NBC's Gregory: Idea That Tax Hikes Hurt Economy 'One of the Falsehoods That's Peddled in Washington'

In an interview with Americans for Tax Reform President Grover Norquist on NBC's Meet the Press on Sunday, host David Gregory dismissed concerns that raising taxes could harm the economy: "But the notion that tax cuts or tax increases somehow impact economic growth, we know historically that's simply not the case....Isn't that one of the falsehoods that's peddled in Washington?" [Audio available here]

Gregory cited supposed evidence for his argument: "President Clinton raised taxes during boom times. President Bush lowered taxes did not spur great job creation." In reality, over 8 million jobs were created in the wake of the Bush tax cuts. And about Clinton's tax hikes, Norquist pointed out to Gregory: "If you take a look at when you cut marginal tax rates, the strong growth in the last six years of the '90s started the day the Republicans captured the House and Senate. Didn't happen in the first two years, certainly didn't happen with the tax increase..." [View video after the jump] 

Gregory followed up by touting poll numbers in support of raising taxes: "Here's the reality in terms of how Americans feel about taxes and, indeed, how Republicans feel about it, which seems to be at odds to where you are. Marist polling out earlier this month indicates 53 percent of Republicans agree, yes, taxes should be raised on higher income Americans as part of a debt deal."

On the November 20 Meet the Press, Gregory asserted to Arizona Senator Jon Kyl: "The Bush tax cuts...real deficit hawks, many of them happening to be Republicans....said let them all expire for everybody. For the rich, for the middle class. If you really want to get serious about the deficit, let the Bush tax cuts expire for everybody."

At the top of Sunday's interview, Gregory played a sound bite of former Senator and deficit commission co-chair Alan Simpson slamming Norquist: "...megalomaniac, egomaniac, whatever you want to call him....he ought to run for president because that would be his platform, no taxes under any situation, even if your country goes to hell." Gregory wondered: "What do you say to that?"

Norquist proceeded to list occasions when Republicans agreed to tax increases after being promised large spending cuts and how Democrats later prevented such cutting. He concluded: "Twice taxes were increased, spending was not reduced at all. So the American people aren't falling for that again."

Gregory then insisted: "But, Mr. Norquist, don't times change? Isn't that what Alan Simpson is saying? I think his conservative bona fides are pretty well established, and he's saying, 'Look, times change. There requires a balanced approach, and in this kind of economy, after a financial crisis, revenues have to be part of the picture.'"

Later, after citing the latest polling on the issue, Gregory proclaimed that opposition to raising taxes "is also against the backdrop of history of Ronald Reagan raising taxes, a conservative icon." Norquist reiterated: "Yeah, and my point was that when Reagan did it in '82 as part of a deal, the Democrats never actually cut the spending. Taxes went up, spending didn't go down."

Here is a transcript of Gregory's November 27 exchange with Norquist:

10:44AM ET

DAVID GREGORY: Let me turn to the man now in the middle of the debate over taxes and spending, anti-tax advocate Grover Norquist, head of Americans for Tax Reform.

Mr. Norquist, welcome to Meet the Press. Your name has been mentioned prominently throughout the week here in Washington. And in profiles done of you, Alan Simpson, who we've been talking about, the head of the Simpson-Bowles commission, he was interviewed in a profile about you for 60 Minutes. And this is what he said.

ALAN SIMPSON: He may well be the most powerful man in America today. So, if that's what he wants, he's got it. You know, he, megalomaniac, egomaniac, whatever you want to call him, if that's his goal, he's damned near there. And he ought to run for president because that would be his platform, no taxes under any situation, even if your country goes to hell.

GREGORY: What do you say to that?

GROVER NORQUIST: Well, look, the tax issue is a very important issue. It's odd some people have tried to personalize it, but the American people have had their taxes raised in the past. In 1982 the Democrats said, "Gee, if you let us raise taxes, we'll cut spending $3 for every dollar of tax increase." Taxes were raised, spending didn't go down, spending went up.

Same thing happened in 1990, although George Bush, George Herbert Walker Bush, was promised $2 in phony spending cuts for every dollar of tax increase. Taxes went up, spending actually increased. It wasn't cut. Twice the Democrats have said, "Let's raise taxes and cut spending." Twice taxes were increased, spending was not reduced at all. So the American people aren't falling for that again. We know that if you raise taxes the politicians in Washington simply spend it. And they can promise anything they want, but Lucy and the football, Charlie Brown just isn't going to fall for this again.

GREGORY: But, Mr. Norquist, don't times change? Isn't that what Alan Simpson is saying? I think his conservative bona fides are pretty well established, and he's saying, "Look, times change. There requires a balanced approach, and in this kind of economy, after a financial crisis, revenues have to be part of the picture."

NORQUIST: No. Raising taxes slows the economy. Raising taxes kills jobs. Government spending does not create jobs. The idea that if you take $1 out of the economy and then – from somebody who earned it, either through debt or through taxes, and give it to somebody who's politically connected that there are more dollars around? That if you stand on one side of the lake and put a bucket into the lake and walk around to the other side in front of the TV cameras, pour the bucket back into the lake and announce you're stimulating the lake to great depths. We just wasted $800 billion on stimulus spending that added to debt that killed jobs. There are fewer jobs than before.

GREGORY: But the notion, but the notion that tax cuts or tax increases somehow impact economic growth, we know historically that's simply not the case. President Clinton raised taxes during boom times. President Bush lowered taxes did not spur great job creation. Isn't that one of the falsehoods that's peddled in Washington?

NORQUIST: No. If you take a look at when you cut marginal tax rates, the strong growth in the last six years of the '90s started the day the Republicans captured the House and Senate. Didn't happen in the first two years, certainly didn't happen with the tax increase, and there was a cut of the capital gains tax that helped stimulate economic growth there.

The Bush tax cuts 2001 were not designed to be stimulative to the economy. There were a lot of tax credits in there, they weren't real reductions in rates. The 2003 rate reductions you had on cap gains and others, that gave you four years of strong economic growth that lasted until the Democrats won the House and Senate, and you knew those tax cuts were going away.

GREGORY: Here's the reality in terms of how Americans feel about taxes and, indeed, how Republicans feel about it, which seems to be at odds to where you are. Marist polling out earlier this month indicates 53 percent of Republicans agree, yes, taxes should be raised on higher income Americans as part of a debt deal. I mean, this is also against the backdrop of history of Ronald Reagan raising taxes, a conservative icon.

NORQUIST: Yeah, and my point was that when Reagan did it in '82 as part of a deal, the Democrats never actually cut the spending. Taxes went up, spending didn't go down. It's just for a number of reasons tax increases are what politicians do rather than reform government, rather than make tough decisions.

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