This week we’re joined by Grover Norquist for a frank discussion about every libertarian’s favorite part of the government: its tax-collection arm. Norquist shares how he got into politics, the idea behind his infamous tax pledge, and his plan for reining in the government’s power to tax its citizens.
What’s the right amount of taxes? Zero? How do we get there? Given our nation’s anti-tax roots, have we become too complacent in paying taxes?
Show Notes and Further Reading
Grover Norquist, End the IRS Before It Ends Us: How to Restore a Low Tax, High Growth, Wealthy America (book)
Trevor Burrus: Welcome to Free Thoughts from Libertarianism.org and The Cato Institute. I’m Trevor Burrus, a research fellow at The Cato Institute’s Center for Constitutional Studies.
Aaron Ross Powell: I’m Aaron Ross Powell, editor of Libertarianism.org and a research fellow here at The Cato Institute.
Trevor Burrus: Joining us is Grover Norquist, President of Americans for Tax Reform. He is the author of the new book End the IRS before It Ends Us. Welcome to Free Thoughts, Grover.
Grover Norquist: Good to be with you.
Trevor Burrus: So before we get to your new book, I wanted to talk a little bit about your background and how you got into politics in Washington DC. What was your first political job that you ever had?
Grover Norquist: I was in seventh grade. I went down to – I got on the train from 12 miles outside of Boston, into Boston to go work on the Nixon campaign in ’68.
Trevor Burrus: What made you such a believer? Is it just you love the politics or were you already a fervent republican at the time?
Grover Norquist: No, I was an anti-communist.
Trevor Burrus: OK.
Grover Norquist: And from there, I decided I didn’t like my government all that – my government all that much. So the Soviet’s first anarchists. Get rid of theirs first and start working on ours in terms of size and scope of government.
Trevor Burrus: Maybe that would explain it. So you went from …
Aaron Ross Powell: What did you do on the campaign as a kid?
Grover Norquist: As a kid – I was a kid. I sorted addresses for people that were either trying to raise money from or get out the vote from. So basically they were three by five cards with addresses.
Trevor Burrus: Wow.
Grover Norquist: And making sure they were all in.
Trevor Burrus: Databasing basically.
Grover Norquist: Yeah.
Trevor Burrus: Yeah.
Grover Norquist: Yeah, the little boxes. It’s scary how …
Trevor Burrus: Far we’ve come or …
Grover Norquist: Yeah. Scary how far back we were.
Trevor Burrus: So did you work on every campaign since ’72 and ’76?
Grover Norquist: I did. I worked on the congressional campaigns in – it was the fourth congressional district in Massachusetts, all of our unsuccessful efforts to defeat Father Robert Drinan and so I was involved in those and then back in again after college, in ’80 for the Reagan campaign.
Trevor Burrus: OK. And you also worked at National Taxpayers Union, correct?
Grover Norquist: Yes. Well, as soon as I finished college, graduated in ’78, I rented a van and I drove down with my stuff and James Dale Davidson’s stuff that he had asked me to bring down from Boston, to DC, to be the associate director, number two guy at the National Taxpayers Union and within a month or so, I was the executive director because the executive director moved down the street and that was the year of Proposition 13.
So it was a real baptism of fire. It was – people called you. You were just out of college, 20 something, and Time magazine is calling for opinions out there and these guys have no idea what they’re talking to.
But you realize that there are no rules in politics. There’s no age requirement. There’s no license. They can’t tell you that you can’t do that and first of all, the whole taxpayer movement was a bunch of people who didn’t have permission to get involved with politics.
If the people had permission to get involved in politics and made all the decisions, then they just kept raising taxes. But you – so Prop 13 that year and there were a dozen other states with initiatives and I worked on all of that.
Trevor Burrus: Which was one was Prop 13? Are you …
Grover Norquist: Proposition 13 was California. Cut the property tax to a – basically in half and then it limited the growth of assessments up two percent a year and it required a two-thirds vote to raise taxes. There are a bunch of very good solid protections there. Simple.
So it wasn’t one of these very complicated percentage of GDP measures, which as interesting as they were, they were flawed because they were too complicated and they were hard to sell to people and hard to defend. Two-thirds to raise taxes. Everybody gets it. Everybody gets two-thirds. It’s on purpose, to be more difficult than half, and people can do two-thirds. If you do three-fifths, they think it’s counting slaves and they have to look at their fingers. Two-thirds they can imagine the pie. They get two-thirds. It’s a much more popular number than three-fifths.
Trevor Burrus: This old idea of – you’re thinking about messaging and what people get and what does this employ of selling a limited – really ties into the pledge. But before we get to the pledge and ATR, you also had a period where you were working with anti-Soviet guerillas which I wanted to ask you about. But would that …
Grover Norquist: Sure. During the Reagan years, I spent some time in Angola working against the Cubans there and helped organize a meeting of the various resistance movements from Central America, Africa, [0:05:00] Afghanistan, Laos, and we did that in Angola, a little conference. I spent a little bit of time up on the border in Afghanistan. That was a complete mess but at the time, it was a lot of concern about Soviet Union and it’s present with occupation at the time of Afghanistan.
Trevor Burrus: And was that private? I mean you did that just on your own or was it through the government that you got involved with it?
Grover Norquist: No. It – I did some writing and worked with Savimbi and was trying to just be helpful to bring attention and support to those political movements which I think were very helpful in weakening the Soviet empire without costing the United States a lot of money and no American lives. Not much American money compared to other ways to organize these things and it led to the Soviet Union and eventually the Soviet Union collapsed and ceased to exist as an entity. So it was a smart move compared to other ways to have done things.
Aaron Ross Powell: What does such a meeting look like? I mean I’m just curious. You’ve got all this resistance.
Trevor Burrus: I’m picturing AK-47s involved somewhere.
Grover Norquist: It is interesting because everybody has got the funny hats, right? The guy from Afghanistan has the big military hat and the guy from Laos is freezing because nobody told him that it got cold at night in the desert. It was very interesting.
