“Putting The Nails In The Coffin”: Has Grover Norquist And His Anti-Tax Pledge Reached The End Of The Road?
Yet another prominent Republican has added his name to the list of those for whom the allure of the Grover Norquist “Taxpayer Protection Pledge” has lost its luster.
Senator Saxby Chambliss (R-GA) has announced that he will no longer honor his commitment to the Norquist pledge wherein he promised not to raise taxes under any circumstances whatsoever. Appearing on a local Georgia television program, Chambliss said, “I care more about my country than I do about a 20-year-old pledge. If we do it his way then we’ll continue in debt, and I just have a disagreement with him about that.”
While Chambliss expects Norquist to push back on his defection by supporting a primary challenge to Senator Chambliss when he stands for re-election in 2014, Chambliss has decided to take his chances, noting, “But I don’t worry about that because I care too much about my country. I care a lot more about it than I do Grover Norquist.”
While Saxby Chambliss’ sentiment is admirable, is it possible that he has done the math and concluded that the Norquist modus operandi of going after any Republican that dare defy him just doesn’t pack the punch it once possessed?
Judging from the 2012 election results, there is reason to believe that Grover Norquist’s days of bullying candidates into doing his bidding may be a thing of the past.
Going into the elections, 279 Congressional incumbents—along with 286 challengers—had signed the anti-tax pledge. However, at a time when the polls point to an overwhelming number of Americans favoring a rise in the tax rates for the nation’s very wealthiest, some 57 Republican House incumbents or challengers who signed the pledge went down to defeat while 24 GOP sitting Senators or those seeking a seat lost in their race.
Included among the high profile, pledge-signing losers were Senator Scott Brown (R-MA), former Wisconsin Governor and cabinet member Tommy Thompson (R-WI) and two-time loser Linda McMahon (R-CT). Over in the House, long time Congressmen Dan Lungren got beat after a constituent publically challenged him for signing the pledge while two GOP incumbents who had received direct funding from Norquist’s organization, Americans For Tax Reform, in an effort to save their seats, were unsuccessful.
Meanwhile, GOP Senate leaders such as Bob Corker (R-TN), John McCain (R-AZ) and Tom Coburn (R-OK), have become more vocal in their opposition to Grover Norquist and his tactics as has leading conservative voice, Bill Kristol.
Adding what might be the final nail in the coffin for Mr. Norquist’s brand of political blackmail is the fact that the likely GOP frontrunner for the party’s presidential nomination in 2016, Gov. Jeb Bush—while highly supportive of keeping taxes low—has steadfastly refused to sign the tax pledge saying, “I don’t believe you outsource your convictions and principles to people.” The younger Bush follows in the footsteps of his father, President George H.W. Bush, who earlier this year made his own feelings completely clear when he remarked, “The rigidity of those pledges is something I don’t like. The circumstances change and you can’t be wedded to some formula by Grover Norquist. It’s – who the hell is Grover Norquist, anyway?”
Good question—who the hell is Grover Norquist, anyway?
While he has managed to become more famous than most, at the end of the day, Grover Norquist is a lobbyist.
In fact, according to Jack Abramoff—the disgraced lobbyist who went to jail after entering a guilty plea to three criminal felonies involving defrauding American Indian tribes and corrupting public officials—Mr. Norquist’s organization served as a conduit for funds that flowed from Abramoff’s clients to surreptitiously finance grass-roots lobbying campaigns.
The Washington Post reports,
“The federal probe has brought a string of bribery-related charges and plea deals. The possible misuse of tax-exempt groups is also receiving investigators’ attention, sources familiar with the matter said. Among the organizations used by Abramoff was Norquist’s Americans for Tax Reform. According to an investigative report on Abramoff’s lobbying released last week by the Senate Indian Affairs Committee, Americans for Tax Reform served as a “conduit” for funds that flowed from Abramoff’s clients to surreptitiously finance grass-roots lobbying campaigns. As the money passed through, Norquist’s organization kept a small cut, e-mails show. A second group Norquist was involved with, the Council of Republicans for Environmental Advocacy, received about $500,000 in Abramoff client funds…”
Mr. Norquist has denied any wrongdoing in the Abramoff matter and neither he nor his organization(s) have ever been charged for any offense related to the same.
With Saxby Chambliss’s new found independence and willingness to once again exercise his own judgment and regain control of his own vote when it comes to tax matters, expect other legislators—on both the federal and state level—to now join in.
The Norquist era has come and gone—and thank Heaven for that.
