A message from America

 

On Wednesday night I heard a lecture by Grover Norquist, the Head of the Americans for Tax Reform, who is in London.

I used to talk to Grover when he was working for Speaker Gingrich on visits to Washington. He has been the leading light behind the campaigns for lower taxes and smaller government in the USA.

He told us that the 25 Republican states are cutting public spending at the state level in the USA, and setting lower state taxes. As a result there is migration from some of the 12 Democrat states like California into the lower tax Republican areas, as the enterprising and successful seek more favourable tax terms for their businesses and savings. I have remarked before on how the US deficit has fallen further than the UK’s thanks to states level spending reductions, now allied to Federal level cuts as well. Apparently the lower taxes that some Republican states have introduced are also acting as a good stimulus to growth and greater prosperity.

He also told us of the success of schemes to offer parents proper school choice by empowering them to spend the money for their child’s education themselves, allowing parents from low income backgrounds to have the kind of power and choice only enjoyed by the richest in the UK when they opt out of the state system.

Grover calls his coalition the “Leave us alone coalition”. He works with all sorts of groups who want the government to do less in their areas, or who seek greater freedom. He calls the Democrat coalition the “Taking Coalition”, groups of people who seek money from the state or especially those who earn a good living out of distributing or spending state money. His language would be thought a bit sharp this side of the Atlantic, but his passion for lower taxes and his ability to demonstrate their benign effects on all went down well with his large audience in Church House.

48 Comments

  1. margaret brandreth-j
    July 6, 2013

    The State , including the welfare state, is a safety net for those who do truly need some help. There are those organisations who abuse the powers of the state, yet they can be brought to justice more quickly than the independent few orchestrating legal proceedings against larger private concerns. The US has a reputation for the abuse of welfare rights and the constant manoeuvring of the law as far as litigation is concerned . Rue the day that we ever get into that arena.

  2. wab
    July 6, 2013

    Mr Redwood is very gullible. Grover Norquist is no doubt a smooth talker (these types always are) but he and his ilk have caused much damage to America, in particular making the Republican Party so dysfunctional that no sensible public policy debate can take place in the US. (Unlike in the UK, where at least the right wing types have to make some kind of argument to justify their stance.) Norquist is part of the “Up yours Coalition”. You know, there is no such thing as society, and all that.

    California is one of those “high tax” states that the tax jihadists like to complain about. But California has a far more successful economy (ditto New York and Massachusetts) than most of the banana republic (and Republican) states that Norquist sings the praise over. The one successful “low tax” state (successful in terms of its economy, not successful in most other regards) is Texas, and that is not because of the brilliance of the low tax policy so much as the fact that it is rolling in oil. But hey, why let reality get in the way of crude right wing propaganda.

    As for “the success of schemes to offer parents proper school choice by empowering them to spend the money for their childā€™s education themselves”, this is a joke. Perhaps Norquist is thinking of Louisiana, where the Republican governor is happy to throw public money at fundamentalist Christian schools which teach that the world was created a few thousand years ago, and with no accountability for the money that they do receive.

    1. Acorn
      July 6, 2013

      Which bunch of neo-cons invited him to speak in London, surely not those in the Cabinet?

      The Grover Norquist pledge reads as follows. “I, ______, pledge to the taxpayers of the state of ________, and to the American people that I will:
      ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and
      TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

      Unfortunately, a lot of Republicans are backing off the pledge. As the GOP grapples with the new post-election reality of budget negotiations, Republicans have started to distance themselves from Americans For Tax Reform founder Grover Norquist, the anti-tax crusader behind the GOP’s “No New Taxes” pledge. Several top Republicans abruptly abandoned Norquist this week, declaring themselves unbeholden to his pledge, which forbids signers from raising any type of revenue, [including closing loopholes used by the likes of Starbucks etc.. ].

  3. alan jutson
    July 6, 2013

    ….”his language would be thought to be a bit sharp this side of the atlantic”….

    That has been exactly the problem here, no one has been speaking in real anglo saxon terms, every one who has been worried about the situation here has been pussyfooting about, fightened it almost seems to rock the boat a bit.

