 Welcome to Free Thoughts from Libertarianism.org and the Cato Institute. I'm Trevor Burrus, a research fellow at the Cato Institute Center for Constitutional Studies. I'm Aaron Ross Powell, editor of Libertarianism.org and a research fellow here at the Cato Institute. Joining us is Grover Norquist, president of Americans for Tax Reform. He is the author of the new book, End the IRS Before It Ends Us. Welcome to Free Thoughts, Grover. Good to be with you. So before we get to your new book, I wanted to talk a little bit about your background and how you got into politics in Washington, D.C. What was your first political job that you ever had? I was in seventh grade. I went down to, I got on the train from 12 miles outside of Boston into Boston to go work on the Nixon campaign in 68. What made you such a believer? Was it just you loved the politics or were you already a fervent Republican? No, I wasn't any communist. And from there I decided I didn't like my government all that much, but so as a Soviet's first anarchist to get rid of theirs first and start working on ours in terms of size and scope of government. Maybe that would explain so you went from... What did you do on the campaign as a kid? As a kid, I was a kid. I sorted addresses for people they were either trying to raise money from or get out the vote on. So basically they were three by five cards with addresses. Wow. And making sure they were all in... Databasing basically. Yeah. Yeah, in little boxes. Scary how... Far we've come? Yes. Scary how far back we were, yes. So did you work on campaigns in 72 and 76? I did. I worked on the congressional campaigns in what was the fourth congressional district in Massachusetts, all of our unsuccessful efforts to defeat Father Robert Dryden. And I was involved in those and then back in again after college in 80 for the Reagan campaign. Okay. And you also worked at National Taxpayers Union, correct? Yes. Well, as soon as I finished college, graduated in 78, I rented a van and I drove down with my stuff and James Dale Davidson's stuff that he had asked me to bring down from Boston to D.C. to be the associate director, number two guy at the National Taxpayers Union. And within a month or so, I was the executive director because the executive director moved down the street. And that was the year of Proposition 13. The real baptism in fire was people call you, you're just out of college, you're 20-something, and Time Magazine's colleagues are your opinions out there. These guys have no idea what they're talking to. But you realize that there are no rules in politics, there's no age requirement, there's no license. They can't tell you, you can't do that. And first of all, the whole taxpayer movement was a bunch of people who didn't have permission to get involved in politics. They made all the decisions, they just kept raising taxes. But you saw Prop 13 that year and there were a dozen other states with initiatives and I worked on all of them. Now which one was Prop 13? Proposition 13 was California. Cut the property tax to basically in half and then it limited the growth of assessments up 2% a year. And it required a two-thirds vote to raise taxes. There are a bunch of very good, solid protections there. Simple. So it wasn't one of these very complicated percentage of GDP measures which, as interesting as they were, they were flawed because they were too complicated. And they were hard to sell to people and hard to defend. Two-thirds to raise taxes, everybody gets it, everybody gets two-thirds is on purpose to be more difficult than half. And people can do two-thirds. If you do three-fifths, they think it's counting slaves and they have to look at their fingers. Two-thirds, they can imagine the pie. They get two-thirds. It's a much more popular number than three-fifths. This whole idea of you thinking about messaging and what people get and what is the simple way of selling a limited government really ties into the pledge. But before we get to the pledge in ATR, you also had a period where you were working with anti-Soviet guerrillas which I wanted to ask you about. Sure. During the Reagan years, I spent some time in Angola working against the Cubans there and helped organize a meeting of the various resistance movements from Central America, Africa, Afghanistan, Laos. And we did that in Angola, a little conference. And I spent a little bit of time up on the border in Afghanistan. Not a complete mess, but at the time it was a lot of concern about the Soviet Union and its occupation at the time of Afghanistan. And was that private? I mean, you did that just on your own or was it through the government that you got involved with? No, all on my own. I did some writing and work with Zivinbi and was trying to just be helpful, bring attention and support to those political movements, which I think were very helpful in weakening the Soviet Empire without costing the United States a lot of money. No American lives, not much American money compared to other ways to organize these things. And it bled the Soviet Union and eventually the Soviet Union collapsed and ceased to exist as an entity. So it was a smart move compared to other ways to have done things. What does such a meeting look like? I mean, I'm just curious. You've got all these resistance. I'm picturing AK-47s involved. What does it look like? What do you talk about? It is interesting because everybody's got the funny hats, right? Afghanistan has the big military hat. And the guy from Laos is freezing because nobody told him that it got cold at night in the desert. It was very interesting. I drafted the joint declaration they put out. I typed it on a Portuguese typewriter without looking down. And the Portuguese typewriters transposed like T and S and R and M or something to get down your absolute gibberish as you looked down. So you had to redo the whole thing. But it was very interesting. Basically it was making the case that this is a common cause. Making the case that this was an anti-imperial movement just as existed in Latin America against Spain, as existed throughout the world in the 60s against Britain, France and the Netherlands and the Belgians and the various imperial powers. And the remaining large imperial power was the Soviet Union. And that was a big deal because they really bothered the Russians and the Soviets to think of themselves as an empire-pressing people. It wasn't just places like Cuba and Mozambique and Angola and Ethiopia. It was places like Ukraine. And that's what really took them apart was that the idea that they had to cease to be an imperial power. Now in 85 you started ATR at the request or suggestion of Reagan. The White House put it together and then they asked me to run it. It was sort of like organizing for America, which the Obama people put together. We were the grassroots organizing campaign in support of what