I drafted the joint declaration they put out. I typed it on a Portuguese typewriter without looking down and the Portuguese typewriters transposed like T and S and R and M or something. Absolute gibberish if you looked at it. So you had to redo the whole thing.
But it was very interesting. Basically it was making the case that this is a common cause. Making the case that this was an anti-imperial movement just as existent in Latin America against Spain, as existent throughout the world in the 60s against Britain, France, and the Netherlands and Belgium and the various imperial powers and the remaining large imperial power was the Soviet Union. That was a big deal because that really bothered the Russians and the Soviets to think of themselves as an empire pressing people.
It wasn’t just places like Cuba and Mozambique and Angola and Ethiopia. It was places like Ukraine and that’s what really took them apart was the idea that they had to cease to be an imperial power.
Trevor Burrus: Now in ’85, you started ATR at the – it was at the request or suggestion of Reagan?
Grover Norquist: The White House put it together and then they asked me to run it. So it was sort of like Organizing for America, which the Obama people put together and it’s sort of – we were the grassroots organizing campaign for – in support of what became the Tax Reform Effort of ’86.
I don’t know that they had ever done that before. We never had a conversation about, oh, we did this for a trade bill or oh, yeah, we did this for the first Kemp Roth tax cut.
I think this was the first time out because it was not put together the way out of organized [Indiscernible] that I was running from the start. But it was a good start and we ran a campaign in support of lower marginal tax rates and I created the Taxpayer Protection Pledge as part of it because there were a lot of people who were worried that if you cut the rates, drove the rates down, broadened down the base, over time, the rates would creep back up and you would lose even the protections of the deductions and credits.
So the pledge was a written commitment to oppose raising rates or broadening the base unless it was revenue neutral or better. We had 100 members in the house and 20 in the senate who signed. That was enough to guarantee that they would never go into a dark room and come out and say, “We’ve got this tax increase. You have to eat it now.”
We kept building on that to where after the ’94 election, we had 90 plus percent of all the republicans and majority in the house and senate.
Aaron Ross Powell: But this pledge – I mean politicians all the time stand up and say, “I promise not to raise taxes,” or “I promise to do this, that or the other thing,” and those promises have no teeth. But the pledge seems to carry more weight than other …
Trevor Burrus: Anything that is comparable.
Aaron Ross Powell: Yeah. So I mean what – why?
Aaron Ross Powell: Sure. There’s a reason. One, it is one issue, one sentence. No, not tax increase. Second, it’s in writing and third, it’s without context. The reason why politicians can lie so easily and – is that [0:10:00] they’re not completely lying. Taxes are the last thing we need to do.
This is not the time to raise taxes. I think we should cut spending rather than raise taxes. None of those people promise not to raise taxes. You heard them and you thought they weren’t going to raise your taxes. What they were telling you is how pained they would be when they raised your taxes, that they wouldn’t do it now. But now is OK. Well, I said then was not the time but now is the time.
So the pledge – somebody in the speech says, “I don’t want to raise taxes,” but five paragraphs before, they said, “I really cherish education.” The guy will come back and say, “Did you not read the whole speech?” In context, I was clearly going to spend through my nose and you should have seen that coming.
The pledge is not attached to anything. It’s disembodied. It is one sentence. It doesn’t go away. At the time, we faxed it to people and now it goes online and people can get copies of it, the press. The people would sign the big pledge and take pictures. You hand copies of the signed pledge out.
It was a way of saying this commitment doesn’t disappear. There’s no qualifier. There’s no weasel word. Other people have like 25-part questions or statements or yes-no things that they want on so many different issues and there are weasel words in there. We can’t – I won’t do too little.
Trevor Burrus: Unless necessary.
Grover Norquist: Yeah. What was happening – so the reason it’s so stark, it’s also so moderate. There’s no tax increase. People would come for years. We weren’t butting up against the “need,” the demand for tax increase. So people say, “You should change the pledge to be a cut, 10 percent.”
Well, if you move it around over time, it loses its power. So when the politicians came up against it in 2010, 2011 and it helped save us $1.4 trillion. It’s what the Obama people wanted as part of their tax deal and what some people would have given them.
But because we had the pledge, it protected. It also means you can’t get enough republicans to break with everybody else when so many have signed the pledge because one guy might want to break and we did have some unexpected people who wanted to break Coburn, who’s very good on spending and not so good on taxes. But every time he would run out, he was in fact all by himself and had to come back. So while people would have impure thoughts from time to time, nobody pulled the trigger on it.
Aaron Ross Powell: Doesn’t something like the pledge though contribute to the problems in Washington, if you’re tying the hands of these politicians? Like there may be emergency situations or instances where we just have to raise taxes and suddenly you’ve got all these people who want a piece of paper. You said it has teeth, are terrified to make those necessary compromises.
Trevor Burrus: I have a friend, a leftist friend. When I told him I was doing this episode, he goes, “You should ask Grover. Would he relinquish the pledge in like an asteroid situation?” Like basically that movie Armageddon.
Grover Norquist: Yes.
Trevor Burrus: Because he thinks that we’re just sort of going to drive everyone over the cliff.
Grover Norquist: Yeah, and asteroids coming for the planet. Raising taxes would help how?
Trevor Burrus: Yeah. I mean good point.
Grover Norquist: There has been a flood. Everyone in town is poorer. We must now raise taxes. What? Now is the time not to raise taxes and everybody in town is now worse off.
It’s a very good question and the power of the pledge comes from the fact that the pledge is so simple. It’s easy to understand and it’s actually two parts. The first part is state and the second part isn’t.
First part is I won’t raise taxes. Second part is when there’s a problem, I will reform government to cost less. I will prioritize. I will govern. I will make decisions. We will spend more on this and less on that because we have this new situation.
Without the pledge, what politicians do is they simply paper over all existing problems with additional revenue and if they want to do something new, they don’t stop doing anything old or dysfunctional of counterproductive. They just add the other on and you just collect barnacles on the ship and taxes are what you do instead of governing.
So the commitment not to raise taxes is a commitment to govern. The pledge drives the Paul Ryan budget reform. The pledge drives the sequester that caps government spending for the next decade and without the pledge, we wouldn’t have that.
