By Grover Norquist

On January 14 Virginia Democratic Governor Mark Warner released a two-year state budget calling for $1 billion in new taxes, including higher sales and income taxes. Republican house speaker Bill Howell said in response that he would oppose any tax hikes, but state Sen. John Chichester led 12 renegade Republican senators to endorse a $4 billion tax hike.

Warner had won the governorship (52n47 percent) in 2001 by promising that he would never raise taxes, and that any revenue increase would have to be put to the vote of the people. Within months of taking office, he actively had the state legislature put on the ballot a sales tax increase to pay for more roads in four northern Virginia counties and three southeastern counties, representing 47 percent of the population of Virginia. On November 5, 2002, these two measures were defeated by 55n45 percent and 62n38 percent, respectively. The establishment business community raised $2.5 million to support these initiatives, which were opposed by Virginia taxpayer groups and the Virginia Club for Growth led by Peter Ferrara and newly elected Sen. Ken Cuccinelli.

In legislative elections just last fall, the now pro-tax Republican senators ran for office claiming to be outraged at the suggestion that they would raise taxes. Chichester's campaign literature said, "As your State Senator, I am focused on a conservative agenda to keep taxes low and hold the line on spending." A fellow quisling promised, "Tommy Norment means lower taxes for working families."

Soon enough, the opposition to any tax increase pledged by the conservative and overwhelmingly Republican (61 R, 37 D, 2 I) House of Delegates began to unravel. Speaker Howell now urged all his Republicans to vote for a biannual budget that included a $500 million tax hike.

Allegedly, this was not a compromise, but a terribly clever move. The tax hike targeted those Northern Virginia big businesses, such as Dominion Power, USAir, and Comcast, which had cheerfully endorsed the massive sales tax effort of 2002. These firms would now lose sales tax exemptions that traditionally protect consumers from being double taxed on purchase of a given product or service. This gambit was flawed from the beginning; businesses do not pay taxes, consumers do, even if hidden in the price of electricity or a plane ticket. And fatally, the speaker allowed his appropriations committee to put the $500 million tax increase into the budget he had his legislature support. Thus before the first shots were fired, the Virginia House of Delegates, which promised to stand like "Stonewall Jackson" against taxes, retreated half way to the governor's position.

The Virginia Republican Party, led by state party chair Kate Griffith and state committeeman Morton Blackwell, denounced the renegade Republicans. In a joint appearance on March 1, Republican U.S. Senator George Allen and former Democratic governor Douglas Wilder demanded that any tax increase be put to a popular vote. Speaker Howell initially appeared to support this effort, only to undermine it sticking to his $500 million in new taxes and refusing to send that particular tax hike to the ballot.

Under strong pressure, the pro-tax GOP senators began to retreat, reducing their tax hike from $4 billion to $2.4 billionostill more than twice the Democratic governor's opening bid.
The tax fight in virginia highlights what has been happening across the country. The first thing to notice is that tax hikes are being debated at the state levelonot in Washington. Here the debate has been firmly won by the anti-tax forces within the Republican Party. In 1988, George H.W. Bush signed the Taxpayer Protection Pledge against tax increases and defeated Sen. Robert Dole. At a New Hampshire debate, Dole publicly refused to take the Pledge signed by all other Republicans running for president. Dole, who had smashed Bush in Iowa, lost in New Hampshire, lost his momentum, and lost the nomination.

Bush then raised taxes in 1990 to fund the Democratic Congress's new spending spree. Despite an otherwise successful administrationono scandal, managing the bloodless collapse of the Soviet Union, driving Iraq out of Kuwaitohe was humiliated in November 1992. National Republicans learned this lesson: Pledge against tax hikes and win; break the pledge and lose. The number of House Republicans who signed the Taxpayer Protection Pledge rose from 100 to 216 and Senate signers rose from 20 to 42. Not a single Republican senator or congressman has voted for a tax hike since November 1992. And George W. Bush has pledged never to raise taxes and has proposed and passed a tax cut every year of his presidency.