became the tax reform effort of 86. I don't know that they'd ever done that before. We never had a conversation about, oh, we did this for a trade bill. Or, oh yeah, we did this for the first Kemp-Roth tax cut. I think this was the first time out because it was not put together the way I'd have organized it if I was running from the start. But it was a good start and we ran a campaign in support of lower marginal tax rates. And I created the Taxpayer Protection Pledge as part of it because there were a lot of people who were worried that if you cut the rates, if you cut the rates down and broaden the base, over time the rates would creep back up and you'd lose even the protections of the deductions and credits. So the pledge was a written commitment to oppose raising rates or broadening the base unless it was revenue-neutral or better. And we had 100 members of the House and 20 in the Senate who signed. That was enough to guarantee that they'd never go into a dark room and come out and say, we've got this tax increase. You have to eat it now. And we kept building on that to where after the 94 election we had 90 plus percent of all the Republicans and majorities in the House and the Senate. This pledge, I mean politicians all the time stand up and say, I promise not to raise taxes or I promise to do this, that or the other thing. And those promises have no teeth. But the pledge seems to carry more weight than the other. Anything that I give is comparable. Sure, there's a reason. One, it is one issue, one sentence. No net tax increase. And second, it's in writing. And third, it's without context. The reason why politicians can lie so easily is that they're not completely lying. Taxes are the last thing we need to do. This is not the time to raise taxes. I think we should cut spending rather than raise taxes. None of those people promise not to raise taxes. You heard them and you thought they weren't going to raise your taxes. What they were telling you is how pained they would be when they raised your taxes. That they wouldn't do it now. But now is okay. Well, I said then was not the time. But now is the time. So the pledge, somebody in a speech says, I don't want to raise taxes, but five paragraphs before they said I really cherish education. The guy will come back and say, did you not read the whole speech in context? I was clearly going to spend through my nose. And you should have seen that coming. The pledge is not attached to anything. It's disembodied. It is one sentence. It doesn't go away at the time we faxed it to people. And now it goes online. And people can get copies of it, the press. People would sign the big pledge. You take pictures. You hand copies of the signed pledge out. There's a way of saying, you know, this commitment doesn't disappear. There's no qualifier. There's no weasel word. Other people have like 25 question, 25 part questions or statements or yes, no things that they want on so many different issues. And there are weasel words in there. We can't, I won't do too little. Unless necessary. What does that mean? So the reason it's so stark. It's also so moderate. There's no tax increase. People would come for years. We weren't budding up against the need, quote unquote, the demand for tax increase. And so people say you should change the pledge to be a cut, 10%. Well, if you move it around over time, it loses its power. So when the politicians came up against it in 2010, 2011, and it held, saved us $1.4 trillion, that's what the Obama people wanted as part of their tax deal and what some people would have given them. But because we had the pledge, it protected. It also means you can't get enough Republicans to break with everybody else when so many have signed the pledge. Because one guy might want to break. And we did have some unexpected people wanted to break. Cobra, who's very good on spending, not so good on taxes. But every time he'd run out, he was in fact all by himself and had to come back. And so while people would have impure thoughts from time to time, nobody pulled the trigger on it. Doesn't something like the pledge, though, contribute to the problems in Washington if you're tying the hands of these politicians? Like there may be emergency situations or instances where we just have to raise taxes and suddenly you've got all these people who want a piece of paper that has teeth are terrified to make those necessary compromises. Well, I had a friend, a leftist friend who, when I told him I was doing this episode, he said, you should ask Rover. Would he relinquish the pledge in an asteroid situation? Basically the movie Armageddon. Because he thinks that we're probably just a driver of one over the cliff. Yeah, an asteroid's coming for the planet. Raising taxes would help. I was going to kick out his ear. There's been a flood. Everyone in town is poorer. We must now raise taxes. Not to raise taxes if everybody in town is now worse off. It's a very good question and the power of the pledge comes from the fact that the pledge is so simple. It's easy to understand and it's actually two parts. The first part is stated and the second part isn't. The first part is I won't raise taxes. The second part is when there's a problem, I will reform government to cost less. I will prioritize. I will govern. I will make decisions. We will spend more on this and less on that because we have this new situation. Without the pledge, what politicians do is they simply paper over all existing problems with additional revenue and if they want to do something new, they don't stop doing anything old or dysfunctional or counterproductive. They just add the other on and you just collect barnacles on the ship and taxes are what you do instead of governing. So the commitment not to raise taxes is a commitment to govern. The pledge drives the Paul Ryan budget reform. The pledge drives the sequester that caps government spending for the next decade and without the pledge wouldn't have that. So don't raise taxes, drives limit spending, drives reform government to cost less. And saying you raise taxes is simply saying I won't reform government. Someone on the left would definitely say that that's all well and good but the pledge is actually just an unwillingness to compromise and an unwillingness to compromise is an unwillingness to govern with the other side. So that's why Republican obstinacy is such a problem and it's the reason that our political system is stuck in the mud. It says the party that won't agree to anything without a tax increase. No, they're just wrong. People who tell you that they look, they wish for, they long for the good old days of bipartisan compromise are telling you how old they are because many years ago the two parties didn't mean anything at all. They're just a northern party and a southern party and the fact that somebody was a Republican meant they were born north