So don’t raise taxes drives limit spending, drives reform government to cost [0:15:00] less and saying you would raise taxes is simply saying I won’t reform government.
Trevor Burrus: Someone on the left would definitely say that’s all well and good. But the pledge is actually just an unwillingness to compromise and an unwillingness to compromise is an unwillingness to govern with the other side. So that’s why republican obstinancy is such a problem and it’s the reason that our political system is stuck in the mud.
Grover Norquist: Says the party that won’t agree to anything without a tax increase. OK. No, they’re just wrong. People who tell you that they look – they wish for – they long for the good old days of bipartisan compromise are telling you how old they are because many years ago, the two parties didn’t mean anything at all. They’re just the northern party and the southern party and the fact that somebody was a republican meant they were born north of the Mason-Dixon line and he didn’t know anything else about them.
They might want bigger government, smaller government. You didn’t know. They were born north of the Mason-Dixon line and everybody in Dixie was a democrat even though they may be conservative on some issues as opposed to left or liberal.
During Reagan’s lifetime, the two parties separated themselves out. One wants to be left alone in the key zones. One is a Takings Coalition, who have used the proper role of government as taking things from some people and giving to others and so instead of the old compromise which was Nixon wanted the government to get bigger and Ted Kennedy wanted the government to get much bigger, very easy to compromise between bigger and much bigger. You get sort of bigger and every year, the government over time gets quite large because you’re compromising over the speed of moving in one direction.
We now have two parties, one of which actually wants smaller government and one of which clearly wants larger government. Somebody wants to go west. Somebody wants to go east. What in the heck would a compromise look like? They don’t make any sense and raising taxes is not compromising. It’s losing.
Aaron Ross Powell: Isn’t the pledge – you say that the pledge so that – the no raising taxes part and then there’s the second part which is you’ve got to govern. But isn’t the pledge really just incentivizing, getting politicians to, sure, not raise taxes but instead just drive up deficits? It’s not committing them to …
Trevor Burrus: It’s not a spending.
Aaron Ross Powell: It’s not a spending pledge and so we get republicans passing programs that are going …
Aaron Ross Powell: But then not paying for it. So are deficits worse or better than taxes?
Grover Norquist: Well, you get the deficits. Taxes drive to the point – to the breaking point. All taxes are raised to the breaking point, to the point where politicians’ careers are broken. Then they pull back and the deficit, the debt, is driven to the breaking point, to the point where people lose elections over it.
So it’s not as if raising taxes is instead of deficit spending. When Clinton raised taxes in ’93 with only democrat votes – because we had everybody taking the pledge on the republican side or almost everybody and not a single republican voted for his tax increase.
The projected deficits under Clinton were 200 billion all the way through because they decide 200 billion is what they could survive politically. They raised taxes and then added the 200 billion and that was the budget path.
Now because they lost the house and senate in 2004, they couldn’t do the spending they planned to. We actually ended up in balance. But that was not their plan. It wasn’t that the revenue came in and balanced the budget. It was that spending was – are down because the spending they had planned weren’t allowed.
So now the democrats spend as much as they can get away with including a certain amount that they think they can get away with for deficit. The establishment press screams when they think the deficit is caused by a tax cut and there is complete silence. I mean how often have you heard Tom Brokaw talk about Obama’s deficits? Never. It’s not a discussion point because – and when I was at college, I was told that all this talk about 70, 40, 70 and all this talk about deficits was a dirty trick by republicans to stop deficit spending which was a good thing and so deficits was a dirty trick to talk about deficits.
When deficits could be used as a weapon against tax cuts, then all of a sudden deficits became a big interest than what the democrats under Clinton wanted to spend. Deficits ceased to exist as an issue. It’s what they use to try and stop to lower taxes and they never use it to stop spending.
Trevor Burrus: With the pledge, you’ve been called the most powerful man in Washington. You’ve been called many worse things by many people.
Grover Norquist: Yeah, that’s a tough one. Stop being mean to me.
Trevor Burrus: Does it ever surprise you that – how well it has worked and the kind of compliance rates?
Aaron Ross Powell: What are those compliance rates? How many people break the pledge in a given congress or …
Grover Norquist: Well, George Herbert Walker Bush.
Trevor Burrus: Read my lips.
Aaron Ross Powell: Yes.
Grover Norquist: He took the [0:20:00] sins of the world on himself, so nobody else would have to do that.
Trevor Burrus: And then we march him off into the wilderness like a good scapegoat.
Grover Norquist: Yes, exactly. That’s what happened. Nobody’s life is a complete waste. Some people serve as bad examples and children look at that, don’t do that.
I remember my parents pointing out a street person years ago. Don’t do that, kids. Don’t grow up and do that. They did the same thing with Bush. Don’t grow up and increase taxes. This is bad.
When Bush raised taxes in 1990, he won the primary because he signed the pledge and Dole didn’t. That’s why he beat him in New Hampshire. He won the general because he said, “Read my lips. No new taxes.” He was 14 points down when he said that. He was losing to Mike Dukakis and he said, “I’m Ronald Reagan. I won’t raise your taxes.” People said, “Oh, we thought you were George Bush. OK. We will vote for you.”
He won because he was the guy who would not raise taxes. He was going to govern. It was Reagan’s third term. But he didn’t. He raised taxes in ’90 because his advisers were the smartest guys in the world, they tell me. He said you’re allowed to lie to the American people. They don’t owe – you don’t owe them anything and he bought it and he treated the people the way French kings would treat peasants. The nerve of these people to ask me!
Bush said that. He was on one of the covers of Parade Magazine. He and his wife had this feature and where they’re supposed to be talking about life in retirement. He certainly lashes out at me. Who is Grover Norquist? What? Geez, Louis!
He keeps bringing up his self-defeating mistake. He had a very successful presidency, if you look at – imagine the collapse of the Soviet Union without blood on the floor. A lot of people thought the Soviet Union might go down but – there would be an awful lot of blood on the floor.
