Olivia Grady

ATR, CWF Applaud President Trump on Civil Service Reform

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Posted by Olivia Grady on Friday, May 25th, 2018, 6:03 PM PERMALINK

President Donald Trump today signed three Executive Orders aimed at reforming the civil service and supporting American taxpayers.

The first Executive Order encourages agencies to negotiate contracts with labor organizations in less than a year. Shortening this bargaining time will lead to better union contracts and will save U.S. taxpayers money. The long bargaining times are costly because taxpayers pay the salaries of union negotiators. In fact, in 2016 alone, the salaries of union negotiators cost taxpayers $16 million. In addition, the Executive Order makes federal collective bargaining more transparent by requiring the publication of union contracts in a public online database. Finally, this Executive Order creates a Labor Relations Working Group.

The second Executive Order directly addresses official time, the policy that federal government workers spend some or all of their time working for the union while being paid by U.S. taxpayers. Representative Mark Meadows (Chairman of the Subcommittee on Government Operations, U.S. House Committee on Oversight and Government Reform; R-NC) just held a hearing yesterday on official time and released a memo noting that the Office of Personnel Management estimated that just the payroll costs alone for employees on official time in 2016 were $177.2 million. These costs, however, are likely higher.

This Executive Order requires agencies to renegotiate contracts with unions to cut official time by an average of two-thirds. In addition, federal employees will only be allowed to spend a maximum of 25% of their time on union work. This will allow the agencies to get more work done. The Social Security Administration, for example, estimates it could complete 17,000 more disability determinations annually if official time was eliminated. In addition, employees who use Federal office space for non-agency business will have to pay rent, and their travel expenses for non-agency business will no longer be reimbursed. These reforms will also save U.S. taxpayers at least $100 million a year.

The final Executive Order strengthens the merit system of federal employees by streamlining the process to fire poor employees. The current process is lengthy and hurts federal agencies. Tenured federal employees, for example, are 44 times less likely to be removed from their positions than private sector workers. In some cases, employees have stolen federal property and not been fired. In addition, it takes 6 months to one year to fire these employees and an additional 8 months if there is an appeal. This Order also requires agencies to report information on disciplinary actions and management of poor performers to the Office of Personnel Management for publication so that poor performers will not be rehired by other agencies.  

Americans for Tax Reform and the Center for Worker Freedom applaud President Trump on these important reforms that will strengthen the federal workforce and save taxpayers money. 


ATR, CWF Support NLRB Rulemaking on Joint Employer

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Posted by Olivia Grady on Tuesday, May 15th, 2018, 4:21 PM PERMALINK

Americans for Tax Reform and the Center for Worker Freedom applaud the National Labor Relations Board’s decision to consider rulemaking to clarify the joint-employer standard under the National Labor Relations Act.

In 2015, the National Labor Relations Board (NLRB), whose members were appointed by President Barack Obama at the time, issued a decision in Browning-Ferris that has confused and harmed small businesses. That decision changed and expanded the definition of joint employer to include businesses that only have an indirect control over employees, dramatically increasing their liability. Unfortunately, the result has been that large businesses have tried to limit their liability by providing fewer services to their franchisees. These small businesses have suffered great harm as a result and have been unable to hire as many people.

The new standard also has confused businesses. Under this new standard, the Board determines case-by-case whether there is a joint employer. Under the previous standard of direct and immediate control, businesses knew if they were a joint employer.

Because of its harm to small businesses and employees, Americans for Tax Reform and the Center for Worker Freedom support changing the joint-employer standard back to direct and immediate control.

More from Americans for Tax Reform


ATR Supports the Nuclear Waste Policy Amendments Act

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Posted by Olivia Grady on Wednesday, May 9th, 2018, 3:29 PM PERMALINK

This week, the House of Representatives will take up H.R. 3053, the Nuclear Waste Policy Amendments Act, sponsored by Congressman John Shimkus (R-Ill.).

H.R. 3053 has been approved by the House Energy and Commerce Committee on a bipartisan vote of 49-4. Americans for Tax Reform now urges all members of the House to vote for this bipartisan, commonsense legislation.

