MENU

Reason.com

Free Minds & Free Markets

Grover Norquist: GOP Tax Bill Is Good Enough For Now (He's Planning to 'Whine Later')

Q&A with the president of Americans for Tax Reform.

Tax reform bills have been approved by both the Republican-controlled House and Senate. Most observers believe the different versions will be reconciled into legislation representing the most thoroughgoing and consequential changes to the U.S. tax code since the late 1980s.

To get a sense of the good, the bad, and the ugly of tax reform (there's plenty of each) Reason's Nick Gillespie sat down with Grover Norquist, the longtime head of Americans for Tax Reform and arguably the most influential activist over the past 30 years when it comes arguing for lower taxes.

Edited by Mark McDaniel. Introduction and graphics by Meredith Bragg. Cameras by McDaniel and Bragg. Music by Krakatoa, licensed under Creative Commons, CC BY-NC-SA 3.0 US.

Subscribe at YouTube.

Like us on Facebook.

Follow us on Twitter.

Subscribe to our podcast at iTunes.

This is a rush transcript. Check all quotes against the audio for accuracy.

Nick Gillespie: When the Senate passed its version of tax reform you wrote, "This is big, a bigger deal than Obamacare. Big job creation, big middle class tax cuts, big changes in an outdated tax code." What do you like about tax reform as it's shaping up generally? What are the large contours?

Grover Norquist: There are things that happen immediately and then there's secondary effects. We eliminate the tax deductibility of state and local taxes. It's a pay for. Rates go down, broaden the base.

Gillespie: That's in both the House and the Senate.

Norquist: It's in the House and the Senate, they're the same. $10,000, you can deduct up to $10,000 of property tax at that state and local level but not income taxes. You go, okay, that's lower rates, broaden the base, who cares? What you just did was dramatically remove an incentive for higher taxes at state and local level. This reform packages is going to result in 1,000 tax increases that didn't happen at the state and local level and a 1,000 tax cuts that do. As California with a 13.3% top income tax rate, it's going to have to take that down.

Gillespie: California's also a net donor to the federal government so is this going to kill the golden goose if California's a high tax state when people are wealthy there? They kick a lot of money into the federal government, shouldn't they be getting tax relief from the federal government?

Norquist: No.

Gillespie: Okay.

Norquist: Because it is California senators and congressmen and New York senators and congressmen, New Jersey senators and congressmen and Connecticut senators and congressmen who vote for the very high tax rates at the federal level which is why those states are donor states. They also have politicians at the state and local level who have high taxes as well. They damage the country when they raise our personal income taxes for everyone in the country. But they also damage the whole country when their state politicians have high state taxes that are subsidized by being tax deductible at the federal level.

Gillespie: What are the other tax expenditures or tax breaks that get lost here? That you're good about? The Senate version doesn't do anything with the mortgage interest deduction so it allows homeowners and the people who take the mortgage interest deduction overwhelmingly wealthy, they can deduct up to a million dollars or interest on loans up to a million dollars for two houses. The House version caps that at 500,000 for one. Which is better? And why shouldn't it be zero for this?

Norquist: We should take it to zero. Some of these things are how far can you get. Any three senators could kill the whole project. There are limits to how far you can go. Any 25 congressmen can kill the whole project. When you begin to push around the edges and we called it pretty close in both cases. We had two votes to spare in the Senate and maybe 10, 15 votes to spare in the House and now we're going to do this again. Given the rules we were living under, the Senate rule, the Bird Law, and the fact that we had narrow majorities. This is a very good piece of legislation but there's a caveat. It's not what you and I would write if we'd written it down. It's not what I'd like to see in 20 years or 10 years.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Fist of Etiquette||

    Grover Norquist is going to ruin Tax Day like he ruined Burning Man.

  • eyeroller||

    "...arguably the most influential activist over the past 30 years when it comes arguing for lower taxes raising taxes on the kids and grandkids."

  • The Last American Hero||

    What spending bills did he endorse?

  • Fist of Etiquette||

    Tax cuts are de facto spending bills.

  • Brandybuck||

    Not following the logic. Certainly if spending cuts don't come at the same time as tax cuts, then deficits and borrowing will inevitably increase (because the laffer curve isn't what everyone thinks it is), but that does not necessarily translate into future tax increases.

    And with the rate of spending increases currently in effect, any possible future tax increases due to present tax cuts are like that wafer thin mint in the Meaning of Life.

