Opinion

David Cay Johnston

GOP inaction means higher taxes

By David Cay Johnston
November 22, 2011

The author is a Reuters columnist. The opinions expressed are his own.

Thanks to Republicans who signed Grover Norquist’s pledge never to raise taxes, your taxes are automatically scheduled to go up in January — unless you are a plutocrat.

The law that created the congressional super committee set a target of this week for reducing budget deficits. The committee failed to meet the target.

Republican members were willing to cut programs that benefit millions, but they would not raise taxes on the hundreds of thousands of families whose annual income is in the millions and, in a few cases, billions of dollars.

So barring a mad scramble to pass new laws in the next six weeks, workers will pay around $110 billion more in payroll taxes next year and they will not get a $55 billion tax cut proposed two months ago by President Barack Obama. Absent another last-minute fix, more than 22 million families will be required to pay higher income taxes due to the Alternative Minimum Tax, some only because a parent or child has cancer or some other costly medical need.

How can that be? Isn’t the pledge of Norquist’s Americans for Tax Reform an ironclad vow never to raise any taxes anywhere anytime?

That’s how Norquist sells it, but the facts show otherwise.

In practice it is a pledge to protect every tax favor and loophole corporate lobbyists have slipped into the tax code and only to raise taxes on the working poor, workers generally, and on industrious teenagers who get a job, start a business or were given money in a fund to pay for college.

‘POLITICAL FRAUD’

Don’t take my word for it. Republican Judd Gregg, a former senator from New Hampshire, wrote an opinion column describing the Norquist pledge as a “political fraud.”

Gregg asserts a need to cut Social Security and Medicare. But he says Congress must also address taxes.

Norquist’s Americans for Tax Reform “needs to be given a scarlet ‘A’ for disingenuous and deceptive practices in pursuit of contributions from unsuspecting but sincere Americans,” Gregg writes.

The pledge “is little more than a stalking horse for the protection of tax breaks and special interest deductions inserted into the code over the years through effective lobbying by the narrow groups who benefit from these tax benefits,” Gregg continues. This hampers the economy, economic growth and revenue, he adds.

Strong as that sentiment is, it does not go far enough. I think those taking the pledge violate their oath of office.

Representatives and senators pledge “true faith and allegiance” to the Constitution, vowing that they take this “obligation freely, without any mental reservation.”

Pledge signers cannot serve two masters, Norquist and the Constitution. Politicians who do not renounce their pledge of allegiance to Norquist do not deserve to hold office as it prevents them from doing whatever is in the country’s best interests.

NOT REALLY TAX INCREASES?

The power to tax is the very first power we grant our Congress. An inability to tax was the primary reason the first American republic, under the Articles of Confederation, failed. This power is virtually unlimited, except for the prohibition on taxing exports.

The Norquist pledge is so flexible that in 2006 Republicans sponsored, and President George W. Bush signed, a retroactive income tax rate increase on teenagers who invested money from jobs, small businesses or gifts so they could pay for college.

Norquist told me at the time he had been unaware of this tax increase and he would look into it. He did exactly nothing.

Senator Charles Grassley of Iowa, who sponsored the tax hike, insisted it was not a tax increase and that retroactivity was entirely appropriate. Grassley reasoned that his bill was really a loophole-closer because much of the benefit of lower taxes went to the children of high-income parents.

That is how it works with lawmakers who act with a mental reservation after taking the Norquist pledge. If it’s the working poor, or working teenagers, the pledge does not really apply because those tax increases are not really tax increases, but undo temporary cuts or close loopholes.

Of course the Bush tax cuts were also temporary, but why bring up that inconvenient truth?

And, as former senator Judd notes, when it comes to closing loopholes that make the tax system inefficient and unfair, the pledge does apply, to the country’s detriment.

Norquist’s pledge has only one ironclad assurance: so long as his acolytes can block changes in the tax code, the richest among us will never pay higher taxes.

Comments
20 comments so far | RSS Comments RSS

I was speaking with a die-hard Republican District Attorney, who has photos of himself and his wife with President Bush the elder AND the younger on his refrigerator, and discussing the subject of “tax increases”.

I brought up that the only tax “increase” the Republicans currently in Congress support was to let the income tax credit expire, thereby increasing taxes on everyone with a job while allowing those who’s support primarily comes from investment vehicles, instead of labor, to continue to reap tax break advantages.