He drove Iraq out of Kuwait and didn’t get stuck occupying the place for a decade. A lot of wisdom, a lot of common sense. He would have won except for one problem. He raised taxes. He broke his word and all the republicans watched that and said, “I get it. Take the pledge. Win the primary. Take the pledge. Win the general. Take the pledge. Lose. So keep the pledge and win.”
We’ve had almost nobody at the federal after Bush. After Bush, everyone said, “Don’t do that.” Again, this is a guy who was up at 90 percent during the Iraq war and people said he was in fine shape and I said, “No.”
When that calms down and people focus on the tax thing, he’s still in trouble and he was.
Trevor Burrus: So it has been 25 years since a federal republican …
Grover Norquist: Yeah, there are some guys at the state level who break the pledge and former governor of Pennsylvania signed the pledge, broke it and didn’t get reelected. So there are some local – sometimes you have to relearn these things, that some states are slower than others.
Trevor Burrus: Does it ever surprise you – the way people talk about it too when they say, “Well, Grover released me from the pledge,” or “Grover is holding my feet to the fire …”
Grover Norquist: I’m glad that your listenership will – they should write this down. The pledge, if you read it, is not to me. It doesn’t say, oh, I pledge to Grover Norquist. It is to the American people. It is the people of their – it says to the people of my state and the American people that I will vote against and oppose all efforts to raise taxes or if you’re running for president, I will oppose and veto any efforts to raise taxes.
So the pledge is to the American people, which is what – the idea that somebody could – it’s like that scene towards the end of the Godfather Part 1. Could you get me off the hook for old time’s sake? Sorry, I can’t.
I have to say to these guys, “Hey, you didn’t promise me anything. You promised the voters. You go tell them that you lied to them. Don’t come and tell me and ask for pardon or something.”
I did get repeatedly asked to be the most powerful man in the United States by 60 Minutes when they did a six-hour interview to get about six minutes of airtime. You know, where they’re looking at your pores, because they kept asking the same questions and I kept giving them my answer, not the answer they were hoping to write …
Trevor Burrus: They wanted you tackled and say, “I am the most powerful man in America!”
Grover Norquist: Yes, yes, yes! Then they beat me senseless for the next 12 minutes of the show. My answer was – is the tax issue is the most powerful issue in American history. Go back to the founding of the country. The country almost split. My book End the IRS before It Ends Us is all about the history of taxation and how it shaped the country.
Everyone thought the country was going to split. Everything West to the Alleghenys would go to Spain or France or Britain or independent and we would only end up with a short line and that was [0:25:00] exacerbated by the whiskey tax and …
Trevor Burrus: One of the great moments in American history.
Grover Norquist: Yes, you’re right. The excise taxes that they put on. Then the excise taxes faded because that’s how come Jefferson and the democrats – republicans won for 24 years. They said to repeal the tax and they did it. Jefferson’s advisers told him. You don’t really have to repeal that, now that you won. Luckily for him …
Grover Norquist: We weren’t lying at the time. But then the country almost split north-south in 1830. South Carolina called out the militia in 1830, 1831.
Trevor Burrus: The Nullification Crisis.
Grover Norquist: Yeah. What they want to nullify was the tariff and then the Civil War – there was a big part of the Civil War that was the tariff. If there had never been any slavery, we would still have the Civil War. It just would have been over the tariffs instead of slavery.
So it has been a huge part of our – it’s the – it’s a very powerful issue and what Americans for Tax Reforms – Taxpayer Protection Pledge does is it clarifies where people stand. You’ve signed the pledge or you haven’t. It’s very binary. There aren’t grays and politicians come to me and say, “Well, I’ve never raised taxes.” I said if my neighbor came and said, “I’ve never eaten your cat, but I won’t put in writing that I won’t,” I would keep the cat inside.
Trevor Burrus: Now the book as you mentioned is called End the IRS before It Ends Us. Is that title too hyperbolic?
Grover Norquist: It is not. It wasn’t my choice but I didn’t – the publisher liked it. I like it now. I think it’s not too hyperbolic. There are two ways in which you mean get rid of the IRS. The first is the way that Bill Clinton said. Get rid of welfare as we know it. Get rid of the IRS that’s political, the is corrupt, that targets people that they don’t like, that has six – the amount of time and effort that people have to put into it, the number of pages in the code. It’s much too complicated. It’s much too crazy. No one can fully understand it or even comply and not break the rules somehow, not meaning to.
You’ve seen the ones. That’s 10 different people who do the same tax reform – that tax payment and they get 10 different answers from experts and nine of those guys the government could decide should go to jail because they tried to cheat you.
So I think that ending the IRS as we know it, even if you kept the income tax, is a necessary step. It’s not sufficient. You wouldn’t want a pleasant structure that still took 20 percent of GDP and dis-incentivized work saving and investment. Can we do without the income tax, federal income tax?
Well, the first answer is we did until 1913, so obviously you can. There are nine states that don’t have income taxes, never have. Well, Alaska had it and then they didn’t. But nine states don’t have income taxes. As we get more and more states deciding to shed the income tax, Kansas is on track to do that, North Carolina. Mississippi has been taking votes to put themselves on that track. Watch Arizona and Maine.
These states are all saying, “Our goal is to get to zero.” We have a campaign 50 in 2050, which is to have 50 states without a state income tax by 2050 and I don’t expect to do any campaigning in New York or California or Illinois. I expect to win all the states around them and drain the swamp of talent, youth and resources and jobs and California will get the joke or they won’t.
Trevor Burrus: That’s like another guerilla action.
Grover Norquist: It is, it is. We will take the countryside and surround the cities and starve them out for capital people and young people. So I think there’s some real – the answer is yes, I think we can get there. But it does take a very serious focus on reducing the size and scope of government, on reforming all our pensions to make them define contribution rather than defining benefit, to take all of the welfare structures and block grant them to the states.
So you have the 57 states compete on how to provide these programs and to get cost down. So I think that we can get there. The first part should be done in the next few years. The second part will take that …
Trevor Burrus: You said 57 states. You mean all the territories in DC and …
Grover Norquist: No, I’m making fun of the president.
Trevor Burrus: OK. Did he say that?