  • SimonP||

    There's maybe not an ironclad causal link from deficit-busting tax cuts today to tax increases tomorrow, but it's not hard to see how the scenario plays out, is it?

    We're not only cutting taxes, but we're restructuring the tax burden in ways that will have unforeseen impacts on tax collections, undermining even the meager boosts to revenue that charitable analyses have ginned up. So that's going to lead in fairly short order to a lot of pressure to cut spending at the federal level, which will in turn put pressure on state governments to fill in the gaps... which they will also be disincentivized from doing by this very same tax reform. So then everyone's just paying more out of their post-tax income on everything and... then what? Do you think that we're just going to waltz off into libertarian-topia, where everyone pays more out of their pocket for less? Or do you think we're going to start raising taxes again?

  • Bra Ket||

    Great line the guy used in the video: "Taxing is taking money from people who earned it to give to people who didn't necessarily earn it". Start with that every time you challenge people to defend a tax cut as money we can't afford to not take. We need to fuck someone over today because otherwise we might have to fuck someone else over tomorrow. Quite the danger there, yes.

    You should watch the video for the answer to your questions too. Of course the expectation of the people doing the cutting and defending the tax bill is it will result in higher growth.

    As for your personal opinion, if you don't think slashing corporate taxes will be beneficial, you aren't worth arguing with. Even Obama tried to do it.

  • SimonP||

    The question isn't whether some benefit will result from cutting corporate taxes. I acknowledge that virtually every analysis of the bill predicts a slight uptick in economic growth will result. The question is whether that tick or two of GDP growth in the next few years is going to be worth the massive hit to the national debt and/or massive reductions in welfare spending that will necessarily follow.

    I think the GOP on this question is being driven by a lot of short-term considerations that will inure to the benefit of a corporate class that knows how to capitalize on a sugar-rush market rally and expects to cash out before any of the negative ramifications come about. But flirting with Greece-levels of debt is what we're talking about here. Do we really want to challenge the international financial markets to second-guess our ability to pay off our national debt?

  • NotAnotherSkippy||

    Massive reductions in welfare are a feature not a bug. The only reason we're on a path to become greece (actually japan is more like it) is because of your welfare spending.

  • SimonP||

    You say that now. I'm not sure you'll like what you see, though, particularly when you or your spouse has to quit their job in order to care for the senile parent who can no longer afford to stay in a nursing home.

  • PTSD||

    What do people mean by "earn"? I make a lot of money. While it would be gratifying to assume a Biggest-Dick-in-the-Room attitude and take personal credit for my "earnings," I know deep down that a significant amount of the money I have coming in results from contingency and accident. I also have a lot of rich friends who feel exactly the same way. Honestly, a lot of our wealth comes from dumb luck -- good investments and such. Sure, there was hard work in there, too, but it's not as though I'm working 20x harder than the guy who is pulling in median household income. Just because I make a lot of money doesn't mean I "earned" it.

  • PTSD||

    I would add that it's not as though we're talking about makers who work hard and are then taxed for it, and takers who don't work and get the spoils, in the way that Norquist suggests. The money I have comes from the practice of corporate law. Most of my social acquaintances make their money in finance, law, and other professional service industries. We are the overwhelming majority of the 1%. But are we really "makers," giving all our "hard earned" cash to "takers"? Hardly. I'm essentially a parasite, who benefits from a monopoly that emerges out of licensing restrictions (as are the fields of medicine, finance, etc.) https://www.brookings.edu/ research/make-elites-compete-why- the-1-earn-so- much-and-what-to-do-about-it/ And this tax code, which is shaping up to be more complicated than the one it replaces, is only going to make me richer because I can game the system. In fact, that's really how the 1% makes a living -- gaming the system. So, when it comes to taxes, I just see it as the house taking its cut. Hardly anything to get your panties in a twist about.

    I believe in property rights, and I sure as hell don't want people stealing from me. But there is something fishy about the way to Norquist talks about this problem with all the smugness and faux indignation.

  • damikesc||

    Not having your money stolen from you by force is the sane as spending?

  • Hugh Akston||

    "They can't make you pay your credit card bill after you're dead! #YOLO"

  • eyeroller||

    People spend more when they use a credit card than when they use cash. Lower taxes will tend to make people support more government spending. Bear that in mind.

  • Stormy Dragon||

    Rates go down, broaden the base.

    i.e. raise taxes on the middle class to buy lower taxes for billionaires.

  • NotAnotherSkippy||

    That would be a refreshing change considering jist how little the middle class actually pays. Too bad that's not what this bill does.

