Grover Norquist, president of Americans for Tax Reform, joined Seth Leibsohn earlier this week to discuss businesses giving bonuses to employees and charities thanks to President Donald Trump’s recently enacted tax reform. Listen to the audio and read the transcript.
Seth Leibsohn: Welcome back. Monday, January 8th, 2017. This is the Seth and Chris Show. I’m Seth Leibsohn. He is Chris Buskirk. One of the great people of Washington, one of D.C., one of the great people of the Beltway that keeps the government honest and keeps us informed, someone I have known for, oh, probably more than 20 years now, is Grover Norquist. He is the president of Americans for Tax Reform. You want to know about tax policy? You want to know about economic policy? Go to atr.org. Americans for Tax Reform. It’s a delight to welcome him back to the airwaves of Phoenix. Grover, happy New Year and thanks for joining us.
Grover Norquist: Absolutely. Good to be with you, Seth, Chris.
Seth Leibsohn: Thank you very much. Grover, one of the things that we wanted to talk to you about today is a great ticker you put over at ATR showing how the tax reform we just went through is already having, not an effect, but a huge effect. Over a million Americans already receiving tax reform bonuses, which we should probably call “Trump tax reform” bonuses. Tell us about this.
Grover Norquist: Sure. Interestingly, when the Left attacked the idea of tax reform and tax reduction, they made a series of hysterical comments that no middle-class person would see any benefit, it would all go to big corporations and they’d bury it in the ground, or the big rich people. They were so over the top in their hysterics. And the answer is, this is so important, so helpful to middle-income people. So important to lower income people who have been damaged by the Obamacare taxes, not Obamacare itself, but the taxes to pay for Obamacare, that they feared it happening so they said anything and everything, hoping to stop it the way they stopped the dismantling of much of Obamacare in the spring, they hope to kill tax reform as well. They thought they were going to get there, so they said hysterical things that they knew weren’t true, and now they’ve got to live between now and November with the reality of what the tax reduction tax reform does.
One piece of this is that now over one million Americans have been told by their employers that they’re going to get a bonus because of the tax cut. Yeah, people get bonuses all the time, but what we’ve got at Americans for Tax Reform, and our website is atr.org, and right up top, what you see is a list of more than 100 companies, and we keep adding to it every day. John Kartch, who works with me at Americans for Tax Reform, is the guy who’s putting this together. Anybody in your listening audience who either is an employee knows that their company is doing a bonus or a pay increase or raising wages as a result of tax reform, or an employer who’s doing this. Doesn’t have to be AT&T. I mean, they’re doing it with 200,000 employees. That’s pretty cool, okay?
Seth Leibsohn: And they’re not small bonuses, I mean take AT&T; $1,000 bonuses. Other companies are doing much the same and these are not inconsequential dollars.
Grover Norquist: Absolutely. Some are doing straight bonuses, some are increasing the match for your 401k, which is a bonus too, just one that is going to grow tax-free over the years and will be quite something when you retire. There’s a list; AT&T, $1,000 bonus to [inaudible], the company, 2,000 employees. AccuWeather is doing year-end bonuses. They got about $450.
Seth Leibsohn: And a lot of them are giving a lot more money to charity, too. I saw Boeing is giving 100 million bucks in charitable donations. I mean, talk about spreading the wealth.
Grover Norquist: Those are charities that their employees are designating. You’re seeing charitable contributions, you’re seeing 401k contributions, you’re seeing direct payments, some companies have raised their pay across the board. American Airlines just did $1,000 bonuses for every employee excluding officers, and that’s going to be $130 million.
Seth Leibsohn: And we know, by the way, do we know Grover that these, contrary to what a lot of naysayers like to say about these things, “oh, these things would have happened anyway.” No, they would not have.
Grover Norquist: Again, we’re only counting on this list, pay increases, bonuses, that were announced, where the company itself said: “we’re doing this because of the tax cut tax reform.”
Seth Leibsohn: Right, they actually say this in their press releases. I could read a sample one: First Financial, just to pick one that pops up. The one-time bonus comes in response to the signing of the U.S. Tax Cuts and Jobs Act of 2017. I mean, they’re saying it.
Chris Buskirk: What do you think they mean by that?
Seth Leibsohn: Yeah what do you think they mean by that?
Grover Norquist: What’s interesting, of course, is that people, all the time, shut down jobs or move and they forget to put out the press release, “thank you to the state of Illinois for it’s most recent tax increase. We’re going out of business. We’re leaving.” I would appreciate it, as a taxpayer activist, if businesses would be as frank and honest on the way down as they are on the way up because perhaps governors and mayors wouldn’t do the tax hikes, which kill jobs, if they knew that this would be highlighted by the businessmen and women and employees themselves.