of the Mason-Dixon line and they didn't know anything else about them. They might want bigger government, smaller government, you didn't know but they were born north of the Mason-Dixon line and everybody in the... in Dixie was a Democrat even though they may be conservative on some issues as opposed to left or liberal. During Reagan's lifetime the two parties separated themselves out. One wants to be left alone in the key zones. One is a takings coalition. They've used the proper role the government is taking things from some people to others. And so instead of the old compromise which was Nixon wanted the government to get bigger Ted Kennedy wanted the government to get much bigger, very easy to compromise between bigger and much bigger, sort of bigger and you do that every year and the government over time gets quite large because you're compromising over the speed of moving in one direction. We now have two parties, one of which actually wants smaller government and one of which clearly wants larger government. Somebody wants to go west, somebody wants to go east. What in the heck would a compromise look like? There doesn't make any sense. And raising taxes is not compromising. It's losing. You say that the pledge so that the no raising taxes part and then there's the second part which is you've got to govern. But isn't the pledge really just incentivizing getting politicians to sure not raise taxes but instead just drive up deficits? Because it's not committing them to… It's not a spending. It's not a spending pledge. And so we get Republicans passing programs that are going to cost more but then not paying for it. And so, I mean, are deficits worse better than taxes? Well, you get the deficits. Taxes drive to the point, to the breaking point. All taxes are raised to the breaking point, to the point where politicians' careers are broken. Then they pull back. And the deficit, the debt is driven to the breaking point, to the point where people lose elections over it. And so it's not as if raising taxes is instead of deficit spending when Clinton raised taxes in 93 with only Democrat votes because we had everybody taking the pledge on the Republican side or almost everybody and not a single Republican voted for his tax increase. The projected deficits under Clinton were $200 billion all the way through because they decided $200 billion is what they could survive politically. They raised taxes and then added the $200 billion and that was the budget path. Now, because they lost the House and Senate in 2004 and they couldn't do the spending they planned to, we actually ended up in balance. But that was not their plan. It wasn't that the revenue came in and balanced the budget. It was that spending was arched down because the spending they planned, they weren't allowed. So no, the Democrats spend as much as they can get away with including a certain amount that they think they can get away with for deficit. The establishment press screams when they think the deficit is caused by a tax cut and there is complete silence. I mean, how often have you heard Tom Brokaw talk about Obama's deficits? Never. It's not a discussion point. And when I was at college, I was told that all this talk about 74-70 and all this talk about deficits was a dirty trick by Republicans to stop deficit spending, which was a good thing. And so deficits was a dirty trick to talk about deficits. When deficits could be used as a weapon against tax cuts, then all of a sudden deficits became a big interest. Then when the Democrats under Clinton wanted to spend deficits ceased to exist as an issue, it's what they used to try and stop lower taxes and they never used it to stop spending. With the pledge, you've been called the most powerful man in Washington. You've been called many worse things by many people. Yeah, that's a tough one to let. Stop being mean to me. But does it ever surprise you that how well it's worked and the kind of compliance rates? What are those compliance rates? How many people break the pledge in a given Congress? George Herbert Walker Bush. He took the sins of the world on himself so nobody else would have to do that. And then we march them off into the wilderness like a good scapegoat. Yes, exactly. That's what happened. Nobody's life is a complete waste. Some people serve as bad examples. And children, look at that. Don't do that. I remember my parents pointing out a street person years ago. Don't do that, kids. Don't grow up and do that. And they did the same thing with Bush. Don't grow up in just taxes. This is bad. When Bush raised taxes in 1990, he won the primary because he signed the pledge and Dole didn't. That's why he beat him in New Hampshire. He won the general because he said, read my lips and under taxes. He was 14 points down when he said that. He was losing to Mike Dukakis and they said, I'm Ronald Reagan. I won't raise your taxes. People said, oh, we thought you were George Bush. Okay, we'll vote for you. And he won because he was the guy who would not raise taxes. He was going to govern his Reagan's third term. But he didn't. He raised taxes in 90 because his advisors, who were the smartest guys in the world, they tell me, said, you're a lot to lie to the American people. They don't know. You don't know them anything. And he bought it. And he treated the people the way French kings would treat peasants. The nerve of these people that asked me. And Bush said that. He was on one of the cover of Parade Magazine. He and his wife had this feature. And where they're supposed to be talking about life and retirement, he sort of lashes out at me. Who is Grover Norquist? I don't know what he's talking about. She's Louise. He keeps bringing up his self-defeating. Mistake. He had a very successful presidency. If you look at managing the collapse of the Soviet Union, that blood on the floor. A lot of people thought the Soviet Union might go down, but there'd be an awful lot of blood on the floor. He drove Iraq out of Kuwait and didn't get stuck occupying the place for a decade. A lot of wisdom, a lot of common sense. He would have won, except for one problem. He raised taxes. He broke his word. And all the Republicans watched that and said, I get it, take the pledge win the primary, take the pledge win the general, break the pledge, lose. So keep the pledge and win. We've had almost nobody at the federal level, at the federal, after Bush. After Bush, everyone said don't do that. And again, this is the guy who was up at 90% during the Iraq war. And people said he was in fine shape. And I said, no, when that calms down and people focus on the tax thing, he's still in trouble. Anyone? So it's been 25 years since a federal Republican... Yeah, there's some guys at the state level who break the pledge. And former governor of Pennsylvania signed the pledge, broke it, and didn't get reelected. So there's some