J. Scott Applewhite, Associated Press
Anti-tax activist Grover Norquist, president of Americans for Tax Reform, addresses the Conservative Political Action Conference (CPAC) in Washington.

Yes: The GOP must disavow unelected lobbyist's dictatorial 'no-tax' pledge

By Rep. Lynn Woolsey

WASHINGTON — Sometimes, only satire can capture the absurdity of the moment. A recent headline from The Onion read: "Congressman Torn Between Meaningless Pledge to Anti-Tax Zealot, Well-Being of Nation."

It's funny — and also frightening — because it underscores a basic truth about our politics.

Grover Norquist, an unelected right-wing lobbyist accountable to no one except his wealthy funders, has had the Republican Party in his hip pocket for several decades. All but a handful of congressional Republicans have signed his pledge never, ever to raise taxes. Perhaps no other individual is more responsible for the intransigence and irresponsibility of the modern GOP.

Remember the Republican presidential debate when all the candidates raised their hands to say they would not accept even a budget deal that included $10 in spending cuts for every dollar of tax increases? It was Norquist's power that they feared at that moment.

With the "fiscal cliff" deadline looming, it is time finally for the Republicans to exercise true statesmanship by defying Norquist and asking the most privileged among us to assume a little more sacrifice.

Allowing the upper-bracket Bush tax breaks to expire simply restores the tax rates of the Clinton years, a time of unprecedented, widely-shared prosperity. By contrast, the supply-side/trickle-down philosophy has failed at everything except making the wealthy wealthier.

The money to close the deficit will come from somewhere. If it doesn't come from upper-income Americans, then it will be taken from middle-class working families who have already taken a punch to the gut during this economic downturn. It will come from poor families who need a hand-up to get back on their feet. It will be taken from seniors who have worked a lifetime and earned a dignified retirement.

But the bottom line is this: any cuts to Social Security, Medicare or Medicaid benefits are unacceptable. As a matter of fundamental fairness and moral decency, our fiscal policy cannot be based on coddling those who have the most and squeezing those who have the least.

In fact, Social Security is not paid for out of the general fund and therefore has no impact on the federal deficit.

The Norquist vision, as he has famously said, is a government so small "we can drown it in the bathtub." He apparently believes that people who need government support ought to be washed down the drain. But what we need is a government that helps Americans stay confidently afloat, even through tough storms and choppy waters.

That's what Americans voted for last month. They emphatically rejected Mitt Romney's view that 47 percent of our people are undeserving freeloaders with no sense of personal responsibility. They voted for more progressive taxation; they voted for a fair shake for everyone; they voted for a level playing field and a government that is on their side.

Norquist speaks for a minority faction and a narrow special interest, not for the American people. A Washington Post-ABC News poll from a few weeks ago showed 60 percent of Americans supporting an increase in taxes for every dollar earned beyond $250,000 a year as a way of addressing the so-called "fiscal cliff."

The good news is there are signs Norquist's grip is loosening. Several Republican lawmakers have indicated a willingness to violate the "pledge" in order to solve the deficit problem, though most still want to cut middle-class programs as well.

Norquist has responded with bizarre personal outbursts, equating the pledge with marital vows and saying of one Republican member: "I hope his wife understands that commitments last a little more than two years or something."

It's time for Republicans to break free from Norquist's clutches. For the good of the country and also the Republican Party, it's time to toss Norquist's no-tax pledge over the cliff.

Rep. Lynn Woolsey, D-Calif., serves as national president of Americans for Democratic Action.

No: He may be whipping boy in D.C., but he's a hero to troubled taxpayers

By William F. ShughartII

LOGAN — 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 it's 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 now 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 nowadays, the numbers simply do not work. And even if they did, raising taxes on high-income earners will create incentives for them to sidestep the higher taxes by establishing charitable foundations 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 both Kennedy and, later, President 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.

Since 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 that 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 round.

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.