The Corner

The Club for Growth vs. Americans for Tax Reform

The Club is key-voting the Coburn amendment, which repeals an ethanol tax credit. That means that when it rates senators, saying what percentage of the time they voted the right way, this will be one of the votes it counts. It says the credit is “economically irrational” and “distort[s] capital investments,” which are clearly true.

Americans for Tax Reform, Grover Norquist’s group, favors repeal too, but only if other taxes are cut. As written the amendment is a net tax increase, which means it violates the “taxpayer protection pledge” that Norquist’s group promotes–and which almost all Republican congressmen and senators, including Coburn, have taken.

The stakes go beyond ethanol. Coburn wants a budget-balancing deal that raises revenue by scaling back a lot of tax breaks. If Republicans accept the principle that ending tax breaks without compensatory tax cuts is fine, that kind of deal becomes much more achievable. One interesting question this fight raises: Would the Club accept this as a general principle, or is this a position good for the ethanol issue only? The mortgage-interest deduction, for example, is clearly also economically irrational and distorts investment, but getting rid of it would be a pretty big tax increase. If the Club is willing to go along with such a policy then the odds of a bipartisan deal that raises taxes and cuts spending are much better than anyone would have thought.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.


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