Currently, there is no permanent geologic repository for spent nuclear fuel and waste in the United States. The 1982 Nuclear Waste Policy Act was supposed to allow the Department of Energy (DOE) to build and operate a repository, and electricity ratepayers have actually paid over $40 billion to the Department for this project.

However, the repository has not been built yet. This is despite DOE studies in 1987 showing that Yucca Mountain was a top site, and Congress even enacted a resolution designating Yucca Mountain for a repository.

Because a repository wasn’t built before a 1998 deadline, the Department of Energy now owns this waste, and taxpayers have to pay nuclear utilities to store the fuel and waste. In fact, American taxpayers now owe over $34 billion to the nuclear utilities for this storage.

The Nuclear Waste Policy Amendments Act would stop wasted taxpayer dollar and would encourage the storage of the waste in a repository. One possible location for a repository is still Yucca Mountain, and there is a license pending from 2008. The act would resolve the pending license and begin the formal licensing process to determine if the repository can be built.

If the bill is passed, the Department of Energy would also be allowed to start a temporary storage program to consolidate the waste. The act also allows for defense-waste to be quickly removed from Department of Energy sites in order to protect national security. Finally, the Department of Energy program management and organization would be strengthened.

Members of Congress should vote for the Nuclear Waste Policy Amendments Act to end the needless waste of taxpayer resources and electricity ratepayer fees and finally move forward on construction of a waste repository. 

Photo Credit: Flickr


ATR Supports Rep. Westerman's Amendment 185 to the FAA Bill

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Posted by Olivia Grady on Monday, April 23rd, 2018, 4:15 PM PERMALINK

Today, Americans for Tax Reform released a letter in support of Representative Bruce Westerman's (R-AR) amendment 185 to the FAA Reauthorization Act of 2018 (H.R. 4).

Americans for Tax Reform supports this amendment because it will keep prices low for customers, clarify the law for airlines, and prevent frivolous lawsuits.

You can find the letter below or click here for a PDF version:

April 23, 2018

The Honorable Pete Sessions
Chairman, Committee on Rules
United States House of Representatives
H-312 The Capitol
Washington, DC 20515

Dear Chairman Sessions:

I am writing to urge you to allow Representative Bruce Westerman’s (R- AR) amendment  (#185) to the FAA Reauthorization Act of 2018 (H.R. 4) to be offered on the House floor.

The amendment simply includes pay and scheduling of a flight crew under federal jurisdiction in order to avoid frivolous lawsuits and the regulation of flight crew by many states and local governments.

Unfortunately, some flight attendants have recently used the lack of clear language in the law to challenge their pay in frivolous lawsuits. They claim they are owed the minimum wage in each of the states and local governments that they fly over. However, if the airlines were forced to follow all of the state and local regulations, it would be extremely costly and burdensome. They would have difficulty following the laws of state and local governments since flights typically fly through a number of jurisdictions during a flight.

A federal preemption of pay and scheduling of a flight crew clarifies the law for the airlines and allows the airlines to follow just one law, instead of at least 37 different pay and scheduling laws from the states and local governments.

Further, the Airline Deregulation Act of 1978 already preempts states and local governments from regulating airline prices, routes and services. This preemption has led to efficiency, low prices, and a variety of quality air transportation services.

Americans for Tax Reform supports Amendment 185 because it will keep prices low for customers, clarify the law for airlines, and prevent frivolous lawsuits.

Onward,

Grover G. Norquist
President, Americans for Tax Reform


New Trump Admin Healthcare Rule Will Expand Healthcare Coverage and Lower Costs

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Posted by Olivia Grady on Wednesday, February 21st, 2018, 3:38 PM PERMALINK

The Departments of Health and Human Services, Labor and Treasury yesterday proposed increasing the flexibility over short-term, limited duration health insurance. The rule calls for increasing the maximum duration for these plans from 3 months to 12 months.

Extending this time period for short-term coverage will help those between jobs or taking a semester off from school. It will also give families across the country real healthcare choice at an affordable price. An unsubsidized ACA-compliant plan costs about $393 per month, while a short term, limited-duration plan costs about $124 a month.  