locals. Sometimes you have to relearn these things. Some states are slower than others. Does it ever surprise you, the way people talk about it too when they say, well Grover, release me from the pledge or Grover's holding my feet to the fire. I'm glad that you're a listenership. Well, they should write this down. The pledge, if you read it, is not to me. It doesn't say, oh, I pledged a Grover norquist. It is to the American people. It is to the people of my state and the American people that I will vote against and oppose all efforts to raise taxes or if you're running for president, I'll oppose in veto any effort to raise taxes. So the pledge is to the American people, which is what I mean. The idea that somebody could, it's like that scene towards the end of the Godfather part one, you know, could you get me off the hook for all time's sake? Sorry, I can't. I have to say to these guys, hey, you didn't promise me anything. You promised the voters. You go tell them that you lied to them. Don't come and ask, you know, tell me and like ask for pardon or something. I did get repeatedly asked to be the most powerful man in the United States by 60 minutes when they did a six hour interview to get about six minutes of airtime. You know, were they looking at your pores? Yeah, yeah. Because they kept asking the same questions and I kept giving them my answer, not the answer they were hoping to write. They wanted you to cackle and say, I am the most powerful man in America. Yes, yes, yes. And then they beat me senseless for the next 12 minutes of the show. And my answer was is the tax issue is the most powerful issue in American history. Go back to the founding of the country. The country almost split my book and the IRS before it ends us is all about the history of taxation and how it shaped the country. Everyone thought the country was going to split everything west of the Alleghenies and the Alleghenies would go to Spain or France or Britain or independent and we'd only end up with a short line and that was exacerbated by the whiskey tax. One of the great moments in American history, yes. Yes, whiskey or valiant. The excise taxes that they put on, then the excise taxes faded because that's how come Jefferson and the Democrats, Republicans won for 24 years. They said they'd repeal the tax and they did it. Jefferson's advisors told him you don't really have to repeal that, you know, now that you won. Luckily for him and the country... There was no Grover. He said, no, I think I really do have to do this. We weren't lying at the time. But then the country almost split north-south in 1830. South Carolina called out the militia in 1830-31. What they went to nullify was the tariff. Then there was a big part of the civil war that was the tariff. If there had never been any slavery, we would have still had the civil war. It just would have been over the tariffs and such as slavery and tariffs. So it's been a huge part of American history. It's a very powerful issue and what Americans for tax reforms, Taxpayer Protection Pledge does is it clarifies where people stand. You've signed the pledge or you haven't. Very binary. There aren't grays. And politicians come to me and say, well, I've never raised taxes. I said, my neighbor came and said, I've never eaten your cat, but I won't put in writing that I won't. I would keep the cat inside. Now the book, as you mentioned, is called in the IRS before it ends us. Is that a title too hyperbolic? It is not. It wasn't my choice, but I didn't, the publisher liked it. I like it now. I think it's not too hyperbolic. There are two ways in which you mean get rid of the IRS. The first is the way that Bill Clinton said get rid of welfare as we know it. Get rid of the IRS that's political, that is corrupt, that targets people that they don't like, that has, you know, six, you know, the amount of time and effort that people have to put into it, the number of pages in the code, it's much too complicated, it's much too crazy. No one can fully understand it or even comply and not break the rule somehow, not meaning to. And you've seen the ones, they ask ten different people to do the same tax reform, tax payment, and they get ten different answers from experts. And nine of those guys the government could decide should go to jail because they tried to cheat you. So I think that ending the IRS as we know it, even if you kept the income tax is a necessary step. That's not sufficient. You wouldn't want a pleasant structure that still took 20% of GDP and disincentivized work saving and investment. Can we do without the income tax, federal income tax? Well, the first answer is we did until 1913. So obviously you can. There are nine states that don't have income taxes. Ever have? Alaska had it and then they didn't. But nine states that don't have income taxes. As we get more and more states deciding to shed the income tax, Kansas is on track to do that, North Carolina, Mississippi has been taking votes to put themselves on that track, Arizona and Maine. These states are all saying our goal is zero. We have a campaign 50 in 2050 which is to have 50 states without a state income tax by 2050. And I don't expect to do any campaigning in New York or California or Illinois. I expect to win all the states around them and drain the swamp of talent, youth and resources and jobs and California will get the joke or they won't. That's like another gorilla action. It is. It is. We will take the countryside and surround the cities and starve them out for capital people and young people. So I think there's some real... The answer is yes. I think we can get there. But it does take a very serious focus on reducing the size and scope of government on reforming all our pensions to make them define contribution rather than define benefit to take all of the welfare structures and block grant them to the states. We have the 57 states compete on how to provide these programs and to get costs down. So I think that we can get there. The first part should be done in the next few years. The second part will take decades. You said 57 states in all the territories in D.C. No, I'm making fun of the president. Oh, okay. Did he say that? Yes. Oh, okay. We missed the joke. He had talked about visiting all 57 states during the campaign. What is the appropriate... If Quarell had said that... You would never have it memorized. What is the appropriate amount of taxes? Lower, less. Okay. Samuel Gompers, whose statue is like across the street, and I keep waiting for you guys to put a mustache on or something. Samuel Gompers, labor leader in the 1870s, 1880s, who hated Chinese and Japanese people, but otherwise was an interesting character. He went and asked, what are working people when he said more? I mean, there isn't some number. What do we want? We want government to cost less. We want it to be more efficient, more effective, and