    Aware that you have constantly put out facts and figures for years John, but on occassion sometimes people need to be shocked with some real straight talking, before they understand and realise that real action needs to be taken.

    let us hope that at last people are begining to see the light !

  4. lifelogic
    July 6, 2013

    You say “His language would be thought a bit sharp this side of the Atlantic” perhaps because we have the BBC dripping lefty big state dependency on the nation at every opportunity.

    The BBC had the most absurd interview with Grover Norquist the other day, the interviewer seemed to think we needed such a big state so that we did not have Victorian factory conditions any more! Why are BBC staff so dim? “Guardian think” second rate art graduates with a chip on their shoulders almost to a person. Every single one wanting an every bigger state, ever more enforced equality, ever more regulation, every higher taxes, the expensive energy & AGW religion nonsense, ever more EU in short state sector think.

    Can no one at the BBC actually think for themselves?

    We are richer and more comfortable due to technology improvements & efficiencies not due to the every larger dead hand of the state sector. Get a sensible BBC and we develop a sensible political debate and government. One where Cameron types would clearly be at the middle/left of the Labour party not leading the Tories.

    1. Denis Cooper
      July 6, 2013

      And the Labour MP Ian Davidson, while ambivalent about the EU, thinks that one advantage is that it stops Tories sending small boys up chimneys.

      His speech yesterday was absolutely hilarious and well worth reading, and not just for that, or even for his description of the Liberal Democrats as “snivelling”, which led to the only Liberal Democrat MP present in the chamber tearing up his Unite membership card.

      It starts at Column 1202 here:

      http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm130705/debtext/130705-0001.htm

      “The final point I want to make is that the Conservative drive for renegotiation seems to be driven by the sort of impulse that means every time Conservatives walk by a house and see a chimney, they regret that a small boy is not climbing up it. I think the Conservative partyā€™s wish to repatriate powers over labour relations and working conditions is driven by a desire to drive down terms and conditions to the level of the 18th or 17th or 16th century, if they think they can get away with it. There is no future for Britain in the long term if we go back to having small boys climb chimneys. It is rules and regulations – and, indeed, red tape – that stop us having small boys climbing chimneys.”

      Incidentally it also worth reading what Sir Richard Shepherd had said just before Ian Davidson started his speech, about how Major blocked his attempt to use a private Member’s Bill to get a referendum on the Maastricht Treaty and repeating part of what the Labour MP Peter Shore had said about it:

      “… only this generation of British parliamentary representatives has contemplated handing to others the great prizes of national independence, self-government and the rule of law under our own elected representatives. It would not have occurred to a previous generation to hand to others that which we prize most greatly and have given to other countries throughout the world in the past 50 years … “

      1. lifelogic
        July 6, 2013

        Indeed all the parties have behaved appallingly. Major & Cameron perhaps the worst of all.

      2. lifelogic
        July 6, 2013

        I am sure we have rather more efficient methods for cleaning chimneys than children now, if indeed many still need cleaning. Most children nowadays seems unable to mow the lawn, unblock the drain or put up a shelf. Still I am sure Gove & Boris will soon have them all fluent in Ancient Latin & Greek and the History of the Roman empire which will be some consolation.

      3. Bazman
        July 6, 2013

        Creating competition between the desperate is a fact for many on the Tory right and you think this is hilarious as it is so far from the truth? Really? Many would like to see equal pay and rights for woman such as pregnancy pay removed as well as minimum wage, benefits, unemployment benefits, free healthcare and legal protection for the population in the form of consumer rights and employment laws such as safety. Children up chimneys is not to far away for them, if as he says, they could get away with it. renegotiation and red tape do mean cutting back on the pay, benefits and working conditions for millions in reality of course to ‘help’ them. Get real.

        Reply Conservatives support the equal pay legislation and maternity pay/leave.

        1. Denis Cooper
          July 7, 2013

          I said that Ian Davidson’s speech was absolutely hilarious; and so it was, it had MPs of all parties almost rolling in the aisles. Apart that is from the solitary LibDem, who took umbrage.