President Trump has focused on lowering the cost of healthcare and expanding coverage during his Presidency given the failure of Obamacare in recent years. Under Obamacare, families have been forced to purchase unaffordable plans, access to care has decreased, while premiums have skyrocketed. According to the Department of Health and Services, from 2013 to 2017, average premiums, for example, have more than doubled, while half of U.S. counties have only one insurance carrier. 

The administration should be commended for taking this important step forward in promoting healthcare and allowing consumers more options when purchasing in healthcare coverage.

While this is an important step forward toward promoting affordable healthcare and flexibility, it is still just one step.

The Trump administration and Congress have achieved other victories, such as the repeal of the individual mandate tax penalty in the Tax Cuts and Jobs Act. This granted massive tax relief to low-income families across the country as 80 percent of those who paid the penalty who paid the penalty earned less than $50,000 per year. This bill also did not repeal the option to purchase healthcare, every American that was eligible for Obamacare and for the Obamacare subsidies are still eligible for them. The only difference is there is no penalty for not purchasing insurance.  

Even so, more work remains to be done.

Republicans should act to delay and repeal the nearly 20 new or higher Obamacare taxes. They should also promote consumer choice through the expansion of HSAs while addressing many Obamacare regulations that have increased the cost of care.

Regardless, this rule is an excellent step in the right direction and will provide flexibility to consumers to purchase temporary health insurance that better fits their need.

Photo Credit: Gage Skidmore


Support Taxpayers and Consumers: Reform U.S. Sugar Policy Now

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Posted by Olivia Grady on Friday, January 26th, 2018, 12:30 PM PERMALINK

On January 22, 2018, the Coalition for Sugar Reform held an event on Capitol Hill about why the U.S. needs to reform its sugar program.

Dr. Vincent Smith (AEI and Montana State University), Carson Middleton (Congresswoman Virginia Foxx), Bill O’Conner (Sweetener Users Association), Thomas Gremillion (Consumers Federation of America), and Ross Marchand (Taxpayers Protection Alliance) gave persuasive arguments on why the U.S. sugar program is hurting consumers and taxpayers.

The U.S. sugar program raises the price of sugar through four different ways. First, the federal government elevates the price by setting a minimum price for sugar. Second, the government tells the beet processors and cane mills how much sugar they can produce. Third, the United States imposes import quotas even though the U.S. needs sugar imports to meet the demand for sugar. Finally, there is a Feedstock Flexibility Program that requires the government to buy sugar surpluses and sell it to ethanol plants at a lower price.

All of these policies hurt the American consumer and taxpayer and only help a few very wealthy sugar processors.

Because of these policies, American consumers spend about $2.4 - $4 billion more every year. In addition, this program cost 123,000 American manufacturing jobs from 1997 to 2015. Finally, taxpayers have spent hundreds of millions of dollars on this program, including a nearly $259 million bail out to big sugar corporations for loan defaults in 2013.

U.S. Representatives Virginia Foxx (R-NC) and Danny Davis (D-IL) and U.S. Senators Jeanne Shaheen (D-NH) and Pat Toomey (R-PA), however, have offered a bipartisan solution: the Sugar Policy Modernization Act of 2017 (H.R. 4265/S. 2086).

This Act would reform the U.S. sugar program. First, the Act ensures that taxpayers are no longer responsible for loan defaults by large sugar processors. In addition, the U.S. Department of Agriculture would no longer have to set import quotas and would have more flexibility in administering the program. The marketing allotments and the Feedstock Flexibility Program would also be repealed.  

The U.S. sugar program is the only commodity program that wasn’t reformed in the last Farm Bill. The time to reform this program is now.

Because of its negative effects on taxpayers, consumers, and small businesses, Americans for Tax Reform supports reforming the sugar program and supports the Sugar Policy Modernization Act.


ATR and CWF Support Multiemployer Pension Plan Reform


Posted by Olivia Grady on Tuesday, December 5th, 2017, 5:06 PM PERMALINK

Today, Americans for Tax Reform (ATR) and the Center for Worker Freedom (CWF) released a letter to Congress, urging members to reform multiemployer pension plans.

[The letter can be found here]

As the letter says, there are 100 multiemployer pension plans that will likely become insolvent if Multiemployer Pension Reform Act (MEPRA) benefits are not reduced. Insolvent pension plans would have a negative impact on the U.S. economy. In order to avoid this, ATR and CWF urge members of Congress to consider long-term federal government loans at a low interest to the troubled pension plans. Supporting this proposal would not break the members’ Taxpayer Protection Pledge.

