Low-tax crusader and Republican strategist Grover Norquist tells Newsmax that letting the Bush tax cuts expire in January 2011 would amount to a $1 trillion tax increase — the largest boost in American history.
Norquist — president of Americans for Tax Reform — also warns that President Barack Obama and the Democrats are intent on pursuing the “very bad idea” of imposing a European-style value-added tax.
And he says the tea party movement arose when millions of Americans became “scared straight” by huge increases in federal spending and debt.
Americans for Tax Reform is a coalition of taxpayer groups, individuals, and businesses opposed to higher taxes at the federal, state, and local levels.
In an exclusive Newsmax interview, Norquist — who is also on the board of the American Conservative Union and a regular Newsmax contributor — was asked if Obama had reneged on his promise not to raise taxes on couples earning less than $250,000 a year.
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“Yes — 16 days into his presidency he signed a bill that raised taxes on tobacco,” he says.
“The first tax increase he signed hit Americans of all income levels.”
Allowing the Bush tax cuts to expire at the end of this year, as the Democrats plan, will in fact result in “about a trillion-dollar tax increase on the American people over the next decade,” Norquist says.
“It would be the largest tax increase in American history, and it would take every marginal tax rate and increase it. The taxes on businesses, on capital gains, would be very high.
“When these tax cuts went into effect in 2003, the economy and the stock market strengthened. As soon as people realized that those tax increases were going to come in in January of 2011, the stock market began its decline.”
Asked about proposals for a national sales tax known as a value-added tax, or VAT, Norquist tells Newsmax:
“A VAT is a very bad idea. It is true that it is what the Democrats plan to do. It is Obama’s goal.
“Obama and the Democrats have been moving the United States toward the European social welfare model. That has a VAT, on average in Europe, of 20 percent.
“If we were to adopt a value-added tax as Europe has, your salary would be worth 20 percent less because you could buy less with it. Your life savings would be worth 20 percent less. Your pension would be worth 20 percent less, because anything you bought would have a 20 percent value-added tax attached to it.
“It would be very bad for the American economy.”
The Democrats’ healthcare reform bill includes a mandate to purchase health insurance and severe penalties for noncompliance.
“It’s going to cost hundreds and eventually thousands of dollars a year,” Norquist declares.
“It is designed to force you to buy health insurance, but it is a tax. It will largely be put on low-income people since higher-income Americans already have health insurance.”
Norquist is also highly critical of the Democrats’ cap-and-trade plan to curb carbon emissions.
“There are a number of different versions of it, but all of them have the same thesis: They are taxing the energy that you and I use and subsidizing, giving corporate welfare, to industries that don’t yet exist or don’t produce energy at real prices,” he says.
“So it’s a massive tax increase on the energy you use generated by coal or natural gas or oil, electricity, and subsidies for expensive energy [wind, solar, etc.). Your energy costs will go up because of these taxes by thousands of dollars a year.
“It is not the unfortunate side effect of Obama’s policy. The goal of his policy is to make most energy, coal-generated energy, too expensive, so for similarly high prices you will use solar or wind energy — which you don’t use now because it’s too expensive.”
Asked for his view of the tea party movement, Norquist says: “The tea party movement is best understood as millions of Americans who have not been involved in politics for most of their adults lives but in the last two years got scared straight by Obama’s debt — trillions in higher taxes, higher debt, higher spending, and trillions more being threatened.
“And because they’re involved in politics, if the Republicans come back into power they will be a different party than they were in the past, because there are these new troops that have arrived with one thing on their mind — spend less.”
Norquist favors a plan to cut spending by setting up a congressional committee with subpoena powers to examine spending, with an eye toward reducing unnecessary federal expenditures. The plan is “getting good traction around the country,” he says, but the Democratic leadership opposes it.
He also says he would welcome a presidential campaign by former House Speaker Newt Gingrich, who is considering a run.
“Speaker Gingrich fought for lower taxes at all levels. The other thing Gingrich does is he’s a movement builder, a party builder, and so whether he’s a back-bencher, speaker of the House, or candidate for president, his goal has always been to advance liberty. I think it’s very helpful, very Reaganesque.”