Con: Norquist may be a whipping boy in D.C., but he’s a hero to beleaguered taxpayers
LOGAN, UTAH EDITOR’S NOTE: The writer is addressing the question, “Should Republicans throw Grover Norquist over the fiscal cliff?”
Grover Norquist has become one of Washington’s favorite whipping boys, but taxpayers owe him thanks for focusing needed attention on the real problem in Washington: excessive spending, rather than too-little taxing.
Norquist’s “No Tax Pledge” does exactly that.
Excessive spending is the cause of Washington’s unprecedented trillion-dollar budget deficits in recent years, and spending is the best measure of the burden the federal government imposes on the economy.
Federal spending reallocates scarce resources from individuals and businesses to the public sector. And federal spending, by draining these resources from the private economy, where they would be put to their highest productive use, is at least partly responsible for the “Great Recession” and anemic recovery.
How government finances its spending—through current taxes or by borrowing—is of second-order importance. What is important is the huge size and cost of the federal government.
The predictable political solution to this problem is to raise taxes, especially on the “rich,” who supposedly are not paying their “fair share” of the cost of government. This, according to the conventional wisdom, will increase revenues and bring the budget closer to balance.
Given that only about half of American households pay any federal income tax at all, the numbers simply do not work.
Even if they did, raising taxes on high-income earners will create incentives for them to sidestep the higher taxes by establishing charitable foundations, moving their money offshore, or adopting other tax-avoidance schemes.
There is considerable evidence, beginning with President John F. Kennedy’s tax cuts, that lower marginal individual income tax rates at the upper end of the income scale produce more income tax revenue.
However, as President Kennedy and, later, President Ronald Reagan learned to their chagrin, lower tax rates lead to larger budget deficits unless they are accompanied by spending restraint.
In theory, a balanced federal budget can be achieved in two ways. One way is to raise tax rates in the faint hope of generating more tax revenues, thereby erasing some of the red ink. The other way is to cut spending.
The first option obviously imposes an additional drag on private economic activity. Less disposable income is available to households to spend on goods and services and to private businesses to invest in expanding plant capacity and hiring more workers.
Because consumers and producers contribute to wealth creation and economic growth, raising taxes is a recipe for continued stagnation.
Moreover, higher tax revenues shift responsibility for economic growth from the private economy to the public sector, the latter of which has proven repeatedly that bureaucrats and politicians are incapable of “investing” the taxpayers’ money wisely. Solyndra, the Chevy Volt and bailouts of too-big-to-fail financial institutions are cases in point.
Nobel laureate economist Milton Friedman once said he preferred a small, unbalanced federal budget to a large, balanced one. His preference recognized that, while taxes and federal government borrowing impose significant burdens on the economy, their negative effects are swamped by the impacts of the spending programs they finance.
Grover Norquist is spot-on. No matter how public spending is financed, higher taxes just kick the can down the road. The disorder in the federal government’s fiscal house can be set right only by getting rid of spending programs that America’s taxpayers can’t afford. There are plenty to go around.
Signing Norquist’s “No Tax Pledge” doesn’t mean opposing all changes in the federal tax code; it merely means looking to spending cuts first and then to reforming our Byzantine IRS tax apparatus for collecting them.
Republicans, especially, and all of us owe Norquist thanks, not condemnation.
William F. Shughart II is a senior fellow with the Independent Institute in Oakland, Calif., and the J. Fish Smith professor in public choice at Utah State University. Readers may write him at Jon Huntsman School of Business, 3500 Ol Main Hill, Logan, Utah 84322-8500; email: william.shughart@usu.edu.


Dec 7, 2012 at 10:27 p.m.
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Hmmm wonder why the dem leadership in the US senate REFUSED to vote on Obama's fiscal cliff package? Are they afraid to get the identical results received from Obama's last 2 budgets....when all dems rejected it.
Dec 7, 2012 at 6:49 p.m.
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Midnight "while oneday doesn't realize it $200,000.00 individual and $250,000.00 couples and it's hard working income the Dems are after."
Look real close...Bowlgal...wrong again "That $200,000 income level usually effects small business owners." The quotation marks around the sentence mean I was quoting what Bowlgal had written. It's irrelavant anyway, it still only affects 2% of small business owners which was the point.
Dec 7, 2012 at 6:19 p.m.
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from Bowlgal..."Pharm was able to correct me, however his/her link is an opinion. I'm looking for facts."
Here ya go Bowlgal.
"Federal debt held by the public would increase from 37 percent of GDP in 2007 to
115 percent in 2050 and to 435 percent in 2082.