The full letter is below:

Dear Member of Congress:

We write to urge Congress to reform multiemployer pension plans because of the negative impact insolvent pension plans would have on the U.S. economy, the federal government, and all Americans.

Currently, there are 100 multiemployer pension plans that will likely become insolvent if Multiemployer Pension Reform Act (MEPRA) benefits are not reduced, according to the Pension Benefit Guaranty Corporation (PBGC). Insolvency of these plans would require the PBGC to loan about $60 billion to pay for the guaranteed benefits of 1 million workers and possibly lead to the insolvency of the PBGC itself in 2026. Because of these problems, saving these plans in the future would likely require $600 billion, according to the Heritage Foundation, to pay future claims for the insolvent plans.

One viable solution to this problem is for the federal government to provide long-term loans at a low interest to troubled pension plans. These loans would cover the cash flow shortage of the plans for five years. In addition, the pension plan benefits could be reduced up to 20 percent.

After five years, the pension plans would repay their loans, paying only the interest for the first five years. However, to ensure the loans would be repaid, a Risk Reserve Pool would be established with non-government funds.

Americans for Tax Reform and the Center for Worker Freedom support this proposal because it addresses the problem of insolvent pension plans without providing a government bailout. Long term, policy should increasingly favor defined contribution plans and move away from defined benefit plans, whose profound problems continue to accumulate throughout our economy.

While it is unusual for ATR and CWF to support a solution that continues government loans, when combined with benefit cuts this approach has the potential to stop the bailout that could be triggered by the guarantee already established by law. Supporting this proposal does not break your Taxpayer Protection Pledge.

Sincerely,

Grover Norquist
Americans for Tax Reform

Olivia Grady
Center for Worker Freedom


A (Properly Designed) Territorial Tax System Will Make America More Internationally Competitive

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Posted by Alex Hendrie, Olivia Grady on Monday, October 30th, 2017, 3:46 PM PERMALINK

Full PDF of this Document Can be Found Here]

 

The United States currently has a worldwide system of taxation where all income of residents is taxed, including foreign income. Because foreign income is often taxed where it is earned as well, this creates a double layer of taxation and subjects businesses to complex rules. Also, because the foreign income is not taxed by the U.S. until repatriated, trillions of dollars of foreign income is stranded overseas and not invested in the U.S.

The majority of countries have fixed these problems, particularly in recent years, by switching to a territorial system where income is taxed in the country it is earned. The U.S. should follow their lead and switch to a territorial system in order to modernize its uncompetitive and outdated system.

However, in transitioning to a territorial system, the U.S. should consider base erosion rules. These rules help determine what income should be taxed, especially with passive income, because international tax is complex with frequent cross-border transactions between multinational corporations and their foreign subsidiaries.

These rules need to be carefully considered though because overly burdensome rules would hurt U.S. businesses and make them less competitive. Other countries have rules on transactions with controlled foreign corporations (typically subsidiaries), dividend exemption systems and limitations on the tax deductibility of interest.

Another approach that some have suggested is a broad based minimum tax on foreign profits, but this might undercut the change to a territorial system.

[Full PDF of this Document Can be Found Here]

Photo Credit: Flickr


TPC Study Based on Flawed Assumptions, Fails to Use Accurate Scoring

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Posted by Alexander Hendrie, Olivia Grady on Friday, October 6th, 2017, 10:30 AM PERMALINK

[Full PDF of this Document Can be Found Here]

Since President Trump and Republicans in the House and Senate released their joint tax reform framework last month, many have rushed to judge the plan. While this plan is an excellent first step, it is still just a framework that will further be developed by the Committees of jurisdiction, as noted in the document. The next step in the process is to move through regular order:

 “This unified framework serves as a template for the tax-writing committees that will develop legislation through a transparent and inclusive committee process.”

Despite this, some have decided to prematurely analyze the tax framework using their own assumptions. Exhibit A amongst these biased analyses is the study published by the Tax Policy Center, a joint project of the left-leaning Urban Institute and Brookings Institution. 