Grover Norquist: Yes.
Trevor Burrus: Oh, OK. I missed the joke.
Grover Norquist: He had talked about visiting all 57 states in the campaign.
Trevor Burrus: Oh, OK.
Aaron Ross Powell: [0:30:00] What is the appropriate amount of taxes?
Grover Norquist: Lower, less.
Aaron Ross Powell: OK.
Grover Norquist: Samuel Gompers whose statue is like across the street and I keep waiting for you guys like to put a mustache on there or something. But Samuel Gompers was a leader in the 1870s, 1880s who hated Chinese and Japanese people, but otherwise was an interesting character.
He – when asked, “What do working people want?” he said more. I mean there isn’t some number. What do we want? Government to cost less. We want to be more efficient, more effective and less intrusive in people’s lives. So 20 percent of GDP spent by the federal government is too high. Ten percent strikes me as probably still too high.
But when we get to 10 percent, we will have a conversation with the nation and if everyone says this is swell, I will retire and write murder mysteries. But my guess is we will keep going to nine, eight, seven and see how far it would go.
Trevor Burrus: At what point can you drown in a bathtub? That quote, it’s amazing. Does that surprise you, how much that quote has followed you around …
Grover Norquist: Well, it is. Because the original quote, the full quote is my goal – this comes to what you want. My goal is to reduce the size and scope of government as a percentage of the economy in half over 25 years and then in the next 25 years, to drop it in half again. Then I think the question was, “Do you keep going?” I said, “Well, ultimately you want to reduce the government down to the size where you could drag it into the bathroom and drown it in the tub.”
So that’s the exaggeration. But the first two are I believe exactly what we can do, what we should do. Take government from 20 percent of GDP down to 10 and then from 10 to 5 as the economy grows. It’s not the government doesn’t have to get teeny but just smaller compared to the rest of our resources.
Aaron Ross Powell: What’s the path to getting there? Because on the one hand, getting Americans to get upset at politicians who raise their taxes from whatever they happen to be now is – I mean people don’t want to pay more than they are and everyone would like to pay less. But as you mentioned, getting – I mean really dramatically reducing the size of government is going to involve doing away with pension programs and replacing them with savings and at some point, people love to pay less but then they’re not so willing to give up the things that they have. I mean you start running into American voter constituencies that are benefiting from this stuff.
Grover Norquist: Yeah, I think it’s overstated, the actual desire that people have for bigger government. Half of the federal government is 20 percent of the economy. Half, 10 percent of the economy, was enacted in two two-year periods, so four years of American history created half of our federal government. Thirty-four to thirty-six, New Deal, and 64 to 66 Medicare and Medicaid, social security, food stamps.
So there were some seeds planted in those four years and it happened when you had several landslides in a row for the democrats. They had super majority so they could do everything they wanted and they put in seeds that over time grew and it was never easy enough to cut down the tree or putting it back. It just kept growing.
The Ryan budget plan, that’s Paul Ryan’s budget plan, I write about that in the book, is that it makes all these reforms now, but they’re all ones that over time bend down the cost curve of government to where instead of 30, 40 years, now costing 40 percent of GDP, it takes it from 20 back to 20 and that’s assuming no economic growth from better policies. I think it does much better than that. But at a minimum, it cuts government in half over the next 30, 40 years from where it would otherwise be.
That you do would by reforming government – not cutting it. If you want to cut something 10 percent, it’s like chopping somebody’s head off. It’s scary. But if you say we’re going to lose weight and you do it over time, that’s a lot easier to deal with. You do it all at once. Chopping somebody’s arm off is scary. But allowing somebody to lose weight over time is not scary. It’s healthy.
So this is where I think we’re in a position to – and you need to get 51 votes in the senate, a majority in the house which is four times voted for, Paul Ryan’s plan and a republican president with enough digits to sign the bill and then that puts you on a U-turn from our present road to serfdom. Presently we’re going to Hades not as quick as we were three years ago, but we’re still heading in the wrong direction. We’re going to end up like France and no one will bathe or anything. So we need to fix this.
Trevor Burrus: Is that going to be too much of a bitter pill though? Because dovetailing off of Aaron’s question, would those [0:35:00] kind of cuts – it would hurt some people at some point. Would that mean that you’ve actually signed that plan – if you were a president who would sign that plan, you would probably lose in the next election?
Grover Norquist: Well, the president of the United States just signed a bill which in that present value drops federal spending by $3 trillion. That was the doc fix bill. In the first 10 years, the government spends $100 billion more than it did. That’s what they focused on.
Politicians like street criminals have short time horizons. I will smash the window. I will steal the watch. I will go to jail. Damn! I didn’t think this all the way through. OK.
Politicians, if you say, “Shiny thing here,” and all you have to do is bend the cost curve on some of these Medicare payments down – not cut them in half. Just bend the cost curve down to where over the next 75 years. The net present value is $3 trillion over time. It’s a lot more than that but – and that’s what the deal will be. Here is something today, to make you happy. The price of that and what you get is not tax increase but a one-time spending deal.
Then in the future, you alter the cost curve on entitlements and you can drop trillions in real time. So could a republican president do that? Well, democrat presidencies did. Three trillion, not bad.
Aaron Ross Powell: Doesn’t that commit us to trusting them in the future though?
Grover Norquist: No, it doesn’t because this is a law in the same way that social security Medicare and Medicaid grew. That was just the law. Nobody went and said, “Now, we will add to this. Now, we will add to this,” on a regular basis. It just grew over time because of the way it was designed and so those reforms – if you move from define benefit to define contribution, tremendous savings but nobody has to touch it again. It just happens in the structure. If you were saying, “Oh, 50 years from now, the appropriator has promised to behave,” no, that I would not trust.
Trevor Burrus: Now, you mentioned the tax revolt which is a big part of – first part of your book and in the stats you have here, we don’t have income tax until 1913. The top rate then was seven percent on people who earned $500,000 or more which would be $11.5 million.
Grover Norquist: Yes.
