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Archive for Wednesday, June 18, 2003

Op-ed throws down gauntlet on taxes

June 18, 2003

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— Without intending to, Grover Norquist has done the Democrats a huge favor. The president of Americans for Tax Reform and influential presiding officer at a famous weekly strategy session of conservative organizations honored The Washington Post last week with an op-ed article modestly headlined "Step-by-Step Tax Reform."

In it, Norquist, who is most noted for pressing candidates at all levels to sign a pledge that they will never raise taxes, hailed the Bush administration for pushing through a fresh tax cut in each of the three years it has been in office.

It will continue to do so, he said, because this president -- unlike Ronald Reagan and the elder George Bush -- can operate with confidence that Republican control of Washington will provide him eight years to pursue his economic agenda.

"This," Norquist explained, "is because the 2002 redistricting gave Republicans a lock on the House of Representatives until 2012 and the Founding Fathers gerrymandered the Senate for Republican control. In the 50-50 election that was 2000, Bush carried 30 states and Al Gore 20. Over time, a reasonably competent Republican Party will tend to (elect) 60 Republicans in the Senate. This guarantee of united Republican government has allowed the Bush administration to work and think long-term."

Norquist is, of course, assuming Bush will win re-election next year, and nothing in politics is quite as certain as he may think. But this is a plausible scenario, and his description of what Republicans will do with the opportunity is one that commands attention.

He foresees Bush signing into law measures to abolish both the estate tax (or "death tax," as he calls it) and the capital gains tax. He also expects to see a statute that will make all savings accounts tax free. This is hardly speculative. Bush already has seen Congress pass a phaseout of estate taxes and a reduction in capital gains levies. The tax-free savings idea was floated by the Treasury last winter, but temporarily set aside. With an increase in corporate deductions for capital investments and an end to the alternative minimum tax -- designed to catch those individuals who would otherwise shelter all their income -- Norquist says the Bush era will eventually produce the conservatives' dream of a flat-rate income tax. When janitors and CEOs have to give up the same share of their paychecks to Uncle Sam, Norquist foresees virtually all voters uniting in a continuing demand for ever-lower rates -- and no longer will Democrats be able to advocate tax hikes that target only the top brackets.

The consequence of this -- not spelled out in his essay but clearly in his mind -- is a massive rollback in federal revenues and what he regards as a desirable shrinkage of federal services and benefits. In short, the goal is a system of government wiped clean, on both the revenue and spending side, of almost a full century's accumulation of social programs designed to provide a safety net beneath the private economy.

When I asked Norquist what had prompted this exercise in candor, he said that when the Post's editorial page invited him to explain the Bush tax strategy, he saw it as an opportunity to show his fellow conservatives that "We don't have to try to operate under the radar screen. We can be very open about our agenda."

And the White House reaction? "They didn't ask me to do it, but they certainly didn't complain about what I did. I have exchanged several e-mails with Karl Rove since then, and it's never come up," he said.

I told Norquist that his op-ed had been the subject of many questions and comments -- both favorable and critical -- from people in an online chat I'd done for washingtonpost.com, and that several Democratic operatives had discussed it in phone interviews. Did you think you were tipping off the opposition? I asked.

"No," he said, "I think the smart guys on the left have known for a long time they are in trouble -- and that we are going to dig out their whole structure of programs and power."

For once, Norquist may have underestimated himself. The amount of talk his essay has engendered makes it clear it was as much an alarm bell to the Democrats as a rallying cry for the Republicans.

A wide variety of Democratic groups are gearing up for what they describe as "long-term strategies" for their party's comeback. Norquist clearly has told them that the Republicans already are well-advanced on such a plan.

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