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Norquist: Democrats' planned business taxes higher than communist China's

Biden tax hikes in reconciliation bill will lead to GOP-led House, 'maybe' Senate, said veteran anti-tax activist Grover Norquist.

Updated: September 14, 2021 - 11:10pm

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Americans for Tax Reform President Grover Norquist told Just the News that the Democrats' proposed tax increases to pay for their "behemoth" $3.5 trillion filibuster-proof social safety net spending bill would lead to Republicans taking back the House and "maybe" the Senate.

Norquist was asked if he thinks moderate House Democrats in districts that voted for former President Trump in 2020 would lose their seats if they support a $3.5 trillion reconciliation bill.

"The dirty little secret in D.C. is there are no moderate Democrats in the House or the Senate," Norquist said during an interview about the tax hikes Democrats on the House Ways and Means Committee have proposed. "There are Democrats in moderate districts. There are Democrats in swing districts. There are a couple of Democrats in trending Republican districts. They are all in trouble because they said they were going to vote one way and they have all voted to move this $3.5 trillion spending behemoth, with the massive taxes promised, forward step by step.

"Some of them might go, 'I'm not gonna vote for the final product,'" Norquist acknowledged. But whenever the question before them was whether to keep the reconciliation bill moving forward, "they voted yes, keep going, keep going," he said

D.C. Del. Eleanor Holmes Norton has said that the $3.5 trillion package will need to be reduced in order to gain support from all Senate Democrats for final passage.

Norquist predicted that there will ultimately be a massive tax and spending increase while the Democrats are in control of Congress.

"Maybe not as big as what Biden wants," he conceded, but "there'll be a massive spending increase; maybe not as big as what Bernie Sanders wants, but more than the American people asked for or wanted." 

Norquist noted that past Democratic presidents saw their party lose control in Congress during their time in office.

"Under two years into Bill Clinton, he raised taxes, spent too much, lost the House, lost the Senate for six years," he recalled. "He was a lonely president with a Republican Congress. Two years into Obama, he lost the House — 63 House seats, and six Senate seats right away. And he was a very lonely president for the last six years of his presidency, unable to initiate any successful programs or efforts because of that. Two years into Biden, we're going to see a Republican House and probably Republican Senate as a result and begin to stop the bleeding, but it's going to hurt."

Norquist said that the Democrats' proposed tax hikes to pay for "free stuff" in the reconciliation bill will hurt American workers, despite Biden and the Democrats framing them all as taxes on the wealthy. 

"This is the scene in the horror movie where the guy talks the girl into coming up to his apartment, and he pulls out the hacksaw," he said. "And you get to understand how the rest of the movie is going to go."

Under the Democrats' plan, the corporate tax rate would rise to 26.5% from 21%, and the top capital gains tax rate would jump to 28.8% from 23.8%.

Norquist said the new hikes in corporate and capital gains tax rates, among others, will impact average American workers, whether directly or indirectly.

"They're going to take the corporate rate — the tax that American companies pay — up higher than communist China's business tax, higher than the European average," he said. "Okay, so we will not be competitive with China when people are looking to invest, not competitive with Europe when people are looking to invest, start new firms.

He noted that more than half of American families who have a 401k or an IRA will feel the effect of the capital gains tax hikes that Biden wants passed.

"They want to raise taxes that will make the stocks inside your life savings, your 401k, your IRA, they want to make them worth less, because if you tax an income stream from something, it's worth less," Norquist said. "If you have a 401k, or an IRA, or a health savings account, you will be harmed directly by this. If you pay utility bills, you will be paying higher taxes. Why? Because your utility for energy or natural gas pays federal income taxes, corporate taxes, and those taxes imposed by the federal government on utilities are paid, 100%, they're passed on to consumers."

Norquist argued that the purpose of the reconciliation bill is to "make more people dependent on the government" and become compliant over time. 

"People who are more reliant on the government do not challenge the government when the government tells them what to do," he said.

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