Whether you support tax increases for some or detest the very notion of anything short of a decrease in taxes, we elect leaders to think for themselves and to serve the needs of their constituents. Unless you are an elected official from a district that Grover Norquist calls home, Mr. Norquist, and his Americans For Tax Reform, are not a constituency—they are a special interest lobby.
The time has come for a little GOP courage. While Mr. Norquist may have been able to impose his will on Republican incumbents who fear a primary challenge from the right courtesy of Grover Norquist, the reality is that there are only so many such challenges Mr. Norquist can afford to mount. Therefore, the more GOP elected officials who reject the notion of handing over their vote to the likes of Grover Norquist, the lower the odds that these politicians will pay the price for their defection come election season.
The clock on Grover Norquist’s fifteen minutes of fame has expired—and the sooner Republican incumbents and candidates figure this out, the sooner they will be able to impress the voters with their willingness to think for themselves and for their constituencies rather than turning control over to a lobbyist.
How can that possibly be a bad thing?
By: Rick Ungar, Op-Ed Contributor, Forbes, November 23, 2012
Republican Mitt Romney started his campaign calling for big tax cuts, but now he has changed course. He’s warning middle-class families not to raise their hopes too high.
Romney couldn’t have been more emphatic than he was last November at a candidates’ debate in Michigan.
“What I want to do is help the people who’ve been hurt the most, and that’s the middle class,” he said. “And so what I do is focus a substantial tax break on middle-income Americans.”
He put a middle-class tax cut at the top of his priority list: a 20 percent reduction in tax rates across the board.
“Right now, let’s get the job done first that has to be done immediately. Let’s lower the tax rates on middle-income Americans,” he said.
Then, at a debate in Tampa this January, Romney got a little more specific.
“The real question people are gonna ask is, who’s going to help the American people at a time when folks are having real tough times? And that’s why I’ve put forward a plan to eliminate the tax on savings for middle-income Americans,” he said. “Anyone making under $200,000 a year, I would eliminate the tax on interest, dividends and capital gains.”
Shaking Up Tax Plans
But then came Romney’s victory in the primaries, and a new set of goals to meet.
“Well, I think you hit a reset button for the fall campaign. Everything changes,” campaign adviser Eric Fehrnstrom said on CNN. “It’s almost like an Etch A Sketch. You can kind of shake it up, and we start all over again.”
Romney shook up his plans on the tax cuts. He still wanted to lower the tax rates, but now he was more emphatic about the need for tax changes to be revenue-neutral.
In September, he had words of caution for the crowd that filled the gym at a suburban Ohio high school.
“By the way, don’t be expecting a huge cut in taxes, because I’m also going to lower deductions and exemptions,” he said.
In other words, your tax rate might be lower, but your taxable income might be higher. He elaborated in the Wednesday night debate with President Obama.
“I will not, under any circumstances, raise taxes on middle-income families. I will lower taxes on middle-income families,” he said.
But he avoided details. He said he would work with Congress, and he quickly moved to talk about another goal: lowering the tax rate for small-business people.
“If we lower that rate, they will be able to hire more people. For me, this is about jobs,” he said.
Will The Tax Cut Stick?
As the campaign goes on, Romney gives the tax cuts more and more to do: Help the middle class, produce more jobs, keep the same amount of money flowing into the government, and more.
At the conservative think tank American Enterprise Institute, research fellow Michael Strain says Romney has plenty of tax variables he can adjust.
“There are a lot of different levers to pull here. You have the marginal tax rates, you have the amount of income that’s subject to taxation, you have the amount of income that you can deduct from your gross income to calculate your taxable income,” Strain says.
Is a middle-class tax cut possible with everything else? Strain thinks it is.
“In order to do that, you would have to have a specific plan. And we haven’t seen that from Gov. Romney yet,” he says.
But at the nonpartisan Tax Policy Center, co-director William Gale says Romney is caught in a bind.
“He has made a set of proposals that are jointly impossible to fulfill. And so something has to give,” he says.
It may be that what’s giving — as Romney told the crowd in Ohio — is the middle-class tax cut.
By: Peter Overby, NPR, October 7, 2012
According to Bloomberg News, Mitt Romney is taking advantage of a tax loophole to pass off a fortune to his children without paying taxes on it. According to administration figures, this loophole costs the government $1 billion over a ten-year budget window:
In January 1999, a trust set up by Mitt Romney for his children and grandchildren reaped a 1,000 percent return on the sale of shares in Internet advertising firm DoubleClick Inc.