Extending Economic Growth and Tax Relief Reconciliation Act of 2001 EGTRRA and Jobs and
Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), along with indexing the AMT, would have even larger budgetary effects. By CBO’s estimates, that combination would reduce revenues by 3.9 percent of GDP in 2050 and by 4.1 percent in 2082. If those revenue losses were not offset by other changes in policy, the budget deficit would increase to 15 percent of GDP in 2050 and to 39 percent in 2082. Under those policies, federal debt held by the public would increase to 190 percent of GDP in
2050 and to more than 600 percent in 2082—pushing federal debt as a share of GDP
outside of its historical range by 2040"
http://www.cbo.gov/sites/default/files/c...
"The new CBO data show that changes in law enacted since January 2001 increased the deficit by $539 billion in 2005.In the absence of such legislation, the nation would have a surplus this year."
http://www.cbpp.org/cms/?fa=view&id=...
If you go to the links you can read the entire documents.
Dec 7, 2012 at 3:02 p.m.
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"The Dems put all these expiration dates in when they were in full charge."
In 2011?
Dec 7, 2012 at 2:14 p.m.
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Treasury Secretary Timothy Geithner’s fiscal cliff proposal to Republicans Thursday was rejected out of hand, but offered a window into President Barack Obama’s priorities in the fast-evolving budget talks.
In the plan, sources said, Geithner proposed a two-step process to ultimately achieve about $1.6 trillion in new revenue. The first step would net $960 billion immediately by allowing the Bush-era tax cuts to expire on top earners along with raising rates on dividends and capital gains.
Read more: http://www.politico.com/story/2012/11/ge...
Facts
Dec 7, 2012 at 1:43 p.m.
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I also believe Obama is just looking for a power grab as he has threaten to veto ANY plan, even his own if the Congress doesn't give him the power of no debt limit. It's all become crystal clear he has no desire to fix anything.
GOP should simply walk and allow Obama to own it.
The Dems put all these expiration dates in when they were in full charge. The GOP has no say in the end anyway. Walk away.
Dec 7, 2012 at 1:37 p.m.
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No Brothermousekoch, you didn't answer me. Pharm was able to correct me, however his/her link is an opinion. I'm looking for facts.
Tick tock for you to pick one posting name. Tick tock
Dec 7, 2012 at 1:34 p.m.
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It figures Bowlgal won't admit her blutherings below were wrong. She's probably spent the last day hitting "suggest removal" of her own comments, in hopes of making them going away.
When I first saw the blutherings, I couldn't make sense of them...what? dems don't want any part of taxing invesment income?! But I dismissed it because they rarely make any sense.
Yet, pharm was patient enough to help you out. So you don't have to say sorry to me, but you should at least acknowledge pharm's kindness.
Dec 7, 2012 at 1:22 p.m.
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I'm just trying to figure out why mouse/brotherskoch think it's okay to take more money for a Government that is run by people who clearly don't know what they are doing. They are reckless and haven't passed a budget in over 3 years. If junior came to you everyday looking for $20.00, won't you ask him why? Would you just blindly give it to him?
Mouse you post as several people so you hardly have room to question my credibility.
Good American, I don't even know what you are talking about. You don't make any sense so I'll leave that to your own mind.
Dec 7, 2012 at 7:19 a.m.
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2008 truth-o-meter one day? Doesn't include now ObamaCarelessTAX and hundreds of new pages of regulations in the past 4 years. Why else would Obama have approved the first time to extend the current tax rate in 2009?
Bowlgal is correct. Spending is the problem.
Check out the PA report.
A single woman with 2 kids making only $20,000 per year after all Government aid makes more money then the single woman with 2 kids making $60,000 per year on her own.
The Dems don't want you to be the $60,000.00 self reliant woman. They have created "Julia" for you to "get" more by voting Democrat.
Current definition of slavary.
Dec 7, 2012 at 7:03 a.m.
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oneday, pharm, brothersmouse all wrong - first, Benghazi Barry doesn't give a rats behind about taxes, spending, or our government. He wants total control to by-pass all Congress to dictate as Egypt has just done. Mouse, tailgating again on pharm while oneday doesn't realize it $200,000.00 individual and $250,000.00 couples and it's hard working income the Dems are after.
Spend your money wisely American liberals but let you government spend it foolishly. Real smart.
Dec 7, 2012 at 7:03 a.m.
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"It's based on data from the Congressional Budget Office and the Center on Budget and Policy Priorities. Its significance is not partisan (who's "to blame" for the deficit) but intellectual. It demonstrates the utter incoherence of being very concerned about a structural federal deficit but ruling out of consideration the policy that was largest single contributor to that deficit, namely the Bush-era tax cuts."
http://www.theatlantic.com/politics/arch...
They were warned when the cuts were passed that this could happen, they even cut less than they wanted, but passed them , by reconciliation, anyway.
Dec 6, 2012 at 11:01 p.m.
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I am all for taxes going to "historical norms" as soon as spending DROPS to "historical norms".
