Tax Analysts Blog

Heretic! Apostate! "So-Called" VAT Lover!

Posted on Oct 22, 2010

Pity the lost soul of Mitch Daniels. Long a paragon of virtue and morality, he has strayed from the True Faith. In a recent speech to conservative bigwigs, Daniels suggested that a value-added tax, coupled with a flat-rate income tax, might be a reasonable basis for tax reform. For this unpardonable sin, he has been justly pilloried by the leader of the Congregation for the Enforcement of the Conservative Dogma, a.k.a. Grover Norquist:

    “This is outside the bounds of acceptable modern Republican thought, and it is only the zone of extremely left-wing Democrats who publicly talk about those things because all Democrats pretending to be moderates wouldn’t touch it with a 10-foot poll. Absent some explanation, such as large quantities of crystal meth, this is disqualifying. This is beyond the pale.”

To be sure, Daniels has found support from a few lonely conservatives -- none of them recognized as such by movement leaders. Bruce Bartlett, for instance, notes the quasi-theological tone of the Daniels denunciation:
    The hysterical response to Gov. Daniels — who has been mentioned as a possible presidential candidate in 2010 — is more about imposing orthodoxy on members of the Republican church lest they be tempted to actually do something meaningful to reduce the budget deficit they all claim to abhor, or accept that simply cutting taxes isn’t the only thing that will improve the tax system or reduce the size of government. Sadly, it will probably work. The cost of heresy is too high.

The Atlantic's Andrew Sullivan makes a similar point, taking special aim at Norquist's comments:
    "Notice the formulation: that there are "boundaries of acceptable modern Republican thought." Yes, this is a church or a party? And Norquist may not be the Pope (that would be Limbaugh) but he is in the college of cardinals...

Of course, Daniels is a cardinal, too (at least by any reasonable measure). But that just makes his apostasy all the more damning.

The sad fact is, there is simply no one immune to charges of heresy in the modern GOP. Right wing political correctness is vastly more rigid than the left wing version (which is plenty rigid itself). And nowhere is right-wing group-think more pervasive than around the subject of taxes. There is no one left among Republicans who can talk sensibly about revenues -- even the good guys have been cowed into silence (or forced into signing Norquist's tax pledge, a confession of the tax-cutting faith).

In a fine article for Commentary, Peter Wehner makes the same point:
    Norquist has been an influential figure in the conservative movement for a generation, but his response to Governor Daniels is almost laughably self-important. He acts as if he were speaking ex cathedra. There is an imperiousness and intolerance to Norquist’s words, an effort to shut down debate rather than to engage it. This approach shouldn’t be used in any case — but to employ it against arguably the nation’s most successful governor is very unwise ...

    Norquist’s words reveal a cast of mind that conservatism would be better to avoid. It is the kind of attitude that has come to define many modern universities, which are among the most illiberal and intellectually rigid and stifling institutions in America. A healthy, self-confident conservative movement doesn’t declare what Daniels said to be “outside the bounds of acceptable modern Republican thought”; rather, it allows for and even encourages genuine debate and creative thinking, the probing of ideas and holding them up to scrutiny, self-examination, and self-reflection. Let’s leave it to others to employ the tactics found in a George Orwell novel.

By the way, while we're on the subject of VAT lunacy, let me nominate this article from Politico for a special Pulitzer in the category of "Most Specious Logical Connection in a News Story."
    The so-called VAT, common in European economies which have stagnated, is a toxic acronym to fiscally conservative activists like Grover Norquist and Dick Armey.

Let's set aside the "so-called" descriptor: The tax in question is certainly a "so-called" VAT in the same way that Politico is a "so-called" website.

Instead, let's focus on the implication that VATs are responsible for European economic stagnation. If we buy that connection, how about adding this one for good measure (and ideological balance)?
    Preferential tax rates for capital income -- common in countries around the world where economies have stagnated, including the United States -- are deeply unpopular with fiscally progressive activists like Robert McIntyre and Dean Baker.
Just a thought...

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