If Romney had given the cash directly, he could have owed a gift tax at a rate as high as 55 percent. He avoided gift and estate taxes by using a type of generation-skipping trust known to tax planners by the nickname: “I Dig It.” [...]
While Romney’s tax avoidance is both legal and common among high-net-worth individuals, it has become increasingly awkward for his candidacy since the disclosure of his remarks at a May fundraiser. He said that the nearly one-half of Americans who pay no income taxes are “dependent upon government” and “believe that they are victims.” [...]
The Obama administration estimates that closing the loophole Romney used would bring the federal government almost $1 billion in the coming decade.
One analyst said that $1 billion is a “laughable” under-estimate of the loophole’s effect, as “a single billionaire could pay $500 million more in estate taxes if these trusts are shut down.”
It’s unclear whether Romney would close this particular loophole, since he refuses to divulge details about his tax plan. However, he has been upfront about his desire to eliminate the estate tax, which only affects the richest Americans. That tax cut would save the heirs of the Koch and Adelson fortunes billions of dollars. As ThinkProgress detailed, the lion’s share of tax breaks doled out in the U.S. go to the very rich.
By: Pat Garofalo, Think Progress, September 27, 2012
Eduardo Saverin, the co-founder of Facebook whose falling out with the company and its CEO Mark Zuckerberg was the subject of the 2010 blockbuster The Social Network, renounced his US citizenship last week, and the right has wasted no time labeling him a hero.
Saverin, who owns a roughly four percent stake of Facebook, announced that he was expatriating last week, just in time to avoid paying a federal capital gains tax on the fortune heading his way when the social site files its IPO.
Forbes Magazine, the conservative-leaning and business friendly magazine, ran an article with the headline “For De-Friending The U.S., Facebook’s Eduardo Saverin Is An American Hero.” John Tamny writes:
Saverin’s departure is also a reminder to politicians that while they can obnoxiously decree what percentage of our income we’ll hand them in taxes, what they vote for won’t necessarily reflect reality. Indeed, as evidenced by Saverin’s renunciation, tax rates and collection of monies on those rates are two different things. Assuming nosebleed rates of taxation were a driver of Saverin’s decision, politicians will hopefully see that if too greedy about collecting the money of others, they’ll eventually collect nothing.
Tamny seems to be convinced that Saverin’s departure will open the floodgates for dozens of US executives, investors and other wealthy businessmen who have made fortunes off of stocks and bonds to dramatically renounce their citizenship, break through the shackles of big government and book a one-way ticket to wherever in an attempt to hold on to every last penny they’ve earned. What Forbes and The Heritage Foundation ignore is that the capital gains tax is at a historically low rate, and even proposals to increase it slightly would still fall well short of approaching the rate during the 1970s.
Saverin’s decision to flee the United States is also remarkably shortsighted. As Farhad Manjoo notes on PandoDaily today, Saverin’s life story in particular is one that is quintessentially American.
By: Adam Peck, Think Progress, May 14, 2012
President Obama and Senate Democrats have been trying to implement the Buffett rule, a minimum tax on millionaires, which would remedy the problem of millionaires being able to pay lower tax rates than middle class families. One state lawmaker in Iowa thinks his state needs its own version — the Branstad rule — after Gov. Terry Branstad (R-IA) was able to pay just $52in state income taxes on his nearly $200,000 in income:
Gov. Terry Branstad’s $52 state income tax bill in 2011 is proof that fixes are needed in the tax system, Sen. Robert Hogg, D-Cedar Rapids said today.
“Some people talk about nationally we need a Buffet rule, maybe in Iowa we need a Branstad rule,” said Hogg, who additionally noted that a person making between $30,000 to $40,000 a year can expect to pay somewhere around $1,000 or more in state income tax.
Branstad was able to pay such a low amount because Iowa is one of just six states in the country that allows residents to write off their federal income tax payments from the previous year on their current year’s tax return. So Branstad was able to apply his 2010 federal income tax payments — which were paid on the salary he received from his prior job as the president of Des Moines University — to this year’s state income tax bill.
Iowa loses $642 million annually due to this provision, nearly one quarter of its total income tax revenue. More than half of the benefit of the deduction goes to the richest 5 percent of Iowans, while 76 percent of the benefits go to the richest 20 percent. “States should take a hard look at eliminating, or at least capping, their deduction because of the impact this lopsided tax policy has on state budgets and tax fairness,” the Institute for Taxation and Economic Policy wrote. Branstad’s administration called his low tax bill an anomaly.
By: Pat Garofalo, Think Progress, April 25, 2012