This study fails to take into account numerous issues.

First, it does not take into account any dynamic macroeconomic effects of the tax changes. Instead, it analyzes tax changes solely on the static revenue lost or gained as if every tax cut or tax increase is the same and has no effect on behavior.

Second, it assumes numerous details that have not been decided yet. The framework did not include the income ranges for the individual brackets or the size of the expanded child tax credit. Both of these will be decided by Committees of jurisdiction. The Tax Policy Center study included income ranges and the size of the credit despite this.

[The Full Document is Also Available Here] 

Dynamic Scoring is Key to Any Realistic Analysis of The Tax Reform Framework

The analysis conducted by the Tax Policy Center fails to use dynamic scoring to analyze the benefits of the plan. Instead, it uses static scoring to downplay the positive economic effects of the plan.  Realistic scoring of tax proposals must use dynamic scoring for several reasons, as outlined by the Tax Foundation. 

First, static scoring does not take into account the changes to the economy and specifically economic growth that a tax change might cause. With dynamic scoring, however, representatives can understand the real benefits and costs of a tax change proposal. Dynamic scoring, therefore, is simply more accurate scoring. 

A high tax rate will discourage some people from working as much because if the government is taking away most of the money from an additional hour that they’ll work, it won’t be worth it to work. However, if the government only takes a small percentage, more people will choose to work to i.e. save up for a vacation or their child’s college tuition. Dynamic scoring reflects these behavioral changes, while static scoring does not.

Second, many tax changes made in the GOP framework are designed to promote economic growth. Because this is the goal, lawmakers need to understand how the change will affect economic growth. Static scoring does not show economic growth. It assumes that the gross domestic product will remain the same.

The Unified Framework is a plan to grow the economy and increase the number of jobs. In fact, economic growth is one of President Trump’s goals for tax reform. Using static scoring makes it impossible for policy analysts to determine how much economic growth and how many jobs this framework will create.

Finally, static scoring does not show all the benefits of tax cuts. It downplays how much additional money the Treasury will see from economic growth due to the tax cuts. Therefore, the Congressional Budget Office’s (CBO) estimates were often very far off from reality before the office started using dynamic scoring. Despite how far off the estimates were, the analysis by the CBO and JCT did determine whether a tax change passed.

Due to these reasons, Congress passed the Pro-Growth Budgeting Act of 2013, requiring the CBO and the JCT to use dynamic scoring. However, both the CBO and the JCT do not use as robust scoring as they should.

An example of how their scoring isn’t robust enough is one provided in Curtis Dubay’s 2015 Heritage article, “JCT Dynamic Score of Bonus Depreciation: Highly Flawed.” His example was bonus depreciation, a policy that allows businesses to deduct 50 percent of their investments in the year that they purchased them. The Joint Committee on Taxation (JCT) said this policy would only grow the size of the economy by .2 percent over ten years using dynamic scoring, while the Tax Foundation argued that the economy would grow by 1.1 percent over ten years.

Despite this flaw, the scoring by the CBO and JCT is more accurate than if they used static scoring.

While there are clear reasons for using dynamic scoring, the Tax Policy Center surprisingly examined the effects of the Congressional Republican’s proposal, the “Unified Framework for Fixing Our Broken Tax Code” using static scoring. The Center now claims that the framework would reduce federal revenue by $2.4 trillion over ten years. In addition, those with the largest income would see the biggest tax cuts, and some would experience a tax increase under this plan.

The United States has historically seen large economic growth after tax cuts, and economic growth is one of the main purposes for this tax cut. If you think that there isn’t going to be growth after a tax cut and the taxes have been reduced, it is not a surprise that federal revenue decreases and deficits increase. The Wall Street Journal pointed this out in a recent article and predicts that if GDP growth increases to 3% a year with this tax cut, the Treasury would see an additional $2.5 trillion. 

Efforts to Attribute Distributional Effects to the Framework Are Premature

As the framework notes, specific details, such as the income threshold for the consolidated tax brackets, will be developed by the House Ways and Means and Senate Finance Committees. Given this, any detailed modeling including distributional tables is premature and based on assumptions on details that have yet to be decided.