        2. lifelogic
          July 7, 2013

          To reply – The Tories under socialist Cameron/Major clearly would support these daft laws, but they hinder employers, destroy jobs, are blatantly discriminatory against men and people with no children and do not even help mothers (as many employers just avoid woman of that age or just put them on zero hours or short term contracts and there is therefore less competition for their labour. More government handicapping as usual.

        3. Edward2
          July 7, 2013

          Baz
          Tell us names of those “many” MP’s who have called for these welfare changes that you claim or stop making up this defamatory nonsense.
          You end hilariously with a demand that everyone other than you needs to “get real”!

          1. uanime5
            July 7, 2013

            What about all the MPs who keep complaining that certain employment law are preventing businesses from operating in the most profitable way?

          2. Edward2
            July 7, 2013

            Uni,
            Who are “all these MP’s who keep complaining…?
            Another unfair slur on any Conservatives who simply want to make it easier to employ extra staff without entering a legal minefield.

          3. Bazman
            July 8, 2013

            Dominic Raab will do for a kick off. He thinks current employment law offers “excessive protections” to workers. Like what Dom? Members of a new Conservative parliamentary faction called the Free Enterprise Group, that argues for exempting small businesses from paying the minimum wage for under-21s, the already less-than-lavish hourly sum of between Ā£3.68 and Ā£4.98.and any other Tory MP that supports the Beecroft Report. If all these changes were made they would of course not be enough and small children and labour would not be to far away in their world. Not however for their own children and their own work as they are ‘special’ and need special schools and lives to bring out the best in them to ‘help’ the rest of us. Ram it.

          4. Edward 2
            July 9, 2013

            So Baz all you can come up with is one MP and a small group who call for the min wage to be changed for under 21’s
            Your original slur said all Tories want to destroy the whole welfare state
            And you have the nerve to call others fantasists

          5. Bazman
            July 10, 2013

            43 Mp’s a Small group? Don’t try that one. I never said all Tory Mp’s either. Who is the fantasist again?
            Oh it’s the anti clean energy guys who think we can live with mass pollution.

          6. Edward2
            July 11, 2013

            Your actual words Baz when talking about the Tory right:-
            “Many would like to see equal pay and rights for woman such as pregnancy pay removed as well as minimum wage, benefits, unemployment benefits, free healthcare and legal protection for the population in the form of consumer rights and employment laws such as safety. Children up chimneys is not to far away for them”
            And when challenged you come up with one MP (who has never said the things above you have falsely attributed to him) and a group of MP’s who said they would like to see some easing of employment laws.
            Stop making it up. It borders on defamation.

          7. Bazman
            July 12, 2013

            Collectivity this is a government that has made the helped the poor by making them wait for dole longer, attacked disability benefits gave them the bedroom charge and a number of other bills designed to save money, but all evidence pointing to these measures costing more than what they save so what does this tell us about Tory MP’s view on the lowest in society? They are on their side? The next steps will be an erosion of all other benefits including safety, child labour laws and womans rights. You do not thinks so? Why so? Other vulnerable groups have been hit and the rich have been given more. Silly boy.

    2. Bazman
      July 6, 2013

      This is the actual interview he is ranting about. Norquist is questioned and often struggles to answer. ligdic world presumably like a fawning interview by Fox News to be have been had. (personal abuse deleted ed)http://www.bbc.co.uk/iplayer/episode/b01nmzmf/HARDtalk_Grover_Norquist/
      You be da judge and see how ligic thinks too.

      1. lifelogic
        July 6, 2013

        Actually it was the radio 4 today interview I referred to.

        1. Bazman
          July 6, 2013

          lucky 4 u.

      2. lifelogic
        July 6, 2013

        I have now watched Hard Talk one Norquist was right in every respect and the interviewer typically BBC/Guardian/Polly Toynbee think and rather lacking any sensible questions to ask.

        Where does the BBC find so many daft, lefty, pro EU, pro big government, quack green, rather dim, art graduates? Adverts in the Guardian one assumes.