His only question was, “Why do you blame Republicans for that?”

There was no further discussion, as he couldn’t get his head around the notion that there was actually a tax increase the Republicans supported! He thought the ban was a blanket ban on all tax increases, and would not accept the news that Republicans were willing to increase working people’s taxes and continue to let capital gains tax rates go unchecked. Couldn’t believe it.

So there is more than a pledge getting in the way of an equitable solution to the issue of taxes … there is a perceptual dissonance within the Party of No where the members of that party simply do not see things the same way Progressives do. They just don’t see it … can’t comprehend the differences.

With or without the pledge, those who cannot see both sides of an issue are doomed to fail to reach consensus on any issue.

Posted by Stupidscript | Report as abusive
 

First good news I’ve heard since the superrrcommittee failed. Tax cuts are – when you are living in a country that has a $1.2 trillion deficit – utterly morally repulsive.

Posted by FBreughel1 | Report as abusive
 

WoW! . . this article is so biased. It is filled with inaccuracies.
Obama is the one who cut Medicare by $500MM.
AND . . it is the Democrats inaction that put our country in peril.

Posted by StocksDoc | Report as abusive
 

You cannot convince a republican because he is stupid beyond belief.

Posted by JohnG-73645 | Report as abusive
 

While I share the disgust at the current state of politics, it seems less than fact-based to pin higher taxes on only one party. Consider:

1.) The Democrats had 2 full years of virtual complete control of both the Executive and Legislative branches of the government. Not only did they choose to spend their political capital on health care “reform,” they did NOTHING about tax reform except extend the Bush tax cuts. There is no excuse for this; it is not the Republican’s fault. It is time for the Left to take responsibility for their choices and stop with the whining. The hallmark of great leadership is, “The buck stops here.” Own it and deal with it already.

2.) The Democrat-controlled congress was not even able to pass the President’s budget. Why is this not discussed in more detail by the Left? This is rather pathetic. Where is the leadership we all so desperately need?

3.) The budget for 2010 was roughly $3.5T. Extrapolated over 10 years at an average growth rate of 8%, the U.S. will budget $54.75T. The “Super Committee” was tasked with coming up with $1.2T in cuts during that same period, which amounts to around 2%. Regardless of whether you are for higher taxes or not, the the Left’s well-reasoned position that our “leaders” could not trim a mere 2% from spending? Seriously? That would amount to about $90 a year out of the typical U.S. household income of $45k. Most of us could probably find this “pocket change” under cushions in our couch. Yet the REAL pary of “No” (as in NO reductions in spending without higher taxes) just can’t bring itself to cut this meager amount from the bloated federal budget without also extracting even more revenue from the citizenry, be they rich OR poor.

“With or without the pledge, those who cannot see both sides of an issue are doomed to fail to reach consensus on any issue.” A truer statement was never made. It’s time for BOTH sides to take of their ideological glasses and seriously consider each other’s ideas. It seems to me that both sides could get what they want if they could agree to a “serial” implementation: Cuts, then taxes. Is it really that hard?

One thing I think we can all agree on: These extraneous “pledges” are nonsensical to the highest degree. Shall we all sign a pledge to not sign any more pledges?

Posted by SKMauss | Report as abusive
 

“You cannot convince a republican because he is stupid beyond belief.”

Tempting to think that, but incorrect. And a fine example of a similar impaired perspective from the left.

Posted by Stupidscript | Report as abusive
 

There is no convincing people whose mindset is set in concrete. This was designed to fail from the onset and can be blamed on those who set it up and they definitely weren’t all republican nor democrats.
Get a life, we’re going in debt at a furious rate and we have to somehow pay for it and blame in on republicans only? LIAR. Oh, I’m not a republican nor a democrat but I am beyond mad at the stupidity going on in this nation. We can survive the boy in the White House, what we can’t survive is the dorks that put him there.

Posted by Oren1 | Report as abusive
 

Every senator, congressman and all military take an oath, “to protect and defend the constitution”, as Mr Johnston states, ‘without any mental reservation’.

It states in: ‘Article I Section. 8.

Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;’

Either they are defending the constitution, or they are undermining it by refusing to pay the Debts. It is either ‘We will pay for what we voted to do.’ which is true to the oath, or it is ‘We refuse to pay for what we voted to do’. which is to undermine our country, our status as oath keepers, and our credit.

Is not the text of the law above what they swore to, ‘without any mental reservation.’