This is a very long list. Southwest Airlines, $1,000 bonuses for 55,000 employees. Delaware Supermarkets. Just again and again and again, but there’s a new wrinkle, a new addition to this list. We’ve just recently started to get calls from talk shows, from television appearances, from tweeting this out. I tweeted out at Grover Norquist. If you want to get on the tweet you can get it from @grovernorquist or again, atr.org. It’s got the list. It will be updated every day, many times a day so you can get the latest. As you were saying, you can click through and see the actual statements by the company or the newspaper article that explains how and why and who’s getting these bonuses. Our friends on the Left announced that this would never happen.
Seth Leibsohn: Armageddon, I believe is what the former speaker of the house said.
Grover Norquist: Yes, Armageddon, end of the world. Wow. Instead, this is tangible. I do think it’s interesting that some of these rich liberals go “oh, $1,000. That’s a pittance,” which tells you a lot about their life and the contempt they have for Americans for whom $1,000 is a good chunk of money, especially when it’s unanticipated and it allows you to save for the future, to make decisions that you wouldn’t be able to make. Again, this is a piece of it.
Now add to this that you’ve seen the stock market, the Dow Jones average, go up by about a third over the last year since you were likely to get a tax cut as we got closer and closer the stock market kept going up. That means that if you have a 401k and half of Americans on a 401k or an IRA or defined contribution pension, your life savings is worth more today than a year ago. And it will be worth more a year from now than today because the tax cut reduces the penalties and the drag on new investment and economic growth. So, not only will somebody who earns $70,000 a year, a family of four roughly will see $2,000 in lower taxes each year moving forward, but you will also see your life savings increase, the value of them, as the stock market has gone up; you’ll see additional pay increases and these bonuses are a piece of that.
The modeling suggests that people could see several thousand dollars a year in higher wages; not just in lower taxes, but in higher wages, as trillions of dollars from around the globe moves to the United States. Some of it’s American money earned overseas, American companies that can now bring it back without paying a penalty; we had a stupid tax policy that did that. Some of it’s just a guy in Brazil who says “I have $1,000 to invest. Where do I invest it?” It’s the United States. We now expense new investment, which makes new investment less costly. And we have a lower tax rate at the end of the day which means when you do invest you get a bigger payout. So both on the way in and on the way out your investment is treated better in the United States than it used to be and if you’d thought about sending your money to China or Japan, on the margin, more and more people will send it to the United States.
Seth Leibsohn: We’re talking to Grover Norquist. Grover, do you have time for one more segment or have you got to run?
Grover Norquist: No, I can do that.
Seth Leibsohn: Great, because I would like to talk to you about some of the political implications as well as understanding tax policy as well, if not better, than anyone else. You understand politics as well, if not better, than anyone else as well. We’re going to go to a quick break. We’ll be right back with Grover Norquist from Americans for Tax Reform. Atr.org is his website. You can follow him on Twitter @grovernorquist. I’m Seth, he’s Chris. We’ll be right back.
Welcome back to the Seth and Chris Show. I’m Seth Leibsohn. He is Chris Buskirk. Delighted to have with us the president of Americans for Tax Reform, Grover Norquist. Go to his website if you know of a company that’s giving bonuses based on the tax reform that was just passed, the Tax Cuts and Jobs Act. Grover and his team have amassed a running list. Over one million Americans receiving tax reform bonuses. Grover, right before the break we were talking just a little bit about the political implications of this. Nancy Pelosi had said that if this tax reform passes we will see Armageddon. If this is Armageddon, more of it, but I had long thought that the Democrats would fight this bill even harder than the repeal of the Affordable Healthcare Act because my presumption was they knew that, if this passed, most Americans would be getting bigger paychecks, and that that would be deadly for them come November 2018. Or, at least, maybe Armageddon for them, come November 2018. I know it’s a bit of a ways out, but what are the political implications of this? It certainly can’t hurt the Republican brand, right?
Grover Norquist: No, it is an extremely important, helpful, law to pass for electing Republicans in 2018 and 2020. It’s why the Democrats went screaming bloody murder. Remember they thought McCain might be a “no”, they thought that senators from Maine or Alaska might be “no’s” then they had these hopes that the senator from Tennessee, who’s a fine Reagan Republican, but he had this question about deficits and they thought “well maybe he’ll vote no” and he didn’t and they were just livid, livid, livid.