less intrusive in people's lives. So 20% of GDP spent by the federal government is too high. 10% strikes me as probably still too high. But when we get to 10%, we'll have a conversation with the nation. And if everyone says this is swell, I'll retire and write murder mysteries. But my guess is we'll keep going to 987 and see how far we'll get. Now, at what point can you drown it in a bathtub? That quote, it's amazing. That surprise you watched that quote that followed you around. Well, it is. It's because the original quote, the full quote is, my goal, this comes to what do you want? My goal is to reduce the size and scope of government as a percentage of the economy in half over 25 years. And then in the next 25 years to drop it in half again. And then I think the question was, do you keep going? I'd say, well, ultimately you want to reduce the government down to the size where you could drag it into the bathroom and drown it in the bathtub. So that's the exaggeration. But the first two are, I believe, exactly what we can do, what we should do, take government from 20% of GDP down to 10 and then from 10 to 5. You know, as the economy grows, it's not the government doesn't have to get teeny, but just teeny smaller compared to the rest of our resources. What's the path to getting there? Because on the one hand, getting Americans to get upset at politicians who raise their taxes from whatever they happen to be now is, I mean, people don't want to pay more than they are and everyone would like to pay less. But as you mentioned, getting, I mean, really dramatically reducing the size of government's going to involve doing away with pension programs and replacing them with, you know, savings. And at some point, you know, people love to pay less, but then they're not so willing to give up the things that they have. I mean, you start running into American voter constituencies that are benefiting from this stuff. Yeah, I think it's overstated the actual desire that people have for bigger government. Half of the federal government, federal government is 20% of the economy, half, 10% of the economy, was enacted in two-year periods. So four years of American history created half of our federal government, 34 to 36 New Deal and 64 to 66 Medicare, Medicaid, Social Security, food stamps. So there were some seeds planted in those four years. And it happened when you had several landslides in a row for the Democrats. They had supermajorities. They could do everything they wanted and they put in seeds that over time grew and it was never easy enough to cut down the tree or prune it back as it just kept growing. What the Ryan Budget Plan does, Paul Ryan's Budget Plan, I write about that in the book, is that it makes all these reforms now, but they're all ones that over time bend down the cost curve of government to where instead of 30, 40 years now costing 40% of GDP, it takes it from 20 back to 20. And that's assuming no economic growth from better policies. I think it does much better than that. But at a minimum it cuts government in half over the next 30, 40 years from where it would otherwise be. And that you do by reforming government, not cutting it, if you want to cut something 10% like chopping somebody's head off, it's scary. But if you say we're going to lose weight and you do it over time, that's a lot easier to deal with. You do it all at once, chopping somebody's arm off is scary, but allowing somebody to lose weight over time is not scary. And it's healthy. So this is where I think we're in a position to and you need to get 51 votes in the Senate, a majority in the House, which is four times voted for the Paul Ryan's plan and a Republican president with enough digits to sign the bill. And then that puts you on a U-turn from our present road to serfdom. I mean presently we're going to Haiti's not as quick as we were three years ago, heading in the wrong direction. We're going to end up like France and no one will bathe or anything. So we need to fix this. Is that going to be too much of a bitter pill though because dovetailing off of Varen's question, would those kind of cuts, it would hurt some people at some point? And would that mean that if you actually signed that plan, if you were president who signed that plan, you would probably lose the next election? Well, the president of the United States just signed a bill which in that present value drops federal spending by $3 trillion. That was the doc fix bill. In the first 10 years, the government spends $100 billion more than it did and that's what they focused on. Politicians like street criminals have short-time horizons. I would smash the window. I would steal the watch. I would go to jail. Damn, I didn't think this all the way through. Politicians, if you say shiny thing here and all you have to do is bend the cost curve on some of these Medicare payments down. I've cut them in half. I just bend the cost curve down to where over the next 75 years the net present value is $3 trillion. Over time, it's a lot more than that. And that's what the deal will be. Here is something today to make you happy. The price of that and what you get is not a tax increase but a one-time spending deal. Then in the future, you alter the cost curve on entitlements and you can drop trillions in real time. So could a Republican president do that? Well, a Democrat president just did. $3 trillion, not bad. Doesn't that commit us to trusting them in the future, though? No, it doesn't because this is a law in the same way that Social Security, Medicare and Medicaid grew. There was just a law. Nobody went in and said, now we will add to this, now we will add to this. On a regular basis, it just grew over time because of the way it was designed. And so those reforms, if you move from a benefit to a defined contribution, tremendous savings, but nobody has to touch it again. It just happens in the structure. If you're saying, oh, 50 years from now, the appropriators promised to behave, no, that I would not trust. Now, you mentioned the tax revolts, which is a big part, the first part of your book. And in the stats you have here, we don't have income tax until 1913. The top rate then was 7% on people who earned $500,000 or more, which would be $11.5 million in paid numbers. Yes. Only 4% of Americans even paid income tax at all. Now about half of American families pay income tax, and the bottom rate is 10%, which is higher than the top rate in 1913. Do you think that Americans have become a little bit too, given our anti-tax roots, have we become too complacent about this level of taxation we're experiencing? Oh yes, absolutely. But when you remind people of how much they're paying, we finally defeated the Spanish-American war tax, which is a 3% federal excise tax on long distance phone calls. I have a question about that. That story is amazing with itself. Simply by focusing on