Wanting increased taxes on a sliver of income that solves nothing in the way of fixing the problem only shows how duped the followers of dem party have become.
Dec 6, 2012 at 7:32 p.m.
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“Check it out. I know your ideology is first to not believe it, but it's true. Look for yourself."
Bowlgal take your own advice..."
http://www2.ucsc.edu/whorulesamerica/pow...
"Under Obama, the rich have gotten richer and the poverty level has grown." The stupidest statement you have ever made and that's saying a lot!!!! This started happening with Reagan Trickledown economics. If you honestly believe this just happened under Obama's administration you have proven yourself to be completely incapable of critical or analytical thinking at any level.
Dec 6, 2012 at 7:12 p.m.
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Bowlgal...wrong again "That $200,000 income level usually effects small business owners." Only 2% of small business owners make over 250,00/year. Do the math that means 98% will not be affected.
http://www.politifact.com/truth-o-meter/...
Dec 6, 2012 at 3:34 p.m.
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"A large majority of registered voters, including 77 percent of Republicans, say it’s a bad idea for members of Congress to sign a pledge to never raise taxes on the wealthy, according to a new Quinnipiac University poll released Thursday.
Overall, 85 percent of voters said it’s a bad idea to sign a pledge to an anti-tax group opposing taxes on corporations or the wealthy under any circumstance.
It’s worth noting that the actual pledge that most Republican members of Congress have signed is a ban on all tax increases; it does not single out the wealthy as Quinnipiac did."
http://www.washingtonpost.com/blogs/post...
Dec 6, 2012 at 3:20 p.m.
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"And Professor Thurman thinks the Grover Norquist pledge is a “seditious oath, a treasonous oath,” and he wants to “start a meme” that stirs up the people of this country to give serious thought to what that means. To that end, he has recorded a video that is going viral, presumably because it so well articulates – in his calm, reasoned, but very persistent voice – what is so objectionable about our elected officials swearing an oath to this scruffy man named Norquist who is, ostensibly, holding hostage the GOP congress people he’s blackmailed into acquiescence.
Thurman’s main thesis is that a person cannot hold allegiance to two masters, particularly conflicting masters, and properly serve either. He makes the point by, first, reiterating the oath of office that all Senators and Congressman and women take:
I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God.
A noble, historical oath; one that comes, surely, with the expectation of loyalty and a willingness to do what comes with the job. Instead, Thurman points out:
“95% of the congressmen and Republican senators have sworn a written oath to someone called Grover Norquist and an organization called American For Tax Reform; that they will under no circumstances, and for no reason, raise taxes of any kind on anyone. And therefore they have taken an oath to an outside organization which is not supported by the U.S. Constitution – which gives Congress the right to levy taxes, to do the work of the people through the government –but this is a non governmental organization, not elected by anybody and supported by big money people who are making money by not having to pay taxes.
“And these people have signed a sworn oath that contradicts their oath of office. And therefore, in fact, they do have mental reservations, and they do have purpose of evasion and they are not sincerely taking their oath of office. And if they persist in that, and if they are held to that by this outside person who is not a member of the government, then they are, in fact, breaking their oath of office and they are not serving what they swore to serve the American people.”
http://www.addictinginfo.org/2012/12/03/...
Dec 6, 2012 at 3:11 p.m.
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Bowlgal, pharm provided a link that clearly refuted what you were bluthering on (in error) about taxation of investment income.
Not that your comments have much credibility to begin with, but can you at least acknowledge that you were wrong.
http://www.npr.org/blogs/itsallpolitics/...
Dec 6, 2012 at 2:10 p.m.
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Extreme? Radical thinking to expect a responsible Government. The founders expected a small federal government involved more in a stronger military and allow states to be the real leaders and more accessible to their residents. Obama the extreme in all reaching, all controlling over taxing over spending governement.
That my friends is the radical.
http://www.breitbart.com/Big-Journalism/...
NY Times - forced to admit Reagan was right.
Dec 6, 2012 at 1:34 p.m.
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A debt limit increase only pays for what has already been spent. It does not affect future spending. Only Congress can authorize spending.
Dec 6, 2012 at 1:32 p.m.
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Grover Norquist is an extremist. I understand his tax goals, but he said he wanted to drown government in a bathtub, to cause it to fail upon itself, and small government folks would like that. Well, I want government, small and effective. He, I believe, is like Howie Long of Louisiana was in the South to the left, (also an extremist). He said everyman a millionaire by taking millionaire's money from the rich and giving it to the poor. Nuts, right? As are Grover's ideas, to the right.
Dec 6, 2012 at 1:25 p.m.
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http://news.yahoo.com/debt-limit-gives-g...
Okay, so they were very close to the tax hike until Obama demanded no debt limit and refuses to discuss reform or spending cuts. Why?