The challenge is that everything they said against the tax cut isn’t true. So they now have to live with nine, ten months of pay increases, bonuses, money flowing back to the United States, and thanks to all these stupid regulations that Democrats have passed for the last 100 years, companies have to announce when they bring money back, when they make decisions regularly. So every month, every quarter you’ll be hearing about … Facebook has brought $7 billion back to the United States …
They like to say, “what if Apple brings money back from overseas and they buy their own stock?” As if that was the equivalent of burying the money under a rock and no one would see it. If Apple buys its own stock, it means that everybody in the United States who owns Apple stock now has more money, which either they can spend or if this was their money that they were investing for their retirement, they now invest it in a different American company. When money has come back to the United States, that dollar may not stay inside Apple. Apple might buy the stock and it goes to you and then you re-invest it.
This is going to raise wages, hire more people, and there’s an article [inaudible] Democrats complaining that economic growth is going to be strong this year and that this might re-elect Trump and Republicans. He’s trying to sound like an economist, right? But he was worried about this. This is going to be a very real challenge because it is exactly what we said would happen, and the Democrats do know … the reason Democrats oppose tax cuts is they know they need the growth that they don’t get credit for. Same way they opposed school choice; not because it won’t work, but because they know it will work. Not because they think it will be unpopular, but because they know it will be popular. That works if you can scare the Republicans away from doing it, but it fails big time once the trigger’s been pulled and the tax cut takes effect.
Seth Leibsohn: I always loved that quote on school choice from that great union leader from New York. Education Official Al Shanker. Remember that great quote? He said, “as soon as students start paying my salary, then they’ll be my chief concern.”
Grover Norquist: He was very clear and very honest. We’ve got to give him that. I don’t work for the parents, I don’t work for the kids, I work for the bureaucracy and all the bureaucrats in the school district; that’s whose pay I’m worried about.
Seth Leibsohn: Exactly. Grover, one of the great things you have been known for and you have done, not only in your professional life, but with Americans for Tax Reform, you’ve always been a nice umbrella for the conservative movement and bring in all-comers to those various stripes of conservatism. One of the things I wanted to ask you about, we out here in Phoenix, you in the Beltway, how deep is the divide anymore between Republicans who support the president and Republicans who don’t? Our sense is that it’s fading. There’s about six, maybe, that don’t anymore. What’s your sense from the movement?
Grover Norquist: OK, what you have is a handful … Trump is basically a Reagan Republican, OK? Trump doesn’t want to bother people’s Second Amendment. I serve on the board of directors of the NRA. Trump is a hero to the Second Amendment and ran for president that way, more so than Reagan did, partially because we now have 16 million Americans with concealed carry permits. It’s easier to be more pro-Second Amendment. There are more guys out there who get what it’s about. Trump has been a hero on school choice. He has done as much and more than Reagan did on the regulation. Trump has an advantage. He has a Reagan Republican House and a largely Reagan Republican Senate. Ronald Reagan had neither. With a Republican Senate that was pre-Reagan and a Democratic House, which was anti-Reagan, he had to maneuver that. Trump has real allies in the Reagan Republican majorities in the House and the Senate.
There are a handful of intellectuals who would like to run the Republican Party and the fact that the Republican Party has said “we’re not going to raise taxes, we’re going to do school choice, we’re going to have less regulations,” we sort of know where we’re going, and Trump is a leader in that zone and so there isn’t quite the same room for Republican intellectuals to go “everybody follow me.” American people want to be left alone in the zone that’s more important to their life, whether it’s the Second Amendment, their faith and transmitting that to their children, their ability to run a small business or run their own profession, to save money for their future and for their kids’ education. People wish the government not to get in the way of their happiness and success and family life and faith life and Trump and the Republican leadership in the House and Senate are all in the same zone.
There will always be distinctions because of some regional challengers, or somebody goes off in a tiff. There’s individual senators sometimes who wander off and aren’t always with the team. With 52, 51 guys, we’ve held together pretty well and I’m talking to Arizona now: guys, we need two Reagan Republicans in the Senate.
Seth Leibsohn: Perfectly said, perfectly said. Grover, we’ve got to go but I do want to say we had a caller named Tony … I’ll pass it on to John Kartch … said Northern Trust also gave $1,000 bonuses, so well done, Grover.
Grover Norquist: Wonderful, great.
Seth Leibsohn: Grover Norquist from Americans for Tax Reform. Atr.org. Godspeed, Grover.
Grover Norquist: Take care.
Seth Leibsohn: Take care.