it. Look at this. This is a hidden tax. They think you're an idiot. You're still paying for the Spanish-American. People were then outraged about a tax. They couldn't have told you they were paying because it was hidden in their phone bill. So when you highlight the cost of something, people will react. And we can get people to change their mind about whether or not they're willing to tolerate something. You described that Spanish-American war tax with just a funny sentence by itself. Remember the tax. We can describe it as the perfect tax because it has all these elements to it. It persisted for it. It doesn't really exist anymore. It's mostly gone. It's not completely gone. It's mostly gone. But how did it come about in the original? What was the idea? Sure. 1898, when Spain so violently attacked us and we had to defend ourselves, we needed to... And take over Guam and the Philippines and Saipan. Yes. Serve them right. They put in a tax. A tax on long-distance phone calls charged by time and distance. At the time of phone was $5,000 in today's dollars. Very few people had phones. Very few people made long-distance phone calls. So it's a tax on the rich people. So of all the things politicians do to trick you into agreeing to a tax increase, this nation found in a tax revolt, oh, it's only rich people. Okay. It's only temporary because we're having a war with Spain. Well, last forever, right? Falling apart as it is. Okay. It's patriotic. It's a war. Henry James, the only taxes people like to pay are war taxes. That's why everything needed to be the moral equivalent of war in order to trick you into having higher taxes. The energy crisis, moral equivalent of war. Jimmy Carter. He had read his Henry James. And so all of this stuff, it was hidden in the bottom of your phone bill. So all of these things combined to make it really the perfect tax. It lasted more than 100 years. It then became a tax on everybody because 98, 99% of Americans have phones and only really rich people can afford not to have a phone. So we went from a tax on the rich to a tax on average people. Came out at 3%. And we eventually got it mostly killed by focusing on it. But Clinton at one point did veto. He did. We had it all gone. And Clinton vetoed it. It was part of another package of things. And Clinton was the keeper of the Spanish-American war tax. Yeah. And you also would write about more about just the relation between war and taxation in general. Yeah. There's a long chapter. I mean, every time they have a war, the war ends and the taxes don't. The only war that really closed down all the taxes at the end of the war was the War of 1812. How those were the days? All the others. Not only the taxes stayed, but the level of spending stayed up more than before the war. Civil war. Government was sort of permanently made larger. And you saw this again with the First World War and the Second World War. Government kept getting bigger. Now, we used to spend 10% of national spending on Pentagon in the 60s. And now it's down to about 3%, 4%. But government's as big as it was because that money was just absorbed by other parts of the government. So our friends on the left, they like wars because it means more money for the government. And they're willing to wait to get their piece of it to laugh at the war ends, which may be why they run anti-war campaigns. And the war quickly and keep the taxes. But they do. And there's some of the books that I'd looked at researching this. I'm reading these left-wing books and they're so excited about all the taxes that the war has. But you were against that war. World War I was, of course. And Vietnam. But they love the taxes. What's wrong with seeing a silver lining? That's right. In other people's deaths and misery. But yes, war is the health of the state. And it is how you grow the government and then it doesn't snap back. One of the things, the one I can think of at present, that George W. Bush did right, was he kept all the spending in Iraq and Afghanistan in a separate overseas contingency thing. So there's this emergency bill they had to pass. And the first couple of times it happened, I said, wait a minute. Who are you trying to fool? What do you mean there's an emergency? You got 100,000 guys over there. You didn't know. Why don't you put it in the budget? And some smart person said, Grover, come here. We're not putting it in the budget because if you put it in the budget, when the war ends, it all goes over into other spending and it gets absorbed. Whereas this way, what it ends, it's not in the baseline. And the first victory we had over Obama was when we faced him off in 2011, we took the trillion dollars he was planning on spending over the next decade. As soon as Iraq and Afghanistan ended, he was putting that all into the baseline to spend on other stuff. And that's what we took away first. That was the easy way of doing it. For those who don't, this is an important point a lot of listeners may not understand baseline budgeting and what this sort of ledger domain is when they voice these things on it. Can you explain how that works? Sure. When they say the government spent more or spent less, they mean compared to what? Compared to plans. And under Bush, they were spending $100 billion a year on Afghanistan. So a trillion dollars over a decade. To end the war would mean that that $100 billion every year was now, if you had it in the baseline budget, it's now part of the budget. But we don't need it for the wars, so everybody will grab it and take it for other parts. But if it's not in the baseline budget, if it's off in some separate budget, when it ends, nobody gets any more money. And that's how you can say that too. So when they say you're cutting government over time, even though it's still growing, but at a lower rate or growing higher rate. It's cutting from their plans, from their hopes, from their expectations, from their desires. I wanted two ice cream cones. I got one. I was cut. I was planning on having seven ice cream cones in the future. Now you lowered it to six. That's right. And so now you've been at a cut. Even though I only have five now. Yeah, exactly. We have no idea how to produce the sixth one. Yes. Let me ask a question. Similar lines of the ways of Washington are a mystery to people outside the bow way. When you say things like... They're a mystery to me inside the bow way. You know, this is... We had this victory. We, being American tax reform, had this victory against Obama. What does that mean? Like, what are you doing on a day-to-day basis to achieve these victories? Yeah, other than wearing your hood and having your secret meetings with your candles and your cackling and all that stuff. That's the important part of your job. The incantations. Yes, exactly. We work to build a broad coalition opposing tax increases to start with. So it is a guardrail that you