        1. Bazman
          July 7, 2013

          He questioned him on comments made by right wing conservatives and newspapers. Is this why he is daft and lefty without sensible questions? There was nothing art graduate lefty green wash about it. The fact that he dared to question right wing views is why you are coming out with this tosh. You see a world that is not there. A fantasist no less.

    3. Jerry
      July 6, 2013

      @Lifelogic: You really do have difficulty with understanding the job of an unbiased journalist, it is not that of the old school BBC (which you would no doubt approve) were the BBC reporter merely says to the interviewee “Is there anything you would like to say to the BBC audience Sir/Madam?” and then allow the person an open microphone for how ever long they wish, without one further question nor interruption. Even FoxNews doesn’t give their right-wing (republican) guests such privileges!…

      Also, as Bazam points out, the programme you are talking about is meant to take the direct opposite (Devils Advocate) stance, hence why it is called Hard Talk – unless the guest is totally naive they should expect such a style of questioning, which again says nothing about the interviewers own opinion nor those of the media company.

      1. lifelogic
        July 7, 2013

        Yes but he takes such a dim line of attack. He could have attacked his position with intelligent questions that did not show how small minded “BBC think” he was to the core. He could have done some proper research first too.

        When I hear lots of BBC programs on the problems for our schools of the very high numbers of non English speakers in schools, how the EU damages our industry everywhere, the disaster that was the ERM and the EURO, the corruption at the EU, the absurdity of the green subsidies, the lack of housing due to uncontrolled EU immigration, how people spend more efficiently than governments, the lack of recent warming, how climate is a chaotic system that cannot be predicted well ………….

        Then I may accept the BBC has changed. Even the ex-BBC people know, and point out, it is blatant propaganda.

        1. Jerry
          July 7, 2013

          @Lifelogic: Until you find a clue as the job of a journalist, rather than a political activist, quite frankly you do not really deserve to have an opinion…. The only person wanting blatant propaganda from the media is you Sir, and others bloggers like you! šŸ™

          1. Edward 2
            July 8, 2013

            Whereas you Jerry should endlessly have your opinions aired as they are always perfect in every way.

            So off on the train to Jerry Baz and Uni’s retraining camp with you Lifelogic as you don’t deserve to have opinions.
            Jerry has spoken

          2. Jerry
            July 8, 2013

            @Edward2: I never said anything about LL (or anyone else) not being allowed a rant, but if you don’t understand the difference between chalk and cheese it really is best not to stand up on stage and try writing on a blackboard with cheese – the only person made to look the fool is you!

          3. Edward2
            July 8, 2013

            Jerry,
            I think the heat must be getting to you with this very strange analogy.
            The word you originally used was “opinion” now quickly changed to “rant” I note.
            A rant being any post you don’t agree with.
            PS How is the request from our host for one post per day affecting you, or did you misunderstand it to be one post per hour?

  5. Richard1
    July 6, 2013

    The excellent economist Allister Heath has drawn attention to a comprehensive new study from Cornell University, showing conclusively how, based on evidence in the US from 1950 to 2010, high taxes discourage work and reduce prosperity whereas low taxes do the opposite. It is odd that leftists believe taxing ‘carbon’ will discourage its use yet don’t accept that high income taxes discourage work and that high capital and inheritance taxes discourage investment.

    1. Jerry
      July 6, 2013

      @Richard1: Well that is like saying that if you don’t remove all the flowers from your garden you will attract bees, so bleeding obvious I would question the intelligence of those at the university who conducted this “research”, certainly if they took more than a day to both conduct their research, examine the results and write their report! A better question to research would be to ask at what minimum level does taxes need to be for there to be a properly functioning First World Country/State (and thus society)?

