Tax Analysts Blog

Grover is Right: "Tax Reform" is Really a Tax Hike

Posted on Mar 14, 2011

On Fox New Sunday Senator Saxby Chambliss, R-Georgia, did a lot of double talk. He explained to interviewer Chris Wallace that he was against tax hikes but was also simultaneously looking at "revenue and reform of our complicated tax code in a major way" to reduce the deficit: You judge for yourself (full video here):

    WALLACE: The key to your plan, you say, that everybody has got to have some skin in the game. For you as a Republican, Senator Chambliss, that means agreeing to the politically unpalatable increases in revenue. Are you willing to increase taxes?

    CHAMBLISS: Well, we can increase revenues without increasing taxes, per se, Chris. And as a matter of fact, that our proposal does is to reduce the effective and direct tax rates all the way across the board. And we do that by making a significant reform in the tax code. And every time, we've made a significant reform in the tax code, whether it was under Reagan in '86 or Bush in 2001, what we've seen is reduction in rates and increase in revenue.

    WALLACE: What you're basically talking about is doing away with about $1 trillion in deductions that are currently in the tax system. But Grover Norquist, head of the conservative group Americans for Tax Reform, says what you're talking about means that you're still breaking your pledge -- and he's obviously going to hold this against all Republicans who support it -- breaking your pledge not to raise taxes.

    CHAMBLISS: Well, let me just say we're joined on my side in these discussions by Senator Tom Coburn of Oklahoma, Senator Mike Crapo of Idaho who just been designated by "National Journal" as three of the most, if not the most conservative members of the United States Senate. We don't believe in raising taxes. . . .But if you look at the debt commission report, you have to address spending. We have to reduce spending in a major way. You've got to address entitlements. We've got to reform entitlements in a major way. And you've got to look at revenue and reform our complicated tax code in a major way. And when you do that, everybody does have that skin in the game and everybody gets their score just a little bit.

Chambliss a one of a bipartisan six-member group of senators looking at a long-term deficit reduction plan using the Bowles-Simpson commission plan as its starting point. Bowles-Simpson would eliminate lots of loopholes. The revenue gained from loophole closing would be used to lower rates (that's tax reform) AND to raise revenue (that's deficit reduction).

Like so many other politicians Chambliss is trying to camouflage tax hikes in the complexity and confusion of big tax reform package. Given the deficits we are facing that will require annual deficit reduction equal to many multiples of $60-plus billion House Republicans are talking about, any serious discussion of deficit reduction must include tax hikes. AND given our loophole-ridden anti-competitive tax code, the way to do that is to cut special interest tax breaks. It would be nice some politicians would show some leadership and start educating the public about the facts instead of dodging the issue: we need to raise taxes.

As the price of support of his organization, Americans for Tax Reform, Grover Norquist requires candidates to take his no-tax pledge. Norquist hears all the talk about tax reform and deficit reduction and rightly calls it what it is: a veiled effort at a tax hike. To Norquist this is the end of the world. To anybody concerned about the deficit it is a logical first step. Legislators who signed no-tax pledges will find it hard to square with the need to bring the deficit under control which in a kowtowing letter to Norquist Chambliss equates with defending "the Constitution of the United States against all enemies, foreign and domestic, of which our national debt may now be the greatest."

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