can't get past. And it's terribly reasonable because on this side of the guardrail, you can do anything you want. It doesn't violate the pledge. But with the guardrail, we were able to stop Obama's plans for additional spending and taxes. And the Republicans held, the Republican leadership held and said, we need $2.5 trillion in spending cuts, not tax increases, spending cuts. And Obama, for the longest time, would hear a deficit reduction when we were talking about spending reduction. And this is so important for conservatives, Republicans, libertarians, limited government people. We should always focus on spending and never on the deficit because there are two ways to fix the deficit. Spend less. Oh, that's boring. Washington Post is not interested. Or raise taxes. Oh, that's endlessly fascinating. And so if the problem is the deficit, the Democrats have a solution that is technically every bit as good as the Republican solution, which is raise taxes. But if the problem is too much spending, there are only two ways to fix it. Cut spending, which the left doesn't have an interest in. Or grow the economy so that the same size government becomes a smaller part of it, a smaller problem. And free market economists, free market advocates have lots of ways to make the economy grow more. The friends on the left have no idea how to make the government grow more. They can't, you know, they stick the trial lawyers on it, like leeches. They stick the labor unions on it. They tax it. They regulate. They spend it. And the thing's just bleeding all over from leeches. And it doesn't get healthy. It doesn't get better. They don't have any plans to make the government grow faster. The economy or the government? I'm sorry, the economy. The economy or the economy. There are plenty of reasons and arguments for making the government to get bigger, which doesn't help the economy grow. So I think it's very, very helpful and important to focus on total government spending and the percentage of the economy. Grow the economy. That's good. Reduce the size of the government. That's good. If you focus on the deficit, you don't get either of those. Now, you have some interesting... There's a lot of... It's not just complaints in your book. You have a lot of proposals for actually helping some of these. Oh, yeah. No whining in there. No whining. One of the more interesting ones for spending that you mentioned is your idea for the sort of spending-brack type of thing, which I've actually thought about before, because sometimes Congress, it's kind of like an alcoholic and you got to take away the liquor and put it on the shelf and don't even let us... Don't even give it to me if I ask type of thing. So what was BRAC and how would that kind of work? BRAC, base realignment and closure, was how we began to reduce the number of unnecessary military bases. Dick Armey and a Republican, a conservative Republican from Texas and a sharp liberal Democrat from Indiana together came up with this idea that the Pentagon would come up with a list of bases they didn't particularly want anymore. There were many. And then you'd have this bipartisan group that would look at them and choose some of them. And then unless Congress voted no, that list would be closed down or reorganized. You could move half of the guys somewhere. And this allowed everybody to vote for creating the BRAC so that it would happen. And then when their state or city was going to lose the military base that nobody needed, but they thought it was nice to have the federal money flowing in, they could vote against it, but it didn't get you the two-thirds to defeat it, and therefore it happened. So we got to vote yes or no. We needed to yet cover and the right thing happened. You could do that with the number of post offices. There are many more post offices than necessary in the United States. I mean, more than one is more than necessary. You can take that as far as one wants to go, but there are a lot of government programs that you could prune back this way. I think we should do the same thing with federal laws. There are 4,000 federal laws that could send you to prison. Do you really need 4,000? There used to be 39, I think, when they started the country off. And I don't know at all, 39, where no trek could remember them. Piracy was one of them. Yes, I certainly can't remember the 4,000. So I think it's extremely helpful to come up with ideas. You set up a BRAC and then, unless Congress acts, these things fade. You also the anti-appropriations committee. I love this because it's real. There was actually something called the BIRD Committee, which is named after Harry Bird, fiscal conservative sort of out of Virginia. And he wanted to fund World War II by cutting other spending. And he set up a committee called the BIRD Committee. I called the anti-appropriations committee. This group could only recommend cutting the budget. So they write bills and they hand it to the House and Senate. And sometimes they pass them. That's how we got rid of the Civilian Conservation Corps. That's how we got rid of the work projects of the administration. These things would still be with us. I mean, Civilian Conservation Corps over 50, 60, 70 years would have morphed into national service if it hadn't been shut down to take that money and pay for World War II. I am hopeful that we will get this bill. We started up in the next year that we can pass it in the next two or three years. And then people like Jeff Flake of Alabama and Massey and Justin Amash could fight to get on the committee to unspend. That could be a great campaigning thing at this point. You could have press conferences. You could get attention to yourself. You would have actual deliverables. Here is what I saved you. This is the bill I wrote. We cut this budget in half or in 10%. And what they did with the BIRD Committee they cut something in a quarter, then a half, and then they'd get rid of it. Drown in the bathtub. Yes, exactly. So I think there's some real opportunities there. And the book has a series of a couple dozen solutions to different things. Why the focus exclusively on taxes? I mean, government does lots of really awful things to us and restricts the way we can live in all sorts of ways and taking money out of our pockets certainly not all of it. Taking money out of people's pockets enables the government to do everything else because it has that money it can also do other stuff. Because it has that control over your life it can control other things. So I think it's the pressure point that you start taking away their power. You're right. When you don't let them tax and you don't let them spend they will regulate. But water always tries to find a way around a dam. Power always tries to find a way around restrictions on power. And that shouldn't surprise you. You just go, okay, we're going to ask once we've stopped the