      As for EU carbon taxes and more to the point, the sale of permits, a lot of right wing capitalists are growing rich buying and selling such permits, the trouble for much of the west is that (along with our wish to buy only on price, not worth) much of this trade is ending up in the BRICS countries due to buy-outs and mergers. Whilst the policies might have been put in place by “Lefties” they have been exploited by the Righties

      1. Richard1
        July 7, 2013

        Well Jerry its good you accept the conclusion as being obvious. Many leftists would assert the opposite. The Labour and Libdem parties for example believe in an increase in the top rate of tax. This paper – I suggest anyone criticizing it downloads it and reads it – shows that the periods when taxes have been lowered in the US over a long period are associated with better economic performance and vice versa.

        1. Jerry
          July 7, 2013

          @Richard1: That might because I am not a “Lefty”, on the other hand I’m not an unthinking, dogmatic, Righty either…

      2. Bazman
        July 7, 2013

        Socialism for the rich to far off this guys and lifgics radar for them to see. The idea that Germany has lower taxes and less regulation in the real world is laughable. A middle class country that reports on each other at every opportunity with very definite classes of people, but mainly middle class. A teacher with a large expensive car would be out of order as she does not earn enough. The idea that Britain can be this is not real, but lifloic cannot even understand KW/Hours so what hope is there? He then just spouts right wing propaganda with no basis.

    2. uanime5
      July 6, 2013

      Actually the evidence suggests the oppose, that high taxes increase prosperity and employment levels. This is why high tax countries such as Germany, Sweden, and Switzerland have better living conditions than the UK and lower levels of unemployment.

      1. lifelogic
        July 6, 2013

        Government Spending as a % of GDP

        State expenditure as a % of GDP
        Germany 43%
        Sweden, 52%
        Switzerland 32%
        UK pushing 50%

        Which has the highest GDP per cap Switzerland of course. It is of course not just the spending but how well it is spent. Governments usually spend very inefficiently indeed, in the UK however they do it in Spades. Pointless wars, HS2, the Olympics, bailing out the PIGIS, PV and wind subsidies, the climate act, the ERM, the green deal, aircraft carriers without aircraft etc.

        1. Bazman
          July 7, 2013

          Also the bureaucracy and tax system in Switzerland and Germany is mind bendingly complex and often petty, however, you do not want to believe this as it is not within your propaganda. Church tax anyone?

        2. uanime5
          July 7, 2013

          Two things about your figures lifelogic.

          1) Government spending bears no relationship to tax revenues.
          2) The fact that you had the exact percentages of state expenditure for all countries except the UK (47.3%).

          Here’s how much in tax revenues each country gets as a percentage of GDP.

          Germany 40.6
          Sweden 47.9
          Switzerland 29.4
          UK 38.9

          So as you can see the UK has a higher state expenditure than Germany because we borrow more, not because we have higher taxes.

          I also suspect that Switzerland is able to function with lower tax rates than the UK because its GDP per capita is twice that of the UK.

      2. libertarian
        July 6, 2013

        Er I don’t suppose you might want to you know actually check?

        Sweden has been LOWERING taxes for last few years

        Germany & Switzerland have similar levels of overall taxation to UK.

        Their unemployment levels are lower because they pay out less benefits which means that those that can are better off working

        1. Jerry
          July 7, 2013

          @libertarian: “Their unemployment levels are lower because they pay out less benefits which means that those that can are better off working

          Their unemployment levels are lower because they are more economically successful, what is more they have actually built that success despite the hight tax rates that have traditionally been applied. Nothing what so ever to do with benefits rates as such, a country that has full or close to full employment doesn’t need to pay such benefits, and if you start placing in-work benefits into the equation then I suspect that the countries you suggest spend less on benefits actually spend more due to the universal provision of work place child-care and the like.

      3. Richard1
        July 7, 2013

        You should check your facts uanime5. The prosperity of Germany and Sweden is accounted for by the radical supply side reforms both have implemented in the last 10-12 years (Germany) and 20 years (Sweden). This has seen tax cuts, tax simplification, benefit cuts and balanced budgets through the 2000s when the UK was in substantial deficit.

        Switzerland, as pointed out by Lifelogic, has much lower taxes and a much lower state / GDP ratio.

        1. uanime5
          July 7, 2013

          Germany has not had tax cuts, their taxes are some of the most complex in the world, their benefits are more generous than the UK, and the only reason they have a balanced budget is because they have a huge trade surplus.

