Grover Norquist speaking at CPAC 2011 in Washington, DC. Courtesy: Gage Skidmore
“Americans for Tax Reform is a wonderful-sounding name.… As far as I’m concerned, it’s a front organization for Grover Norquist’s lobbying activities.” —Former Senator Warren Rudman (R-NH)
Rather than acting as a principled taxpayer or anti-tax “activist,” as he’s referred to in the media, Grover Norquist has often used his nonprofit to further the interests of his financial backers.
Last week, we showed how two billionaire-backed nonprofits provide over two-thirds of funds to Norquist’s foundation, Americans for Tax Reform.
But that other third is important in understanding Norquist’s priorities on Capitol Hill.
One aspect of the pledge is the promise not to raise rates; the other is to not cut tax credits (unless balanced with more rate cuts). In practice, the second part of the pledge is simply a promise to sustain any corporate tax subsidy under the sun.
Although Norquist talks like other conservatives about opposing government waste, tax credits are economically equivalent to subsidies. The only difference between a multimillion-dollar targeted tax credit for an oil refinery in Rosemont, Minnesota, and a Department of Energy grant to the same refinery is the agency that administers the money. Yet in Norquist’s world, regardless of the policy merits, every targeted tax credit is like a “tax cut” that must be protected.
Here’s an example of how this works. Take General Electric, which faced withering, bipartisan criticism last year when it was revealed that the company, thanks to a myriad of tax credits and other tax subsidies, had paid no federal income taxes in 2010. Norquist was there to defend the company in a chat with The Washington Post, arguing absurdly that removing billions in tax rebates to GE would just be a tax on consumers. Cutting GE’s tax credits, after all, would break the Norquist pledge.
In a recently posted 2011 giving report, General Electric says it made a contribution of $50,000 to Norquist’s foundation that year.
Consider that—GE gave more to Norquist in 2011 than it paid the IRS for income taxes in 2010, a year the corporation made $14.2 billion in profits.