tax increases, once we've limited spending we are going to have to deal with judiciary, judicial power, and executive orders, that sort of thing. That's not a problem but it's one you anticipate you just have to live with. So we have two, there are two proposals you talk about by IRS, you bring up fair tax and flat tax. Fair tax, what is the fair tax? It's one proposal for kind of... Sure, fair tax is a retail sales tax. The idea that you get rid of the income tax abolish the 16th amendment and you have a that or a sales tax that is collected not from you but from the store you buy something when you buy a hamburger shirt. Now both... And the flat tax is you take the present income tax you have a single rate and you broaden it out and you have very low rates compared to what we have today. Simpler. And I think they're both an improvement over what we have. They both bring you to taxing consumed income one time at one rate. So an economist would look at the two and say they're the same darn thing. Why are you asking me to pick between them? People look at them differently. I won't have to do the tax as some business guy will. Since more and more people are going to be self-employed and we're going to have hundreds of thousands of Uber drivers who pay their own taxes instead of a few thousand taxicab, unionized taxicab guys who the company fills out your tax form. We're moving to a world with more independent contractors and fewer employees. So I'm not sure how much it buys you to... Do you think that will create a more of a movement to simplify the tax code, possibly, because people will be doing their own taxes and the withholding will not be... If they're an independent contractor and they don't have withholding and then you write a check to the government... They notice the taxes more. Yes, that would have an impact and I think it is having an impact to Uber, Uber, Lyft, Airbnb, more and more people. The number of people... And it's great because the journalists these days have several jobs because one company can't hire somebody necessarily. People have several jobs and they're independent contractors. And once they get it, it's easier for them to write about it intelligently. So the Tea Party seemed to have changed things. Would you agree? Do you think it's a different era now? Oh, absolutely. This idea where people whine like the Tea Party completely disappeared, they're wrong. They went to Congress. It changed the world. It changed the direction and trajectory of the modern Republican Party. We were the party that... The Republican Party's party would not raise your taxes. Now, they invade small countries that can't pronounce, but they wouldn't raise your taxes. That was the good selling point and what won a lot of elections, won the House for them. But as Bush showed us, Bush, George W. Bush, he never had a focus on limiting spending. It was just never on the list of things to do. You'd go talk to their guys and when you had an idea to spend less, they'd sort of look at you blankly like you were... What are you talking about? It wasn't on their to-do list. Oh, I mean, they probably defended by that, but they never brought it up. They never pushed it. It wasn't what they did. And every time there was a crisis, they answered the crisis was more government. So it's not like they had a bunch of small government plans and whenever there's a crisis, like Rahm Emanuel said, oh, here's my solution written 10 years ago, but this is applicable to this crisis. Let's have limited government. That is what you should be doing. That is what competent governors do. But Bush didn't. And so there was a frustration by average people who were otherwise well-disposed towards Bush and the Republicans about spending. And Obama came in and really went crazy on the spending and people said, okay, this is it. This is scary. I had thought that you could never get the American people to rise up and revolt against spending too much. That they would be... You'd have to wait until spend too much turned into tax increase. Then the Pitchforks would come out and everybody would go crazy. People in the 70s in California didn't have a revolution. It wasn't until all of that spending upward drift turned into tax increases on your home, then people said, now we've had it with you. Well, where were we in the last 10 years when this was coming? As clear as day, this was coming. I didn't see it. Because of the speed with which Obama raised spending, the aggressive nature of it, the understanding that there was nothing in Washington that could stop them from doing anything because they had 60... The lack of any votes on Republican sides. FM, as Rahm Emanuel said. Yeah. Every Republican voted against Obamacare period. And the D's still had... They could just pass it. So the people had it scared. And you had a very strong reaction on spending. And so the people got elected in 2010, which was dozens and dozens and dozens of congressmen and senators, all came in with ringing in their ear, stop spending, stop earmark, stop spending, no tarp, no bailouts. Change is the nature of who you are. You come into office. You learn what the people want. And there are people who 30 years later were voting as if the Great Depression was still on in the 60s, from the 30s. And those guys coming in are going to be focused on spending as long as they stay in Washington, D.C. So the Tea Party changed the direction of the modern Republican Party to be not just the party that won't raise your taxes, but the party that fights spending. And that's a big deal. So is tax reform urgent? And I guess the last question would be, are you optimistic? I'm optimistic long term. Nothing terribly interesting happens until Obama moves on, because he'll veto anything too good, although he just signed a $3 trillion net present value cut in spending. So I'm open to possible deals. He's supporting a trade agreement, which he would never have done in the first six years of his presidency. So there may be some opportunities to pop up, but we should just be ready. And so there are people planning tax reform packages. And Casey wakes up one morning and says, I need a legacy. Let's do lower marginal tax rates. I'm not counting on it. I don't think that's the way to bet, but why not be ready? But overall, in the longer term, you're optimistic. Things are going in the right direction. We finally have federalism working in a way that's going to help drive the country in the right direction as people are leaving high-tax states and big-tax spending states and moving to low-tax states. The electoral college is collapsing into the red states. Thank you for listening. If you have any questions, you can find us on Twitter at Free Thoughts Pod. That's Free Thoughts POD. Free Thoughts is produced by Evan Banks and Mark McDaniel. To learn more, find us on the web at www.libertarianism.org.