Is Grover Norquist’s “Sharia Tax Law” Causing The GOP To Rethink It’s “Pledge”?
Senator Tom Coburn, a conservative Republican from Oklahoma, has had the good sense to demand an end to the $5 billion annual tax credit to makers of corn ethanol, a wasteful subsidy to farm states that is also dubious environmental policy. For his outspokenness, Senator Coburn was pilloried by anti-government activists of his own party who cannot stand the idea of more revenues flowing into the federal Treasury. But he and a few others in the Senate are holding fast, suggesting that at least some Republicans are willing to break with party orthodoxy to reduce the long-term budget deficit.
The loudest criticism came from Grover Norquist, whose group, Americans for Tax Reform, is the author of the Taxpayer Protection Pledge that has become a sacred covenant for virtually anyone wishing to run as a Republican. More than 95 percent of the Republicans in Congress have signed it (including Senator Coburn), as have many Republican governors and state lawmakers.
The pledge is often thought of as an agreement never to vote for raising taxes for any reason, but it goes even further than that. Those who sign it also vow never to eliminate any tax deductions or credits (like the handout to ethanol makers), unless the resulting increase in revenues is offset, dollar for dollar, by further tax cuts.
The pledge is really less about keeping taxes low than it is about holding down government revenues, which prevent the growth of government services. Mr. Norquist has famously said his goal is to shrink government “down to the size where we can drown it in the bathtub.”
Mr. Norquist can afford to be candid about his fierce aversion to government services, since he does not have to run for office with the votes of people who like those services. The Republican lawmakers who have joined his congregation, however, are less forthright about the effect of their policies. They go around lulling constituents with phony mantras like “Washington doesn’t have a revenue problem; it has a spending problem,” as if cutting spending is the only conceivable solution to lowering the deficit.
This purity finally ran into a tough-minded pragmatist in Senator Coburn. Though his zeal to eliminate many worthy government programs is still excessive, he is right to see the wastefulness in the ethanol giveaway — and the extremism of Mr. Norquist’s position. Senator Coburn’s spokesman has even described Mr. Norquist as “the chief cleric of Sharia tax law.”
Senator Coburn is also a member of the “gang of six” senators that has been trying to find a bipartisan way to reduce the nation’s debt. He and the two other Republicans in the group, Saxby Chambliss of Georgia and Michael Crapo of Idaho, say they are opposed to raising tax rates but hope to rewrite the tax code in a way that brings in more revenue by eliminating many unnecessary tax breaks and broadening the tax base.
That, at least, represents the beginning of a useful conversation. It could very well mean that the rich would pay more in taxes. Which is why Mr. Norquist, in full grand-inquisitor style, has demanded that Senator Coburn drop out of the gang.
His influence, happily, seems to be on the wane. The three senators have reminded Mr. Norquist that their highest oath is not to him or some abstract pledge, but to support and defend the Constitution of the United States.
By: The New York Times, Editorial, April 21, 2011
Courage Of Convictions: The Tax Collector And The Republican
Congressional Republicans constantly remind us that principle is more important than principal. They are willing to shrink government at all costs. The latest example comes from the new budget agreement that has an impact on the IRS and tax collections.
Tax collection is one of the IRS’s principle functions as we are all reminded this time of year. There are some who not only refuse to cheerfully pay what they owe but actively take steps to avoid paying taxes they owe. As a result, some IRS employees have as their main job, identifying those people and taking steps to encourage them to pay what they owe.
In 2006, Republicans in Congress came up with a whole new approach that provided employment to the non-governmental sector, a group that is always favored by Republicans. (That is because Republicans know that those who work for the government tend to be lazy and inefficient whereas those in the private sector are hard working and productive. That is, of course, something of a generalization, since occasionally someone in the private sector will disappoint and prove to be lazy and/or unproductive.)
Because of the Republican belief in the virtues of the private sector (which is almost as fervent as its belief that in taking funds from programs for children and the poor it is doing God’s work), in August of 2006 it was announced that within a couple of weeks the IRS would turn over to private collection agencies 12,500 delinquent tax accounts of $25,000 or less. According to the New York Times, this new way of collecting taxes was thought up and put in place by the Bush administration. The plan had, like many plans do, an upside and a downside.
The upside was that the debt collectors were part of the private sector. Under the private debt collection system the collectors would collect $1.4 billion each year of which they could keep $330 million, thus lining the private sectors’ pockets by that amount instead of having it go into a government pocket where it would, in all likelihood, get lost. Although that seems like a win-win, in 2002 Charles Rossotti, the Commissioner of Internal Revenue, had told Congress that if it hired additional IRS employees to handle collections, it could collect more than $9 billion each year at a cost of only $296 million, considerably less than the cost if the same work was done by private collection agencies. That came out to a cost of $.03 per dollar collected. According to the NYT, his testimony was correct but Congress didn’t want to swell the size of government by authorizing the hiring of additional personnel for the IRS. Charles Everson, IRS Commissioner in 2006, when the private debt collection program was implemented, agreed with Mr. Rossotti and said it was more efficient to hire more IRS personnel but Congress would not appropriate the funds it needed to do that. Congress’s reluctance is a perfectly sensible approach since if you want to shrink government you have to make sacrifices and in this case, the sacrifice is increased revenue.