  • SimonP||

    Yeah... the middle class, what with its accountants structuring their income through offshore tax shelters... most of their income deriving from investments rather than wages... getting the benefit of capital gains treatment on cleverly-structured earned income... inheriting estates with stepped-up basis from their relatives...

    I mean, you look at a tax table, and maybe it looks like the middle class isn't paying as much as billionaires. But billionaires are not earning $500 million/year salaries. They're sitting on a shitload of tax-preferred investments and clever tax structuring. Good for them? But let's not pretend that taking out another $1 trillion in national debt to give them a short-term payday is in any way about tax fairness.

  • Bra Ket||

    Oh you are a socialist. I should have guessed.

    Quit lying about the bill. There's a hell of a lot more that comes for that "trillion" that has nothing to do with capital gains, or billionaires, or short term paydays.

  • SimonP||

    Right, there's a bunch of reshuffling of the tax burden amongst various groups. Short story: own a home, have kids, live in a red state, make a middle class income, you're golden. Go to grad school, rent instead of buy, live in a blue state, make slightly less or slightly more than middle class income, opt not to have children, you're soaked. So every one of us will have to figure out what the bill means for us - and we don't even know yet what the final bill is going to look like, apart from the big corporate giveaway - I guess they'll have to pass it before we'll know what's in it - for no real reason other than that it was really, really important that (some of us) "pay for" the corporate tax cut.

    And I'm not a socialist. I agree that thoughtful, careful revision of the tax code could have been a good thing, resulting in simpler tax brackets and a more rational allocation of tax burdens. That's not what we're getting.

  • Bra Ket||

    They cut the crap out of the home mortgage deduction as he describes in the video (and he wants to go all the way with it but says that was the best they could get given the slim majority). It went from over 1M for two houses to 500k for a single house.

    The special problems of living in a blue state can be solved by your local politicians. As noted in the video, the deduction was actually an incentive for them to raise your taxes.

    Corporate "giveaways" benefit you if you work for or do business with them.

  • SimonP||

    SALT deductions were just an acknowledgment that it makes no sense to double tax the same income, at both the state and federal level. You know, like taxing corporate income?

    I don't mind encouraging states to experiment with tax and spending policy. I'm not sure why red staters care what blue staters do with their money, but apparently Grover wants to free all of us from the burden of financing our own budgets with our own state and local taxes, so now we all get to suck at the federal teat. Talk about perverse incentives.

    Corporations aren't going to go on a spending or bonus bonanza after the tax bill goes through. If there is a business case for raising wages or investing in the business, you can bet just about any company already could get the financing it needs to do it. All the tax bill will do is give EPS a shot in the arm, leading to stock buybacks and M&A activity. If it leads to economic growth, it'll be because all those investment bankers and lawyers will be flush with year end bonuses. I can tell you I'll be busy when it goes through.

  • NotAnotherSkippy||

    You're not just a socialist, you're a stupid socialist. Go read edwards analysis at cato. The tax cut goes OVERWHLWMINGLY to the middle class.

    Make less than middle class you already don't pay taxes. Poor you goong to grad school now has to pay for his student loans. Poor, poor you. And fun fact: median CA property tax is higher than median TX property tax. Now what was that you were saying about getting screwed?

    You can't accept thoughtful tax reform because that would mean admitting that your greed and envy are wrong and those billionaires (really hundred thousandaires) pay way more than their fair share already.

  • SimonP||

    That's not even what Edwards says. Maybe you should read his link? Anyway, his analysis might be relevant if we spent, say, percentage points, instead of, y'know, dollars.

    Grad students always had to pay their loans. What the tax bills would do is require grad students to pay taxes on tuition waivers and deny them the ability to deduct interest they paid on their student loans. What economic policy is served by doing this? Do we want fewer STEM grads?

    I'm not envious of billionaires, and I'll bet I'm wealthier than you. I don't know what's "fair" when it comes to tax burdens, but I do know that I care about tax policy that incentivizes the right kinds of behavior and promotes economic growth. The tax bill doesn't do that. It will increase our national debt by over $1 trillion, and it will dramatically reshape large sectors of our economy, at a time when unemployment is already extremely low and the economy is growing. It's just a dumb bill.

  • Mitsima||

    Since there are more voting middle class than billionaires, it only seems fair they should pick up more of the spending bill - fair share and what not.

  • MarkLastname||

    I see you're still retarded. Read a little about tax incidence regarding corporate taxes and then try again.

  • Stormy Dragon||

    Norquist: This is the driver of economic growth.