          Perhaps you should try examining why Germany had been so successful.

    3. margaret brandreth-j
      July 6, 2013

      The argument is fatuous…I mean who does want to be taxed at all , we all want low taxes , we all would like to see our wages increased by 20% or for some 40% and I certainly begrudge giving it to some on more money than myself on benefits as a struggling single parent , and now a struggling granny. We do need scrupulous ethical thinking and not those whose arguments convince ‘the boys’ that they can get away with it . I do not categorise myself as left , centre , right , pink- liberal or anything ;I am just constantly hurt by the boasting sponges of this world who are considered clever because they have found like minded cheats to wound my sense of fairness . Kipling’s ‘ If ‘ still says it all.

    4. lifelogic
      July 6, 2013

      Everything leftists believe is odd and bogus science&economics. They even think high speed trains and wind farms are “environmental”and that governments “invest” when all they clearly do is take money of sensible individual investors and waste most of it.

    5. M Davis
      July 6, 2013

      The excellent economist Allister Heath …

      Hear, hear!

  6. Lindsay McDougall
    July 6, 2013

    The “Leave us alone Coalition” – I like that. The Conservative Party should become something like that in UK. There is no evidence that minute regulation of banks is superior to letting failed banks fail and prosecuting fraud. There is no evidence that the NHS is a good thing. And there is no evidence that taxpayers’ money needs to be involved in increasing London’s runway capacity. Let the London airports compete with each other. Finally, there is no evidence that in turn mollycoddling and bullying the elderly is of any use to anybody.

  7. uanime5
    July 6, 2013

    He told us that the 25 Republican states are cutting public spending at the state level in the USA, and setting lower state taxes. As a result there is migration from some of the 12 Democrat states like California into the lower tax Republican areas, as the enterprising and successful seek more favourable tax terms for their businesses and savings.

    Firstly how are these states cutting public spending? Is it by providing less infrastructure; giving less money to the police and fire service; and spending less on welfare and healthcare services? If so I can’t imagine that any educated person would want to live in this state when they can have better services in a neighbouring state.

    Secondly which people are migrating to these Republican states? If it’s mainly young men who are looking to make as much money as possible in their youth then this isn’t good for the state in the long term. However if families are relocating to these Republican states this indicates that these people are planning to remain in this state.

    Thirdly which people are emigrating from these Republican states? If it’s mainly older people who are looking to start a family or retire somewhere with better infrastructure then this isn’t good for these Republican states in the long term as the state will be constantly losing wealthy and educated people.

    I have remarked before on how the US deficit has fallen further than the UKā€™s thanks to states level spending reductions, now allied to Federal level cuts as well.

    Federal spending is still above the 2008 levels due to the huge stimulus introduced between 2008 and 2009.

    Apparently the lower taxes that some Republican states have introduced are also acting as a good stimulus to growth and greater prosperity.

    Do you have any statistics to back this up? According to the Bureau of Economic Analysis California has some of the highest growth in the USA. So which of its Republican neighbours is meant to be benefiting from all the migration from California?

    He also told us of the success of schemes to offer parents proper school choice by empowering them to spend the money for their childā€™s education themselves, allowing parents from low income backgrounds to have the kind of power and choice only enjoyed by the richest in the UK when they opt out of the state system.

    Without any background that’s a very misleading statement. In the USA you’re usually only in the catchment area of one school so parents can’t change which school their child goes to without moving (in the UK you’re usually within the catchment area of several schools, so you have some choice where your children can go).

    What John is referring to is most likely a voucher system where a schools gets a certain amount of money for each pupil that attends. This system allows parents to choose from several schools (like in the UK) rather than only having one choice. However the level of choice is nothing like that enjoyed by the wealthy who can buy their child a place in one of the best schools in the UK.

    He calls the Democrat coalition the ā€œTaking Coalitionā€, groups of people who seek money from the state or especially those who earn a good living out of distributing or spending state money.

    Doesn’t every politician fall into this category?

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