In 2008 Democrats took control of both houses of Congress and in March of 2009 it was announced that the IRS had determined that IRS employees could do collection work more efficiently than the private debt collectors, just as Rossotti and Everson had said some years earlier, and there was no reason to continue the program. Senator Grassley, who was the top Republican on the Senate Finance Committee, was outraged. Ignoring the fact that the government would have more money if the IRS were responsible for collections, he said the IRS was caving in to “union-driven political pressure.” He would have rather seen the federal government lose money than take away business from the private sector. The last chapter in this saga, however, has not been written.
Now that the budget compromise had been reached here is one of the things that has happened. The White House had requested an increase in the IRS budget of approximately 9% which would have enabled the agency to hire an additional 5000 personnel. Many of those could have been used to collect taxes which would have helped reduce the deficit. Echoing what Messrs. Rossotti and Everson had said years earlier, Treasury Secretary, Tim Geithner, who testified before Congress in March, said: “Every dollar invested in IRS yields nearly five dollars in increased revenue from non-compliant taxpayers.”
Republicans have refused to authorize the hiring of additional personnel at the IRS in order to collect taxes. A release from John Boehner’s office said increased funding for the IRS had been denied as part of the budget agreement. This shows that the Republican majority has the courage of its convictions. The rest of the country can enjoy the benefits of living off the fruits of its follies.
By: Christopher Brauchli, CommonDreams.org, April 16, 2011
State Crises Mean New Language Of Deceit
For most of history, we had undebatable definitions of words such as “bailout” and “bankruptcy.” We understood the former as an undeserved public grant, and the latter as an inability to pay existing bills. Whatever your particular beliefs about these concepts, their meanings were at least agreed upon.
Sadly, that’s not the case during a deficit crisis that is seeing language redefined on ideological terms.
“Bailout” was the first word thrown into the Orwellian fire. As some lawmakers recently proposed replenishing depleted state coffers with federal dollars, the American Conservative Union urged Congress to oppose states “seek(ing) a bailout” from the feds. Now, Rep. Paul Ryan, R-Wis., says, “Should taxpayers in Indiana who have paid their bills on time, who have done their job fiscally be bailing out Californians who haven’t? No.”
Ryan, mind you, voted for 2008’s TARP program — a bank bailout in the purest sense of the term. But one lawmaker’s rank hypocrisy is less significant than how the word “bailout” is being used — and abused. Suddenly, the term suggests that federal aid would force taxpayers in allegedly “fiscally responsible” Republican states to underwrite taxpayers in supposedly irresponsible Democratic ones.
Aside from stoking a detestable interstate enmity, this thesis ignores the fact that state-to-state wealth transfers are already happening. According to the Tax Foundation, most Republican-voting states receive more in federal funding than they pay in federal taxes, while most Democratic-voting states receive less federal money than they pay in federal taxes.
That means traditionally blue states like California are now perpetually subsidizing — or in Ryan’s parlance, “bailing out” — traditionally red states like Indiana. Thus, federal aid to states could actually reduce the state-to-state subsidies conservatives say they oppose.
Congressional Republicans will undoubtedly ignore these facts. Their proposed solution to the budget emergency could instead be a Newt Gingrich-backed initiative letting states default on outstanding obligations by declaring bankruptcy. Again, the word is fraught with new connotations.
Whereas sick or laid-off individuals occasionally claim a genuine inability to repay debts and thus a need for bankruptcy protections, states can never legitimately claim such a need because they are never actually “bankrupt.” Why? Because they always posses the power to raise revenue. The power is called taxation — and destroying that authority is what the new bankruptcy idea is really about. It would let states avoid tax increases on the wealthy, renege on contractual promises to public employees and destroy the country’s creditworthiness.
Blocking state “bailouts” and letting states declare “bankruptcy” are radical notions, especially in a bad economy. One would result in recession-exacerbating public layoffs; the other would institutionalize an anti-tax zealotry that destroys tomorrow’s middle class in order to protect today’s rich. That’s why advocates of these ideas have resorted to manipulating language. They know the only way to make such extremism a reality is to distort the vernacular — and if we aren’t cognizant of their scheme, they will succeed.
By: David Sirota, Syndicated Columnist, Sun Journal-published March 8, 2011
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