    '81 was the last time a tax cut created economic growth. Ever since then, every time Republicans cut taxes, the economy went in the crapper and every time the Democrats raised taxes, the economy revived. Yet no matter how many times we go through this cycle, Norquist is back telling us that if we do it just one more time, this time tax cuts will lead to an economic boom.

  • NotAnotherSkippy||

    So why didn't the economy rev up after bush 1 raised taxes, after barry raised taxes? Why did it take 4 years for the Clinton tax hikes to "rev" up growth? (hint: he was riding the dotcom bubble).

    But taxes = civilization or something.

  • Rich||

    Taxes are not the price we pay for civilization, they're the taxes we pay for government.

  • Mitsima||

    "You don't pay taxes because it's a moral obligation. You don't pay taxes for social services. You don't pay taxes for a mighty fleet. You don't pay taxes for roads. You pay taxes to buy your way out of a jail cell for another 365 days." -me

  • damikesc||

    He's confusing widespread accounting fraud for economic prosperity, it seems Skippy.

  • Bra Ket||

    Capitalism drives economic growth. This is proven repeatedly the world over.

    Not sucking the productivity out of society means more is left for capitalism.

    This is simple logic that leads to the benefits of tax cuts, we don't need to play games with statistics or pretend correlations are causations.

    Any middle ground you think you're playing is just a corrupted version of capitalism that makes it less efficient.

  • Stormy Dragon||

    Creation Economics. Pay no attention to what the actual results of our policies, we have faith in the one true Corporatism! And if reality doesn't match our faith, it's just a test from the God of Corporatism and we must believe even harder!

    Any middle ground you think you're playing is just a corrupted version of capitalism that makes it less efficient.

    Maybe efficiency isn't the be all end all of existence.

  • Bra Ket||

    Yeah the pseudoscience that is macroeconomics is so much better. Take 300 million people and a million firms operating in a system with rules and national tax priorities changing annually, and pick out a couple variables and correlate them.

    Luckily the "actual results of our policies" are also more freedom and respect for property rights. So logic and principle. win win.

    Corporations are just abstractions. Capital is too for that matter. What really exists are labor and wealth. Efficiency means more wealth being created from the same labor and other resources. And more is objectively better than less.

  • Brandybuck||

    Cut spending. The taxes will follow.

  • Libertarian||

    Maybe. One thing that $20 trillion in debt proves: "starving the beast" doesn't work.

  • damikesc||

    Has "Starving the beast" been tried?

  • NotAnotherSkippy||

    One thing that the last $10TT proves: "not starving the beast" doesn't work.

  • NotAnotherSkippy||

    HAHAHAHAHA. Oh wait, you actually think that will work. HAHAHAHAHAHA.

  • Brandybuck||

    Dunno. It's never been tried. But I do know if spending gets cut, then ... spending gets cut.

  • SimonP||

    Right, you've put your finger on why the whole "starve the beast" approach is so fucking asinine. It's basically just poor governing.

    You want to cut spending? Cut spending. Make the hard choices. Decide maybe you don't need to spend $500 billion on the military when you're not in a major war. Decide maybe that Grandma should have planned her retirement better if she didn't want to move in with you. Figure out a new way to enforce federal law without any enforcers. Whatever - trim that "fat" that everyone says the budget has. And then turn around and tell taxpayers that they've earned a break, and you can give it to them.

    Don't pull this whole shell game where the you get the bonus of tax relief before the hard choices. When you do it that way, you are basically admitting you're putting yourself into a false crisis in order to force deals later on. But our government shouldn't be imposing crises on itself! That makes no sense!

  • Devastator||

    You're either ignorant or full of shit. Cut taxes now and spending later is a constant in the GOP thought process for the past 50 years. It never happens.

  • Bra Ket||

    Is the tax bill also smart enough?

  • Libertarian||

    I'll always have a soft spot for Norquist due to this old quote of his:

    "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."

  • Libertarian||

    Speaking of investing in civilization . . . . .

    "Thanks to Buffalo Bayou Brewing Co., free beer for life is just a $1,000 investment away.

    To help raise money for a multi-million dollar tap room, the Houston-based brewery is offering free lifetime brew.

    The $14 million tap room will be built in the First Ward, one of Houston's historic wards.

    According to the company, a contribution of at least $1,000 will get you that free beer, a custom tankard and your name plate engraved on the contributor wall.

