Norquist Is Living in Candyland
Amen, brother. My own brother (Cadfael Agricola Smith) was worried about the number of crazies being nominated. But dammit (said I), we can't afford the go along-get along types. We're in such a parlous circumstance that the crazies are absolutely necessary. Cause, hey, at least they're committed.
Aug '10
Re: Grover Norquist Is Living in Candyland
All taxes are noxious to some degree or another. But if the middle class wants all sorts of bennies from the guvmint, then they have to pay for them. You can't run a civilization on the principle of giving stuff to the vast majority of people paid for by somebody else. There ain't no somebody else.
I'd love to see the middle class lose its appetite for Social Security and Medicare, for subsidized college loans and public transit. But if you accept the premise that most people think these are all Good Things, then you have to admit that the middle class is undertaxed. Not the rich--the middle class. And the way you reduce the "progressivity" of the tax system is through a consumption tax, of which the VAT is the most likely not to raise the ire of the middle class who ends up paying for most of it.
Re: Grover Norquist Is Living in Candyland
Paul DeRocco
I'd love to see the middle class lose its appetite for Social Security and Medicare, for subsidized college loans and public transit. But if you accept the premise that most people think these are all Good Things, then you have to admit that the middle class is undertaxed.
I don't and won't accept the premise that most people think these are all Good Things, especially not with the advent of the Tea Party movement. Yes, we've grossly expanded the dependency class, but maybe it's time for a serious diet. If you read Pete's piece I cited above he is not suggesting VAT (and I hope he wouldn't) to address the entitlement problem. It seems to me if conservatives are seriously amenable to a VAT then we are destined for slow-growth European-style socialism. Very sad to me. Now is the time to lead people to the extent we can AWAY from dependency.
Aug '10
Re: Grover Norquist Is Living in Candyland
If you want people (the middle class) to pay attention to taxation levels a flat income tax will do that while a VAT tax will not. If everyone pays 18% (or whatever the level should be) in income tax whether they make $60k or $500k, you will see a radical shift in voting preferences. The tax&spenders will be toast.
If you have a system like we currently do where 40%+ of the people do not pay any income tax we are in deep dodo...
Aug '10
Re: Grover Norquist Is Living in Candyland
Kevin Williamson:
That’s not a campaign against Big Government — it’s a campaign against math. As ye spend, so shall ye tax. Denying that is not a principle — it’s a tantrum.
I object. It's focusing on the marginal tax increase, with today's levels of spending and taxing as a baseline, and saying the next $1 of taxation is unjustified.
You say that spending is the real problem, and I agree. But if you can't justify the next $1 of spending, how can you justify taking that $1 from the American people to pay for it?
Let Norquist hold the line on taxation, and let... well... someone hold the line on spending.
(My point ignores the possibly legitimate argument that forcing debt service to collapse the budget may be the only real solution to runaway spending, and in the meantime $1 in the hands of citizens is better than in government's. I don't know if Norquist advances that particular argument, but it would be a lot more consistent than Williamson's "tax away while we beg Congress to cut spending".)
Re: Grover Norquist Is Living in Candyland
BlueAnt
I don't know if Norquist advances that particular argument, but it would be a lot more consistent than Williamson's "tax away while we beg Congress to cut spending".) · Oct 19 at 2:55pm
Exactly. Do you all remember the "deal" that Bush 41 made with Dems constituting his "Read my lips" pledge? I could be misremembering this, but wasn't he deceived by Dems into reneging in exchange for their commitment to reduce spending two dollars for every dollar of reduced taxes? In turn, if memory serves, they reneged. My specifics may be off, but the point remains that it's very difficult to get spending cut in Washington even when coupled with tax increases. Expecting Dems to cut taxes when you give them more revenue is folly.
Jul '10
Re: Grover Norquist Is Living in Candyland
David Limbaugh
BlueAnt
I don't know if Norquist advances that particular argument, but it would be a lot more consistent than Williamson's "tax away while we beg Congress to cut spending".) · Oct 19 at 2:55pm
Exactly. Do you all remember the "deal" that Bush 41 made with Dems constituting his "Read my lips" pledge? I could be misremembering this, but wasn't he deceived by Dems into reneging in exchange for their commitment to reduce spending two dollars for every dollar of reduced taxes? In turn, if memory serves, they reneged. My specifics may be off, but the point remains that it's very difficult to get spending cut in Washington even when coupled with tax increases. Expecting Dems to cut taxes when you give them more revenue is folly. · Oct 19 at 3:28pm
You remember correctly.
And Williamson is just another in a long line of "conservatives" who are smarter than the rest of us.
Which used to work out rather well for guys like him - gigs on the op/ed pages of the NYT, WaPo, Newsweek, Time. Where do they go nowadays?
Re: Grover Norquist Is Living in Candyland
Kenneth
You remember correctly.
Bravo, Kenneth. I find it very discouraging -- and I am not easily discouraged -- that we have to fight serious and protracted battles on our own side of the aisle when we've got our hands full with true socialists in the other party. I don't know why some on our side always insist on making this stuff rocket science when principles of limited government are not that complicated.
Sure, the Leviathan federal government has become complicated, which is part of the genius of these libs. Once they legislate an entitlement into existence it becomes very difficult if not impossible to dismantle, no matter how much it deviates from its stated purpose, from payroll taxes and Social Security to Obamacare.
Do you think it bothers libs that the govt. has cheated from the beginning with Social Security by not segregating its funds and stealing from it as if it were properly part of general revenues?
Don't you think that's why Obama was willing to go to any lengths (lying, cheating, bribing, stealing, legislative chicanery) to cram through Obamacare, i.e., because he knew how difficult it would be to undo once passed?
Jul '10
Re: Grover Norquist Is Living in Candyland
David Limbaugh
Kenneth
You remember correctly.
Do you think it bothers libs that the govt. has cheated from the beginning with Social Security by not segregating its funds and stealing from it as if it were properly part of general revenues?
Don't you think that's why Obama was willing to go to any lengths (lying, cheating, bribing, stealing, legislative chicanery) to cram through Obamacare, i.e., because he knew how difficult it would be to undo once passed? · Oct 19 at 3:59pm
Just look at the streets of Paris today. When you tax people into serfdom with gimmicks like VAT in return for entitlements, they forget the tax and riot to keep the entitlements flowing.
Edited on Oct 19, 2010 at 4:11pm