It doesn't sound like Obama wants to make a deal. I think the GOP could agree to everything and Obama would still find a reason to stall.
You have to ask yourself why? Does that go back to "collapse the economy from within" as his mentor proclaims.
Dec 6, 2012 at 1:04 p.m.
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http://www.npr.org/blogs/itsallpolitics/...
Dec 6, 2012 at 1:04 p.m.
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For instance, in the six years between 1968 and 1974, discretionary spending fell 21.6 percent. In the five-year period between 1991 and 1996, discretionary spending fell 12 percent.
Meanwhile, Obama’s projected budget shows that in the six-year period ending 2017, discretionary spending would fall 22.7 percent — about $265 billion in constant 2005 dollars.
That’s the biggest six-year cut since 1962, though not in history. The federal budget fell 84 percent in inflation-adjusted dollars in the six years after World War I and 66 percent in the six years after World War II.
There is a certain irony, of course: Obama was forced into accepting many of these cuts — after Republicans forced a bitter fight over extending the debt ceiling. But to his credit, he also cited Republicans when making his statement.
factcheck.org
Dec 6, 2012 at 1:01 p.m.
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By the way, Obama also said in 2008 a high debt was a result of bad leadership. True then, apparently, not now.
Dec 6, 2012 at 12:59 p.m.
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pharm, please provide link. Obama said all that in 2008 during the campaign. He's only talking about income now that I see. Also the GOP was close to agreeing with Obama until he now wants Imperial status of no debt ceiling.
Dec 6, 2012 at 12:42 p.m.
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"Back in 2003, Congress set the top tax rates for both capital gains and dividends at 15 percent, lower than they had been since the 1930s.
Now, President Obama wants to raise those rates, but only for the wealthy.
Under his plan, for those earning more than $250,000 a year, capital gains would be taxed at 20 percent, and dividends would go back to being taxed as they had historically, as ordinary income, more than doubling the current rate."
Dec 6, 2012 at 12:36 p.m.
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What good is getting a couple billion more a year when Obama is spending 1.5 Trillion a year? And has no interest in spending cuts.
Dec 6, 2012 at 12:35 p.m.
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And the large problem is what mouse? Obama's spending? Lack of Dem's budget? Unemployment, poverty growth under Obama?
Dec 6, 2012 at 12:26 p.m.
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bowlgal, if you think the same jokers that created the tax code can reform it in two weeks.... well, I can't help you.
As for your other mischaracterizations on what I believe and think, I don't have time to refute, as you so obviously have.
Letting tax rates go back the way they were before, on the people that can most afford to pay higher taxes is one small simple step to take towards fixing a very large problem.
Dec 6, 2012 at 12:19 p.m.
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"In a preview of this weekend’s Moyers & Company, former Republican congressman Mickey Edwards talks about Grover Norquist’s beguiling ability to hold elected officials to absolute anti-tax positions. “It’s not conservatism, not rational, not adult,” Edwards tells Bill. “It’s a 12-year-old’s kind of thinking.”
Edwards chaired the Republican Policy Committee, was a founding trustee of the conservative Heritage Foundation, and served as the national chairman of the American Conservative Union."
http://billmoyers.com/episode/preview-mi...
Dec 6, 2012 at 12:11 p.m.
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In the end,
There aren't enough lobbyist for the rich or rich to fund Obama's spending problem.
Again, Dems won't even consider Government reform. They have become a money grabbing machine. Bad news for all of us, not just the rich.
Dec 6, 2012 at 12:07 p.m.
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That $200,000 income level usually effects small business owners.
Romney, Buffet, etc. is where the GOP is. Close loop holes, eliminate deductions. Tax higher rate on investment income. Dems won't have any part of that.
Under Obama, the rich have gotten richer and the poverty level has grown.
Check it out. I know your ideology is first to not believe it, but it's true. Look for yourself.
Dec 6, 2012 at 12:03 p.m.
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The rich or the wealthy? Don't you ever ask yourself Mousebkoch why the Democrats want income tax and not wealth tax?
People like Buffet for example only make about $150,000.00 from income. It's the dividends, etc where they get their wealth and Democrats won't even talk about it. Reid won't bring anything to the floor for discussion.
Ask yourself why?
Dec 6, 2012 at 11:22 a.m.
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Lobbyist for the Rich.
Dec 6, 2012 at 10:53 a.m.
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Taxpayers are not "beleaguered." Federal income tax rates are at their lowest level in 75 years. The richest of the rich, such as Mitt Romney and Warren Buffet, are paying less than 15% because they skillfully avoid earned income and utilize sophisticated tax avoidance strategies. The 47% that don't pay income taxes are either retired, unemployed, at-home mothers, students or dirt poor minimum wage workers.
Dec 6, 2012 at 10:27 a.m.
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Dumb as a post.
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