Norquist Opposes AIG Tax, But Says It Doesn’t Break Tax Pledge

By Lindsey Ellerson

Mar 19, 2009 11:29am

ABC News’ Z. Byron Wolf reports from Capitol Hill: While everyone seems to be outraged about the $165 million in bonuses awarded to AIG executives at the troubled financial products division, the plan by Democrats in the House to vote on a special "AIG tax" presents some problems for anti-tax Republicans. There’s the small matter of the anti-tax pledge that 172 Congressmen and 35 Senators – most Republicans – have signed. According to Grover Norquist at Americans for Tax Reform, the guardian and chief lobbyist for the anti-tax pledge – this was before details of the House bill that will be voted on today emerged last night – the tax could be feasible if it included tax cut or cut in spending someplace else (it does not). It’s a simple pledge and there is little wiggle room to tax AIG bonuses. The bill considered today will claw back 90 percent of bonuses paid to people making more than $250,000 at firms receiving more than $5 billion in government bailout money. The anti-tax pledge itself is simple. The signer agrees to: 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. But that does not mean any and all "AIG tax" would violate the pledge. According to Grover Norquist at Americans for Tax Reform, the guardian and chief lobbyist for the anti-tax pledge, the tax could be feasible if it was included with a tax cut or cut in spending someplace else, but it is not.  When contacted by ABC News, Norquist responded with a long and animated voicemail message, saying the tax and bonuses are beside the point.  He suggests instead of raising taxes on the AIG executives, he’d prefer to raise taxes on the "idiot senators and congressmen who voted to give the money to AIG in the first place." "Those are the people responsible. They’re the guys who caused the money to be wasted… If somebody gives you free money and then wants to whine that you bought scotch with it, it’s none of their ‘GD’ business once they were stupid enough to give you other people’s money," he said. "This is Democratic congressmen and senators I see here from the Ian Swanson piece trying to cover their butt.  They did this. They threw money at people who paid big bonuses, many of whom are contributors to Democrat Senators, and they’re trying to cover the fact that they did that by yelling at other people." To listen to the full voicemail message, click HERE. UPDATE: Grover Norquist is now coming out against the bill to tax AIG bonuses, as reflected in a statement released by Americans for Tax Reform. "Americans for Tax Reform remains STRONGLY OPPOSED to H.R. 1596, the Rangel-Pelosi bill to tax AIG bonuses in order to deflect blame from Secretary Geithner’s failed mismanagement of Treasury funds," the statement reads.  "The Democrat ploy to cover up and detract from the Obama/Geithner/AIG scandal is to pass a bill of attainder, probably unconstitutional, to pretend to recoup perhaps one-tenth of one percent of the $160 billion they have given AIG…ATR urges all Members to vote ‘no,’ to demand that Geithner resign, and that Congress enact real legislation forbidding future bailouts and specifically banning AIG from receiving further funds." UPDATE 2: Norquist called ABC News back to clarify his stance.  While he doesn’t agree with the AIG tax bill and is urging tax pledge signatories to oppose it, he’s not going to say that people who vote for it are breaking the pledge. "It’s a phony, unconstitutional, cover your butt vote," Norquist said, arguing that it had more to do with politics than with tax policy.

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