Trevor Burrus: In paid numbers. Only four percent of Americans even paid income tax at all. Now about half of American families pay income tax and the bottom rate is 10 percent, which is higher than the top rate in 1913. Do you think that Americans have become a little bit too – given our anti-tax routes, have we become too complacent about this level of taxation we’re experiencing?
Grover Norquist: Oh, yes, absolutely. But when you remind people of how much they’re paying – we finally defeated the Spanish-American war tax which is a three percent federal excise tax on long distance phone calls.
Trevor Burrus: That story is amazing …
Grover Norquist: Simply by focusing on it. Look at this. This is a hidden tax. They think you’re an idiot. You’re still paying for the Spanish-American – people were then outraged about the tax. They couldn’t have told you they were paying because it was hidden in their phone bill.
So when you highlight the cost of something, people will react and we can get people to change their mind about whether or not they’re willing to tolerate something.
Trevor Burrus: Now you described that Spanish-American War tax. Well, just a funny sentence by itself. Remember the main – remember the tax. We describe it as the perfect tax because it has all these elements to it. It persisted for – it doesn’t want to exist anymore.
Grover Norquist: It’s mostly gone. It’s not completely gone. It’s mostly gone.
Trevor Burrus: But how did it come about, the original? What was the …
Grover Norquist: Sure, 1898 when Spain so violently attacked us and we had to defend ourselves. We needed to …
Trevor Burrus: And take over Guam and the Philippines and Saipan.
Grover Norquist: Served them right. They put it in a tax, a tax on long distance phone calls, charged by time and distance. At the time, a phone was $5000 in today’s dollars. Very few people had phones. Very few people made long distance phone calls and so there’s a tax on the rich people.
So, of all the things politicians do to trick you into agreeing into a tax increase, this nation found it in a tax revolt. It’s only rich people. OK. It’s only temporary because we’re having a war with Spain. It won’t last forever, right? Falling apart as it is.
OK. It’s patriotic. It’s a war. Henry James. The only taxes people like to pay are war taxes. That’s why everything needed to be the moral equivalent of war in order to trick you into having higher taxes. The energy crisis, moral equivalent of war, Jimmy Carter. He had read his Henry James.
So all of this stuff, it was hidden in the bottom of your phone bill. So, all of these things combined to make it really the perfect tax. It lasted more than 100 years. It then became a tax on everybody because 98, 99 percent of Americans have phones and only really rich people can afford not to have a phone.
So we went from a tax on the rich to a tax on average people. [0:40:00] It came out at three percent. We eventually got it mostly killed by focusing on it.
Trevor Burrus: But Clinton at one point did veto …
Grover Norquist: He did. We had it all gone and Clinton vetoed it. It was part of another package of things and Clinton was the keeper of the Spanish-American war tax.
Trevor Burrus: And you also would write about – more about just the relation between war and taxation in general.
Grover Norquist: Yeah, there’s a long chapter. I mean every time they have a war, the war ends and the taxes don’t. The only war that really closed down all the taxes at the end of the war was the War of 1812.
Trevor Burrus: Those were the days.
Grover Norquist: All the others, not only the taxes stayed but the level of spending stayed up more than before the war. Civil War, government was permanently made larger and you saw this again with the First World War and the Second World War. Government kept getting bigger.
Now we used to spend 10 percent of national spending on Pentagon in the 60s and now it’s down to about three, four percent. But government is as big as it was because that money was just absorbed by other parts of the government.
So our friends on the left, they like wars because it means more money for the government and they’re willing to wait to get their piece of it, until after the war ends, which is maybe why they run anti-war campaigns. End the war quickly and keep the taxes.
But they do and there are some of the books that I had looked at researching this. I’m reading these left-brained books and they’re so excited about all the taxes that the war generated. I’m going, “But you are against that war.”
Trevor Burrus: World War One was …
Grover Norquist: World War One and Vietnam. But they love the taxes. They …
Aaron Ross Powell: What’s wrong with seeing a silver lining?
Grover Norquist: That’s right, in other people’s deaths and misery. But yes, war is the health of the state and it is how you grow the government and then it doesn’t snap back. One of the things – the one I can think of at present that George W. Bush did right – was he kept all the spending on Iraq and Afghanistan in a separate overseas contingency thing.
So there’s some urgency built in to pass. The first couple of times it happened, I said, “Wait a minute. Who are you trying to fool? What do you mean there’s an emergency? Who are those guys over there?” You didn’t know. Why don’t you put it in the budget and some smart person said, “Grover, come here. We’re not putting it in the budget because if you put it in the budget, when the war ends, it all goes over into other spending. It gets absorbed,” whereas this way, when it ends, it’s not in the baseline and the first victory we had over Obama was when we faced him off in 2011. We took the trillion dollars he was planning on spending over the next decade as soon as Iraq and Afghanistan ended.
He was putting that all into the baseline to spend on other stuff and that’s what we took away first. That was the easy way of doing it.
Trevor Burrus: This is an important point. A lot of listeners may not understand baseline budgeting and what the sort of ledger domain is when they voice these things on it. So can you explain how that works?
Grover Norquist: Sure. When they say the government spent more or spent less, they mean compared to what. Compared to plans and under Bush, they were spending $100 billion a year on Afghanistan, so a trillion dollars over a decade.
To end the war would mean that that $100 billion every year was now – if you had it at the baseline budget, it’s not part of the budget. But we don’t need it for the wars. So we will – everybody will grab it and take it for other parts. But if it’s not in the baseline budget, if it’s often a separate budget when it ends, nobody gets any more money.
Trevor Burrus: And that’s how you can say though too. So when they say you’re cutting government over time even though it’s still growing but at a lower rate or …
Grover Norquist: It’s cutting from their plans, from their hopes, from their expectations, from their desires that I wanted two ice cream cones. I got one and I was cut.
Trevor Burrus: I was planning on having seven ice cream cones in the future. Now you lowered it to six.
Grover Norquist: That’s right.
Trevor Burrus: So now you’ve been able to cut it.
Grover Norquist: Even though I only have five now.
Trevor Burrus: Yeah. We have no idea how to produce the sixth one, yes.