Despite this, the report by the Tax Policy Center conducted a detailed analysis of the changes to the framework, based on their own assumptions they claim that there would be little to no benefit for many Americans.

These conclusions are very different from those reached by the Tax Foundation. Tax Foundation Senior Analyst Scott Greenberg explained in an article, ”What Would the “Big Six” Framework Mean for Lower-Middle Income Households?” how the plan would affect lower-middle income households. 

Greenberg says that the GOP individual tax proposal would reduce federal revenue by $209 billion on a static basis. The plan would benefit taxpayers in the 20% to 80% income group most, while the highest earners would pay more in taxes due to the elimination of most itemized deductions. The bottom 20% would gain from the increased standard deduction and child tax credit.

Similarly, Ryan Ellis, Senior Tax Advisor for the Family Business Coalition, found that the TPC was understating the benefits of the tax reform framework. In a recent Forbes column, he describes three typical scenarios. All three median scenarios will allow the individuals or families to invest in the economy, instead of “investing” in poorly performing government programs that were created to help politicians stay in power.

His first scenario is a family of four. The family has two children under the age of 14. The family earns the median income for a married couple, $87,000, according to the Census bureau. While the larger standard deduction reduces the family’s taxable income substantially, the lack of a personal exemption makes the family’s taxable income larger after the deductions have been taken. However, once the child tax credit is accounted for, the family receives a tax cut of $1223. This is a substantial decrease for a family that owes $4560 under the new tax plan.

The second scenario is a single mother with two small children. She earns the median income of a female head of household, $41,000. Once again, her taxable income after only the larger standard deduction has been applied is larger than her taxable income after the current standard deduction and the personal exemption have been applied. This changes again when the larger child tax credit is used. Her tax cut is $498. Under the new plan, she not only doesn’t have to pay $258 in taxes, she is given $240 by the federal government.

The final example is that of a single person who earns $36,000. She also benefits from the framework. However, once the larger standard deduction has been used, her taxable income decreases even without the personal exemption. Her taxes decrease from $3,374 to $2,880, and she receives a tax cut of $494.

Photo Credit: 401(K) 2012

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Grover Norquist on Tax Reform, Lobbyists, and Cockroaches

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Posted by Olivia Grady on Friday, September 29th, 2017, 12:32 PM PERMALINK

On Thursday ATR president Grover Norquist was a guest on C-SPAN Washington Journal. Norquist voiced his support for the new Republican tax reform plan.

Norquist explained that the plan will raise take-home pay for Americans and lead to greater job growth. He pointed out that the biggest winners under this proposal are those without jobs:

“Who wins in this tax cut? The guy who spent eight years without a job and is now going to get one. That person goes from zero to 20 or 30 or $40,000 a year when jobs get created. We know that when you reduce the tax burden you get more job creation.”

Norquist spoke about how the U.S. once had one of the lowest corporate tax rates in the world, but other countries have since lowered their rates. Now, the U.S. has one of the highest tax rates on corporations. The result has been that American companies who do business internationally are more valuable if they are owned by foreign companies.

During the call-in portion of the show, a viewer worried that there were too many lobbyists involved.

Norquist said:

“The best way to keep cockroaches out from under your sink is to not put a cake under your sink because the cockroaches will come. The best way to make the lobbyists go away is to reduce the size and scope of government so that government isn’t handing out other people’s money for free. Then the lobbyists will go get real jobs. The size of government is what breeds lobbyists.”

A Democrat viewer who had moved from New York to Florida also asked how the tax cuts were going to create jobs because he claimed tax cuts don’t create jobs.

Norquist pointed out that the caller had moved from a high tax state to a lower one:

“So, you’ve moved to Florida, a state with no income tax. Period. People leave New York every year, and people move to Florida every year. And the reason is that taxes do matter and jobs are created in states that are lower taxed. What President Trump and the Republicans want to do is do for all America what Florida and Texas have done in their states, which is to reduce taxes to the point where they’re where people want to invest, they’re where people want to move. That’s where the jobs are moving to.”

Norquist finished his interview by pointing out the differences between the recovery under Reagan and the recovery under Obama: “You can compare the Reagan growth and compare it to the Obama numbers. They’re very sad and devastating.”

To view the full interview, click here.

Photo Credit: Gage Skidmore


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