Who are we to accept that? fellow citizen.

Posted by TheOldSodbuster | Report as abusive
 

Why not tax the possession or sale of derivatives with an Excise Tax, avoiding the issue of “income” altogether? It was “portfolio insurance” and such that sank this country in the first place — so tax it. How about 20%? Might that stop derivative holding or sales in the USA? How sad!

Excise Tax cannot be dodged easily and is itself not Income Tax deductible. Let’s slap heavy taxes on the instruments that sank the country. And the people who create and trade them. And then we can hope they leave the country for good, both the creators and their evil spawn.

Posted by txgadfly | Report as abusive
 

It is said that nothing is certain but death and taxes. Norquist’s pledge is like a pledge not to believe in gravity…

Carry on reducing taxation ad infinitum and you’ll eventually approach the point where government doesn’t exist. A power-vacuum doesn’t exist for long. So who’ll fill that vacuum?
* Monopolistic corporations
* A new aristocracy of landed dynasties.
See also:
http://blogs.reuters.com/lawrencesummers  /2011/11/21/the-fierce-urgency-of-fixin g-economic-inequality/

So you cannot continue reducing taxes forever. There is an optimum level of taxation, and an optimum relative size of government (and relative level of “interference” or “regulation” in people’s lives and dealings with each other, call it what you will according to your ideological preferences). Depending on the circumstances, this level needs to be balanced. The people doing the balancing need the freedom to move both left and right… Or else the thing being balanced (the economy) will become imbalanced and crash.

It’s so obvious that I hardly understand why it needs to be said… If only the majority of people thought things through for themselves, instead of subscribing to one or another brand and becoming ideologues and sycophants to it…

Posted by matthewslyman | Report as abusive
 

The national fatal disease of too much spending can not be cured by taxation.

Posted by Peteo | Report as abusive
 

The president vowed to take a pencil to spending bills “line by line” to prevent budget deficits like the $800 billion one that Bush ran his last year in office. Now with 3 years of trillion plus deficits, no one calls him on his pledge and narrow-minded partisans think that a failure to agree on a compromise between spending cuts and new taxes is one party’s fault.

Posted by abb68 | Report as abusive
 

The only way for Republicans to save themselves is to break ranks with Norquist’s followers. Not going to happen this cycle.

Posted by Fishrl | Report as abusive
 

The “obstructionist” repubs are doing just what they were elected to do, save us from the socialist progressive democrats while there is still something left to save of the USA.

Posted by zotdoc | Report as abusive
 

Fantastic article by Johnston and a great comment by Stupidscript.

However, the “obstructionist” republicans, as zotdoc refers to them, have another objective: to defeat Obama. Once in power they’ll raise taxes. They have to. Every knowledgeable expert agrees that cost cutting alone will not solve the debt crisis. It is an inevitable truth that George Bush Sr accepted when he became President, and it will again when the next Republican becomes President. Until then, they are happy to starve the beast into submission.

Posted by LEEDAP | Report as abusive
 

Liberal inaction means higher taxes.

Posted by jaham | Report as abusive
 

Look at 2000 to 2006, which is where the majority of the damage was done that we are currently suffering through. Tax Cuts, Medicare prescription program and two wars..all unfunded. With a republican Congress and president. And we want to put Republicans back into total control again because……………..? Einstein’s definition of insanity appears to be an absolute for some people.

Posted by xyz2055 | Report as abusive
 

Great point about Norquist v. Constitution. I hope this meme gets wider exposure.

Some die-hard Republican District Attorney should examine Norquist’s famous “drowning in a bathtub” comment closely and explain why that isn’t sedition, an indictable offense.

Posted by rwgreene | Report as abusive
 

Let’s remove taxes as a political tool to allow our politicians any ability to select winners or losers in society whether they are an corporation, private business, private organization, family, or individual. Let us get to a straight per head tax that is equal for all US citizens.

This would allow every individual to contribute equally for the benefits of living in our society and ensure that the government’s desire to create favorable voting blocks is checked by the equality of the taxes necessary being distributed equally to all.

Posted by Atlasshrug | Report as abusive
 

The Republicans have been wrongly accused of being obstructionist, when the Democratic Senate has totally stopped any forward movement on any innovative ideas. The leftists are only interested in their own agenda. This incredible disinformation will continue all year and it is amazing that so many people believe the lies.

Posted by Freeandlovinit | Report as abusive
 

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