Aaron Ross Powell: Let me ask a question. Similar lines of the ways of Washington are a mystery to people outside the Beltway. When you say things like …
Aaron Ross Powell: We had this victory. We, being Americans for Tax Reform, this victory against Obama. What does that mean? What are you doing on a day to day basis to achieve these victories?
Trevor Burrus: Yeah, other than wearing your hood and having your secret meetings with your candles and your cackling and all that stuff. That’s an important part …
Aaron Ross Powell: The incantations.
Trevor Burrus: Yes, exactly.
Grover Norquist: We work to build a broad coalition opposing tax increases to start with. It is a guardrail that you can’t get past. It’s totally reasonable because on this side of the guardrail, you can do anything you want. It doesn’t violate the pledge.
But with [0:45:00] the guardrail, we were able to stop Obama’s plans for additional spending and taxes and the republicans held – the republican leadership held and said, “We need 2.5 trillion spending cuts.” Not tax increases, spending cuts, and Obama for the longest time would hear deficit reduction when we were talking about spending reduction and this is so important for conservatives, republicans, libertarians, government people.
They should always focus on spending and never on the deficit because there are two ways to fix the deficits. Spend less. Oh, that’s boring. Washington Post is not interested. Or raise taxes. Oh, that’s endlessly fascinating.
So if the problem is the deficit, the democrats have a solution that is technically every bit as good as the republican solution, which is raise taxes. But if the problem is too much spending, there are only two ways to fix it. Cut spending, which left doesn’t have an interest in, or grow the economy so that the same-sized government becomes a smaller part of it, a smaller problem?
Free market economists, free market advocates have lots of ways to make the economy grow more. The friends on the left have no idea how to make the government grow more. They stick the trail lawyers on it like leeches. They stick the labor unions on it. They tax it. They regulate. They spend it. The thing is just bleeding all over from leeches and doesn’t get healthy. It doesn’t get better. They don’t have any plans to make the government grow faster.
Trevor Burrus: The economy or the government?
Grover Norquist: I’m sorry, the economy, the economy. There are plenty of reasons and arguments for making the government to get bigger, which doesn’t help the economy grow. So I think it’s very, very helpful and important to focus on total government spending as a percentage of the economy.
Grow the economy. That’s good. Reduce the size of government. That’s good. If you focus on the deficit, you don’t get either of those.
Trevor Burrus: Now you have some interesting – there’s a lot of – it’s not just complaints in your book. You have a lot of proposals for actually …
Trevor Burrus: What are the more interesting ones for spending that you mentioned is your idea for the sort of spending BRAC type of thing? Which I’ve actually thought about before. Because sometimes congress, they’re just – they’re like an alcoholic and you got to take with the liquor and you put it on the shelf and knowing a lot of us, don’t even give it to me if I ask type of thing. So what was BRAC and how would that kind of work?
Grover Norquist: BRAC, Base Realignment Enclosure was how we began to reduce the number of unnecessary military basis. Dick Armey and a republican conservative, republican from Texas and a sharp liberal democrat from Indiana together came up with this idea that the Pentagon would come up with the list of bases they didn’t particularly want anymore. There were many and then you would have this bipartisan group that would look at them and choose some of them and then unless congress voted no, that list would be closed down or reorganized. You could move half of the guys somewhere.
This allowed everybody to vote for creating the BRAC, so that it would happen and then when their state or city was going to lose a military base that nobody needed, but they thought it was nice to have the federal money flowing in, they could vote against it but it didn’t get you the two-thirds to defeat it and therefore it happens. So we got to vote …
Grover Norquist: And the right thing happened. You could do that with the number of post offices. There are many more post offices than necessary in the United States.
Trevor Burrus: I mean more than one is more than necessary.
Grover Norquist: Yes. You can take that as far as you want to go. But there are a lot of government programs that you could prune back this way. I think we should do the same thing with federal law. There are 4000 federal laws. They could send you to prison. Do you really need 4000? There used to be 39 I think when they started the country off. I don’t know what all 39 were. I wish I could remember them.
Trevor Burrus: Piracy was one of them.
Grover Norquist: Yes. I certainly can’t remember the 4000. So I think it’s extremely helpful to come up with ideas. You set up a BRAC and then unless congress acts, these things fade.
Trevor Burrus: Also the anti-appropriations committee.
Grover Norquist: I love this because it’s real. There was actually something called the Byrd Committee which was named after Harry Byrd, fiscal conservative sort of out of Virginia and he wanted to fund World War Two by cutting other spending and he set up a committee called the Byrd Committee. I call it the anti-appropriations committee. This group could only recommend cutting the budget. So they write bills and hand it to the house and senate and sometimes they pass them.
That’s how we got rid of the Civilian Conservation Corps. That’s how we got rid of the Work Projects Administration. These things would still be with us. I mean Civilian Conservation Corps over 50, 60, 70 years would have morphed into national service if it hadn’t been shut down to take that money and pay for World War Two.
I am hopeful that we will get this bill restarted up in the next year, that we can pass it the next [0:50:00] two or three years and then people like Jeff Flake of – Alabama and Massie and Justin Amash could fight to get on the committee to un-spend.
Trevor Burrus: That could be a great campaigning thing.
Grover Norquist: Oh, you could have press conferences. You could get attention to yourself. You would have actual deliverables. Here is what I saved you. This is the bill I wrote. We cut this budget in half or in 10 percent. What they did with the Byrd Committee, they cut something in a quarter and a half and then they – then they get rid of it.
Trevor Burrus: Drowned it in the bathtub.
Grover Norquist: Yes, exactly. So I think there are some real opportunities there and the book has a series of couple of dozen solutions to different things.
Aaron Ross Powell: Why the focus exclusively on taxes? I mean government does lots of really awful things to us and restricts the way we can live in all sorts of ways and taking money out of our pockets is part of that, but certainly not all of it.
