Tax Analysts®Tax Analysts®

My Subscriptions:

Featured News

June 2, 2015
Norquist Not Endorsing Graham's White House Run
by Paul C. Barton

Full Text Published by Tax Analysts®

When it comes to tax policy, Sen. Lindsey Graham of South Carolina appears to be starting his 2016 White House campaign with a Grover Norquist problem, not a good sign as he tries to win over GOP primary voters.

Graham, who announced June 1 he would contend for the Republican presidential nomination, said in November 2012 that under some conditions, he would consider violating the pledge he made to the Americans for Tax Reform founder to never vote for a tax increase, an antitax pledge made by nearly all GOP members of Congress in recent decades. Graham, appearing then on ABC's This Week, emphasized he was talking about raising revenues by getting rid of deductions, not by raising tax rates.

Norquist, in a May 29 interview with Tax Analysts, said he remembers the remark and continues to be troubled by it. "He was undermining the Republican Party," he said.

The pledge, as described on the Americans for Tax Reform website, says, "Candidates and incumbents solemnly bind themselves to oppose any and all tax increases." Norquist, who unveiled it 29 years ago, remains the nation's most high-profile antitax crusader.

Of Graham's remarks, Norquist also said: "It does raise questions about what commitments you make that are negotiable. I've never heard anyone say, 'Oh, I'm for the Second Amendment, but only for two years.'"

A Tax Increase Is a Tax Increase

Eliminating deductions is every bit as much a tax increase as raising rates, Norquist added. "Of course it is," he said, calling it "one of the ways Democrats try to trick you into raising taxes."

Graham, during his November 25, 2012, interview with ABC's George Stephanopoulos, said: "When you're $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece, and Republicans -- Republicans should put revenue on the table. We're this far in debt. We don't generate enough revenue. Capping deductions will help generate revenue. Raising tax rates will hurt job creation."

Graham added: "So I agree with Grover, we shouldn't raise rates. But, I think Grover is wrong when it comes to [saying] we can't cap deductions and buy down debt."

The South Carolina senator's appearance on the show came as Congress was wrestling with the so-called fiscal cliff. Taxes were due to go up on all Americans on January 1, 2013, unless Congress reached a deal with President Obama about extending the tax cuts passed under former President George W. Bush. Obama was pushing for -- and eventually got -- higher taxes on the wealthy in exchange for extending the tax cuts for others.

Graham, now 59, voted for the deal, another thing that irritates the Americans for Tax Reform president. It increased the top rate on the wealthy from 35 percent to 39.6 percent and also raised rates on capital gains and dividend income for the wealthy.

For Graham to make such comments at that time "shows he doesn't know how to negotiate well," Norquist said. Anytime possible tax increases are put on the table as a part of such negotiations, he said, "you will get spending increases." The 1982 tax negotiations between former President Reagan and Congress and the 1990 talks that led to former President George H.W. Bush surrendering his "read my lips, no new taxes" promise offer proof, he added.

But when Congress holds firm against tax increases, Norquist said, as it did in the August 2011 deal that led to the budget sequester, real spending reductions can be achieved.

Others See Willingness to Compromise

That Norquist has a bone to pick with Graham on taxes doesn't surprise some political observers who have watched the South Carolina lawmaker.

"He's always had the reputation of being a little bit slippery on some issues," Clemson University political science professor David Woodard told Tax Analysts. "He's not an ideological stalwart. He's a pragmatist."

If Graham were president, he wouldn't be eager to raise taxes, "but he wouldn't be tax-averse either," Woodard said.

Graham, who has been a senator since 2003 and before that served four terms in the House, has gotten several poor grades recently on his congressional votes from groups that are conservative on fiscal issues. For instance, FreedomWorks and the Club for Growth both rated him as agreeing with their positions only 58 percent of the time in 2014.

"The club will give its full review of Lindsey Graham's record on taxes when we publish our white paper on him, but his lifetime score on votes related to the club's issues is 74 percent with a 58 percent last year and 65 percent in 2013," Club for Growth spokesman Doug Sachtleben said in an e-mail. "His support for the Fiscal Cliff tax hike, [the Troubled Asset Relief Program, the McCain-Feingold campaign finance reform act], and protectionist trade policies would be just some of the votes that the club would see as contrary to a free market, pro-growth record."

Similarly, John Pitney, a political scientist and specialist on congressional Republicans at Claremont McKenna College in California, said, "He is definitely not going to be the favorite candidate of strong fiscal conservatives."

Conservative Enough?

Graham, except for the fiscal cliff deal, has otherwise recorded solidly conservative votes on other tax issues of the past 20 years. As a House member in 2001 and as a senator in 2003, for instance, he voted for both of the major Bush tax cut packages. And he opposed several attempts by Senate Democrats in the 2000s to raise taxes on those making $1 million and above.

Further, during a March speech in Concord, New Hampshire, he said, "If you took every penny of the 1 percent, including their dog, you wouldn't even begin to balance the budget."

Graham has also cast votes to ease the burdens of the estate tax and alternative minimum tax, including to repeal both.

While not as clamorous as other GOP candidates about tax reform, Graham told Politico in March: "We can flatten out the tax code. That's what Simpson-Bowles did. But we aren't going to abolish the IRS."

On other tax policy matters, Graham has supported the Marketplace Fairness Act, which would allow states to require Internet vendors to collect sales taxes.

"Graham is probably conservative enough on fiscal issues for the GOP primary electorate," said Geoffrey Skelley of the University of Virginia Center on Politics. "By most measures, he appears to be more or less in the middle of the Republican pack, ideologically speaking, which suggests he's kind of standard Republican fare in many ways."

But Skelley added: "However, Graham's inclination toward compromise on some issues, such as immigration, might make some . . . Republicans suspicious of Graham's conservative bona fides on other issues, such as fiscal matters."

About Tax Analysts

Tax Analysts is an influential provider of tax news and analysis for the global community. Over 150,000 tax professionals in law and accounting firms, corporations, and government agencies rely on Tax Analysts' federal, state, and international content daily. Key products include Tax Notes, Tax Notes Today, State Tax Notes, State Tax Today, Tax Notes International, and Worldwide Tax Daily. Founded in 1970 as a nonprofit organization, Tax Analysts has the industry's largest tax-dedicated correspondent staff, with more than 250 domestic and international correspondents. For more information, visit our home page.

For reprint permission or other information, contact