    "One beer per day until the end of your days," said Taylor Stephenson, marketing coordinator for Buffalo Bayou Brewing Co. "You can come into our tap room. You can come in and enjoy anything on the tap wall."

    The brewery plans to open the tap room at the end of 2018.

    Interested investors can check it out at NextSeed."


    http://abc7.com/business/buffa.....e/2776741/

  • ||

    (Did anyone else notice that Grover's eyes looked like he'd just been pepper-sprayed?)

    I'm with Norquist as this bill is not even close to what I'd like to see (i.e., something closer to the Fair Tax), but take what you can get and try to cut spending in the next bill(s).

  • KevinP||


    Norquist: Yes. There is somewhere between three and $5 trillion of American earnings overseas. Three is what most economists at least say that they believe is out there. Five the number Trump likes. He may be right because we don't know, we're not sure. But three to five.

    Gillespie: But he does have a known documented penchant for exaggerating things.

    Had to get that in there, right?

  • Lee Russell||

    Broadening the base means we pay more and the billionaires pay less and if we're lucky we'll also get the chance to pay road tolls to get to work each day.

  • NotAnotherSkippy||

    You shouldn't have to pay for your welfare. It's not fair!

    Good news! This bill makes the tax code even more progressive, so you can bitch even louder about not getting enough from the government that you don't pay for.

  • SimonP||

    Well, this is pretty fucking incoherent. I had no idea Norquist was such an obvious idiot.

  • TGoodchild||

    Sevo: Fuck off, slaver.

  • SimonP||

    Nah, I think I'll stick around. Thanks.

  • TGoodchild||

    The jacket.

  • Tony||

    Everyone becomes a compromiser and a pragmatist when they taste power.

    The problem with Republican so-called tax reform is that it can never be total, so it will always leave in place cronyism and unfairness. Only it won't even have the virtue of benefitting people who actually need any help.

  • Devastator||

    exactly a flat tax across the board, no loop holes. Be fair or GTFO. This was never about the middle class, it's about loopholes and cronyism for those who can afford to pay to play, and GOP masses eat it up like they're coming out to the better. "My king needs more gold, this makes me happy, even though it's coming out of mine and my kid's pocket; it's good to be a peasant, ah the peasant life, it's fer me!"

  • Glide||

    I'm with Norquist. The bill is a crappy bill when it comes to increasing liberty, but it's much, much better than I expected for something relying on Lindsey Graham and Lisa Murkowski to pass. Given the current Senate composition I'm definitely in agreement than they should just pass the damn thing and we'll take the small improvements. They can try again when the Democrats get out of this mood where you could literally write a Jimmy Carter tax bill, add "Sheldon Adelson receives a 25 cent tax credit" and they'd scream "giveaway to the rich!"

  • ranrod||

    Senate and House tax scam raises the poorest TAX RATE in the US from 10% to 12%
    Yep, and that is a 20% increase on low income earners subject to the federal income tax which is huge.


    Major medical costs: The decision to eliminate the deduction for medical expenses exceeding 7.5% of adjusted gross income was one of the bill's "tough calls," Brady said Friday. "The call is this: Do we want a tax code that has special provisions that you may need once in your life, or do we want a tax code that lowers rates every year of your life?" he said.

    Stadium bonds: State and local governments could still issue bonds for your favorite professional sports teams, but the interest would not be tax-free for bonds issued after Thursday.
    https://www.usatoday.com/story/news/politics/ 2017/11/04/15-things-republican-tax-bills- fine-print-could-affect-you/829075001/

  • MasterThief||

    If the standard deduction is doubled, then that bottom bracket is still meaningless as the poorest will continue to pay nothing.

  • Devastator||

    That's what I keep telling the retards but no one is listening. This is all about giving tax cuts to the 0.1% and the middle finger to the middle class. "Here's a few years of middle tax cuts and then you'll be paying more, fuck nuts"

  • Pershing48||

    Hey idiots, I believe Grover was referring to the Byrd Rule, not "Bird Law" as you're transcriber typed it.

  • Devastator||

    Nobody gives a damn if it's Byrd or Bird. Jesus.

  • Devastator||

    Sure he is. He's planning on all that gravy and biscuits while he watches the middle class fight over the bread crumbs. I agree with the corporate tax cuts, but not all the hand outs to the 1% and scraps tossed to the middle class is ridiculous, why the fuck do we vote these self serving clowns in? Populist movement my ass, more like a bowel movement on the peasants.

  • PTSD||

    "Government by Groupon" is the best line in here.

Click here to follow Reason on Instagram

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online