Grover Norquist: Taking money out of people’s pockets enables the government to do everything else because it has that money. It can also do other stuff. Because it has that control over your life, it can control other things. So I think it’s the pressure point that you start taking away their power. You’re right. When you don’t let them tax and you don’t let them spend, they will regular. But water always tries to find a way around a dam. Power always tries to find a way around restrictions on power and that shouldn’t surprise you. Just go, OK, we’re going to ask – once we stop the tax increases, once we’ve limited spending, we are going to have to deal with judiciary, traditional power and executive orders, that sort of thing.
That’s a problem but it’s one you anticipate and you just got to live with.
Trevor Burrus: So we have two – there are two proposals you talk about in IRS is you bring up the fair tax and flat tax. Fair tax, what is the fair tax? It’s one proposal for kind of …
Grover Norquist: Sure. Fair tax is a retail sales tax, the idea that you rid of the income tax, abolish the 16th Amendment and you have a VAT or a sales tax that is collected not from you, but from the store you buy something. When you buy a hamburger, shirt, sales tax.
Now, both – and the flat tax is you take the present income tax. You have a single rate and you broaden it up. You have your low rates compared to what we have today. Simpler.
I think they’re both an improvement for what we have. They both bring you to taxing consumed income one time at one rate. So an economist would look at the two and say they’re the same darn thing. Why are you asking me to pick between them?
People look at them differently. I won’t have to do the tax. Some business guy will. Since more and more people are going to be self-employed and we’re going to have hundreds of thousands of Uber drivers who pay their own taxes instead of a few thousand taxi cab – unionized taxi cab guys who – the company fills out your tax forms. We’re moving to a world with more independent contractors and fewer employees. So I’m not sure how much it buys you to …
Trevor Burrus: Do you think that will create more of a movement to simplify the tax code possibly because people will be doing their own taxes and the withholding will not be – they’re kind of – if they’re independent contractors, they don’t have withholding and then you write a check …
Grover Norquist: They notice the taxes more, yes. That would have an impact and I think it is having an impact. Uber, Lyft, Airbnb …
Grover Norquist: The number of people and it’s great because the journalist these days have several jobs because one company can’t hire somebody that’s – people have several jobs and they’re independent contractors and once they get it, it’s easier for them to write about it intelligently.
Trevor Burrus: So the tea party seems to have changed things. Would you agree? Do you think it’s a different …
Grover Norquist: Oh, absolutely. This idea where people whine like the tea party completely disappeared. They’re wrong. It went to congress. It changed the world. It changed the direction or the trajectory of the modern republican party. We’re the party that … the republican party was the party that would not raise your taxes. Yeah, they may invade small countries they cannot pronounce but they wouldn’t raise your taxes. That was the good selling point and what won a lot of elections, won the house for them.
But as Bush showed, as Bush – George W. Bush, he never had a focus on limiting spending. It was just never on the list of things to do. You go talk to their guys and when you had an idea to spend less, they sort of look at you blankly. What are you talking about? It wasn’t on their to-do list. I mean they would probably be offended by that but they never brought it up. They never pushed it. It wasn’t what they did.
Every time there was a crisis, they answered – the crisis was more government. So it’s not like they had a bunch of small government plans and whenever there’s a crisis, like [0:55:00] Rahm Emanuel said, oh, here’s my solution written 10 years ago. But this is applicable to this crisis. Let’s have limited government. That is what you should be doing. That is what confident governors do.
But Bush didn’t and so there was a frustration by average people who were otherwise well-disposed towards Bush and the republicans about spending and Obama came in and really went crazy on the spending and people said, “OK, this is it. This is scary.”
I had thought that you could never get the American people to rise up and revolt against spending too much. That they would be – you would have to wait until spending too much turned into a tax increase. Then the pitchforks would come out. They would go crazy.
People in the 70s in California didn’t have a revolution. It wasn’t until all of that spending upward drift turned tax increases on your home. Then people said, “Now, we’ve had it with you.”
Where were we in the last 10 years when this was coming as clear as day? This was coming. We didn’t see it. Because of the speed with which Obama raised spending, the aggressive nature of it, understanding that there was nothing in Washington that could stop them from doing anything because that …
Trevor Burrus: The lack of any votes on republican sides.
Grover Norquist: Yeah.
Trevor Burrus: So just sort of – you know, “Eff ‘em” as Rahm Emanuel said.
Grover Norquist: Yeah. Well, the republican, every republican voted against Obamacare, period, and the D’s could still just pass it. So the people got scared and you had a very strong reaction on spending and so the people got elected in 2010 which was dozens and dozens and dozens of congressmen and senators all came in with ringing in their ears. Stop spending. Stop earmarks. Stop spending. No TARP, no bailouts.
Changes the nature of who you are. When you come into office, you learn what the people want and there are people who 30 years later were voting as if they were set – the Great Depression was still on in the 60s from the 30s and those guys coming in are going to be focused on spending as long as they stay in Washington DC.
So the tea party changed the direction of the modern republican party. Not just the party that won’t raise your taxes but the party that fights spending and that’s a big deal.
Trevor Burrus: So is tax reform urgent? I guess the last question would be, “Are you optimistic?”
Grover Norquist: I’m optimistic long term. Nothing terribly interesting happens until Obama moves on because he will veto anything too good, although he just signed a $3 trillion net present value cut in spending. So I’m open to possible deals. He’s supporting a trade agreement which he would never have done in the first six years of his presidency.
So there may be some opportunities that pop up. We should just be ready and so there are people planning tax reform packages and Casey wakes up one morning and says, “I need a legacy. Let’s do lower marginal tax rates.” I’m not counting on it. I don’t think that’s the way to bet. But why not be ready?
Trevor Burrus: But overall in the longer term …
Grover Norquist: Oh, sure.
Trevor Burrus: You’re optimistic?
Grover Norquist: Yeah, yeah, yeah. At least we’re going in the right direction. We finally have federalism working in a way that’s going to help drive the country in the right direction as people leave – are leaving high tax states and – spending states and moving to low tax states. The Electoral College is collapsing into the red states.
Trevor Burrus: Thank you for listening. If you have any questions, you can find us on Twitter at FreeThoughtsPod. Free Thoughts is produced by Evan Banks and Mark McDaniel. To learn more, find us on the web at www.Libertarianism.org.