But at the state level, there is no united Republican opposition to tax hikes. Those governors who look in the mirror and see someone who might one day run for president or vice president have opposed any and all tax hikesoPerry of Texas, Bush of Florida, Owens of Colorado, Pataki of New York, Pawlenty of Minnesota, and Romney of Massachusetts. Perry closed a $10 billion overspending problem and Pawlenty a $4.2 billion overspending problem by reducing spendingonot papering over the problem with tax hikes.

Slacker Republican governors without national electoral ambitions, such as Mike Leavitt of Utah and Don Sundquist of Tennessee, have felt free to try to raise taxes. But even slacker GOP governors and legislators have been sent wake-up calls. Republican Gov. Bob Riley of Alabama conspired with the state teachers union and the Business Council of Alabama to raise taxes by $1.2 billion. Voters shot the proposal down by 68-32 last September 9. A billion dollar tax hike in Oregon passed thanks to 16 Republican defectors. Voters, however, defeated it soundly (59-41) last February 3.

In Alabama, Oregon, and Virginia, the big taxers found themselves relying on older Republicans who had come of age and learned their political principles under Nixon, not Reagan, and who didn't expect to run for office again. In Virginia, the average age of defecting Republican senators was 12 years greater than the age of those who opposed the governor's tax hike. In Oregon, at least three GOP defectors have already accepted a government job from the Democratic governor, allowing them to spike up their pension benefits. Their pro-tax vote bought them a secure retirement. Pro-tax Virginia senators were challenged to refuse similar pay-offs. All 12 defectors have demurred. The good news for taxpayers is that Republican pro-taxers will soon expire or retire, while younger ambitious Republicans who expect to run for re-election or higher office are remaining true to principle. This is a problem that is solved over time.

Another lesson from Virginia is that the only defensible anti-tax position is opposition to any and all tax hikes. As soon as Speaker Howell allowed some new taxes there was no line in the sand that would hold. He continued to retreat toward the governor's larger tax increase. His attempt to say he would oppose "broad based" tax hikes was not a distinction of interest to the media or public. His own Republican caucus recognized his willingness to fold as a weakness. As many as a dozen defectors announced on April 2 they will break with their speaker and vote with Democrats to enact a tax hike even larger than the governor's original billion dollar grab.
One of the healthiest developments in Virginia, as well as Alabama and Oregon, is that the Republican Party in each state has led the fight against tax hikes. Alabama party chairman Marty Connors spearheaded opposition to his own Republican governor. The executive committee of Alabama's GOP voted 19-2 against the tax hike. The American Conservative Union gave Connors the Ronald Reagan Award for his leadership. Oregon GOP chairman Kevin Mannix publicly supported the referendum to repeal the tax-and-spending increase that had won the support of 16 Republican state legislators. Virginia's state GOP and many county Republican committees have staked out the no-tax-hike position.

This is a momentous change in the party structure in America. In the recent past political parties have become bank accounts for governors or presidents. Party chairmen have been in fact appointed by politicians rather than elected by party activists, and discipline was wielded by the politicians against the party rather than the other way around.

But now the GOP has decided that, like Coca-Cola, it has a brand to defend. Major consumer brand names are fiercely defended so that consumers can safely pick up a Coke or an Advil and know what they are buying. The Republican label increasingly means a candidate will not raise your taxes. This greatly strengthens all Republican candidates. But a rat's head found in a Coca-Cola bottle discourages not simply the one consumer who bought the flawed bottle, but would make all consumers wary of Coca-Cola. Thus, "Republican" state senators like John Chichester are the political equivalent of a "rat's head in a Coke bottle." They raise questions about the fitness of Republican candidates. The GOP effort to disassociate itself from such apostasyoChichester's own county Republican Party has denounced himois an effort to protect the party's brand in the eyes of political consumers, both now and in the future.

The example set by the Republican Party victories in Alabama and Oregon, and even in the likely defeat in Virginia, has reinforced the anti-tax position. The commitment of the GOP to a strong, anti-tax brand, even if all Republican elected officials have not yet caught on, has set the stage for a coherent governing party.
Grover G. Norquist is the president of Americans for Tax Reform.

LOAD-DATE: February 25, 2005