Welcome to a new feature of Carolina Journal Online, the Friday Interview. Carolina Journal Radio’s Donna Martinez recently discussed some important issues with Grover Norquist, president of the Washington D.C.-based organization, Americans for Tax Reform. The interview aired on Carolina Journal Radio (click here to find the station near you).
Martinez: Your group, Americans for Tax Reform, endorses something called the Taxpayer Protection Pledge. What is that, and have any North Carolina legislators signed on?
Norquist: Certainly. We ask all candidates for office, federal and state, to sign a pledge that they will oppose any effort to raise taxes. Two hundred twenty-two members of the U.S. House of Representatives have signed the pledged. All the Republicans have signed the pledge, 46 U.S. senators have signed the pledge, both senators from North Carolina have signed the pledge, and of course President Bush has made that commitment as well. At the state legislative level, about 15 senators and maybe 30 representatives have signed the pledge. Some of them have not kept it, unfortunately, and along with [State Rep. and former cospeaker] Richard Morgan and some others, people have made that commitment, switched on it, and voted for higher taxes.
Martinez: The North Carolina General Assembly is negotiating our state budget, and among the possibilities are a variety of tax increases — some possible extensions of tax increases that took place several years ago. One is on high-income earners, the other on purchases, the sales tax. Where does North Carolina stand relative to other states in terms of our tax burden?
Norquist: Well, there’s good news and bad news. The good news is that the overall tax burden in North Carolina is lower than most other states. The bad news is that the trend is the opposite way.
Martinez: Why is that?
Norquist: Because your governor and your state legislature have been taxing like crazy the last few years — 2001, 2002. Only two states raised taxes more dramatically than North Carolina.
Martinez: Only two?
Norquist: That was New Jersey and California. And you’ll remember that in California they recalled the governor as a result of that behavior. So, really, the state was almost all by itself in how dramatic its taxes were increased. If you look at 2002 until 2005, only seven states raised taxes more dramatically than North Carolina, so there’s a real challenge: a traditionally overall low tax state moving rapidly towards higher taxes. Add to that, that North Carolina has only partially learned the lesson of Ronald Reagan’s economics. It has, up until recently, had an overall low tax burden, but it has high marginal tax rates, which is exactly what Ronald Reagan taught us you ought not to do. At over 8 percent personal income tax rate for high earners in North Carolina, the state would actually earn more revenue at a lower rate, which is what happened at the federal level.
Martinez: Why do people not seem to understand that when you lower rates, you end up increasing revenue to the treasury?
Norquist: Well, some liberals just like high marginal tax rates because they want to tax people for working too hard and being too successful. The other challenge that you bring up is that that there are two lies politicians tell. They promise not to raise your taxes and then they do, and the other lie is, “This tax is temporary.” In Ohio, every tax that was introduced in the last 40 years was introduced as a temporary tax, and none of them were temporary. At some point, you really should work to defeat elected officials who bring in any temporary tax knowing perfectly well that they’re lying to get it in, that they intend to make it permanent. Once they get the temporary tax in, they then spend like crazy and say, “Oh, we’d love to help you undo our temporary tax, but now we can’t because we have spent too much.” And that’s very annoying. And it really is treating taxpayers with contempt and showing great disrespect. So an elected official who tells you he’s going to vote for a temporary tax increase should be pushed into traffic.
Martinez: Rhetorically speaking.
Norquist: Yes, yes, if you insist.
Martinez: Let’s talk about Ronald Reagan. He was key to the conservative movement, introducing a new generation of people to conservatism. I understand that you started Americans for Tax Reform at his behest.
Norquist: He was looking to reduce marginal tax rates from a top rate of 50 percent and they ultimately came down to a top rate of 28 percent in what was the Tax Reform Act of 1986, and we successfully worked with outside groups to get that done. The White House asked me to be the president of Americans for Tax Reform, which was put together for this purpose, and I did. And in that campaign we created the No Tax Increase Pledge, and that gave us a reason to keep Americans for Tax Reform going, not just for the duration of this one fight, but recognizing that that was a necessary part of the Reagan vision indefinitely into the future.
Martinez: Do you believe conservatism is continuing to grow?
Norquist: The vision of Ronald Reagan is certainly stronger today and held by more people than when Reagan was elected. He was elected with about 51 percent of the vote the first time out. His assertions that we now consider commonplace were at the time viewed as radical, that welfare needed to be reformed. He put that before the governors and was voted down 49 to 1. Now, of course, we’ve reformed welfare as he wanted to — 26 years after he put the idea forward — and we’ve dropped in half the number of people locked into welfare dependency. His assertion that the Soviet Union was evil was considered an outrageous thing to say at the time, and now everybody knows it’s true.
Martinez: Let’s talk about the mindset that we see in American society today, that somehow government should be in charge of our lives, should play a major role in our lives, essentially to be our parents. People seem to really want the security that they think they’re going to find in, for example, defined benefits or services from the government. How does someone acquire that mindset?
Norquist: Well, for those people who’ve lived in a situation like that for a long time, you simply get used to it. People who are over 70 years old grew up during a period of overwhelming government dominance: World War II, the Great Depression, the labor laws, the draft, one-size-fits-all pensions. So there’s an older-age cohort in America that can’t imagine anything else. There are younger Americans who, because they have computers, because they have email, because the average person who’s 35 has had 10 jobs, sees a much more fluid and flexible world and is willing to be in that world.