One part of the ongoing budget farce in Washington has been a lot of dancing around the idea that maybe Republicans would agree to a plan that raises tax revenue without raising tax rates. Frustratingly, reporters have spent a lot of time querying Republican Party elected officials about this (they give cagey answers) rather than asking the person who really matters: Grover Norquist.
The text of the no-taxes pledge that he gets all Republicans to sign is terse and like all good elements of holy writ could be interpreted in different ways. But the Pope of the supply-side cult himself has weighed in and says this doesn’t work for him:
“If you raise taxes, it’s a problem with the pledge,” Norquist says in an interview. “Romney’s plan was always revenue neutral – I’m in favor of getting rid of deductions and credits and reducing rates, as long as it’s revenue neutral. That’s always been the Republican position.”
No tax reform.
This is why in practice things get a lot simpler if you just go “over the cliff.” With the new baseline in place, basically everything the White House has proposed counts as a tax cut rather than a tax increase. That doesn’t mean Republicans would just say yes to anything Obama put on the table. But it does mean that they at least could say yes. You can do tax reform, you can do a big bargain, you can do whatever. But you need to change the baseline first. It’s not logical for so much to hinge on the baseline rather than the policy outcome, but that’s how religion works. Its mysteries can only be truly understood by those who have faith. To those of us looking in from the outside it all seems arbitrary. But the details matter.