How the anti-tax movement went from fringe to mainstream

The GOP prides itself on being the anti-tax party. But it wasn't always that way.

In Michael Graetz’s book "The Power to Destroy," he describes how the anti-tax movement became one of the most powerful forces reshaping American politics and society in the past 50 years.

Today, On Point: How the anti-tax movement went from fringe to mainstream.

Michael Graetz, leading expert on national and international tax law. Professor emeritus at Columbia and Yale Law Schools. He’s also the author of "The Power to Destroy: How the Antitax Movement Hijacked America."

Part I

HOWARD BEALE: I don't want you to protest. I don't want you to write. I don't want you to write to your congressman because I wouldn't know what to tell you to write I don't know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first you've got to get mad. You've got to say I'm a human being. Goddamn it! My life has value!

MEGHNA CHAKRABARTI: In 1976, actor Peter Finch played the Oscar winning role of Howard Beale in the movie Network, where he let loose one of the iconic rants in Hollywood history.

BEALE: Then we'll figure out what to do about the depression and the inflation and the oil crisis.

(EXPLOSION) But first get up out of your chair, open the window, go and say I'm as mad as hell and I'm not going to take this anymore!

CHAKRABARTI: That same year, a man named Howard Jarvis also watched the fictional Howard Beale scream out, I'm as mad as hell at a movie camera. And Howard Jarvis knew he'd found the title of his autobiography, which he'd published three years later.

In fact, he'd found more than a book title. The California businessman and activist had found the phrase he'd transform into a national movement.

HOWARD JARVIS: After all the basis of a free country is that government must be limited. And now we've got unlimited government. We got, that brings unlimited taxation that either brings you into bankruptcy or dictatorship.

CHAKRABARTI: Howard Jarvis spent his entire life advocating against taxation of all kinds. And in 1978, he won his greatest victory with a California voter referendum that fundamentally shifted the way most Americans viewed government. It didn't come without reason. In the 1960s, California was a fast-growing state.

Residents accepted higher taxes in exchange for world class services, education, and jobs. But as the 1970s wore on, inflation, oil prices, and increasing distrust of government soured voters' moods. Rapidly rising housing prices produced a legitimate fear in many Californians that they risked losing their homes.

And that's when Jarvis and his taxpayer revolt took aim at property taxes. The cantankerous, charismatic, anti-tax crusader appeared regularly on a Los Angeles television station in a series of debates where he lambasted critics who said reducing property taxes would devastate California. And it rocketed him to fame.

MAN #1: Is using this taxpayer revolt, homeowner revolt to really help not the homeowner really?

JARVIS: That’s phony.

MAN #1: It's, can I finish Mr Jarvis? It's to help the big industrial property.

JARVIS: That is the biggest phony deal!

CHAKRABARTI: In June of 1978, California voters agreed with Jarvis, by an overwhelming margin. They passed Proposition 13.

A 10-line law that limited property taxes to 1% of the initial purchase price, capped annual increases to 2% per year, and required that future tax increases could only pass with a two thirds majority in the state legislature.

We have a new revolution against the arrogant politicians and insensitive bureaucrats whose philosophy of tax, tax, tax spend, spend, spend, elect and elect and elect is bankrupt. We, the American people and the time has come to put a stop. 

CHAKRABARTI: The fallout was immediate.

JERRY BROWN: We have only three weeks to act three weeks to decide multibillion dollars of fiscal questions.

CHAKRABARTI: That was then California Governor Jerry Brown announcing radical changes that state and local government would have to make. The first big hit came to the state's system of public education.

Hank Springer, teachers' union leader in Los Angeles foretold disaster.

HANK SPRINGER: We're looking at laying off two thirds of the teachers in the city. We've lost all of our money, more than half of our money. I think it's as serious a thing as ever in the history of this country. I think that we're seeing the absolute collapse of our school system in Los Angeles.

CHAKRABARTI: To that, Howard Jarvis scoffed.

HOWARD JARVIS: This country is not the school system, nor the Police Department nor the Fire Department, the right to preserve the right to have property in this country. The right, the right to have a home in this country that's important.

CHAKRABARTI: He also once remarked on NBC's Meet the Press that, quote, the people who wrote the Constitution didn't say life, liberty, and welfare, or life, liberty, and food stamps, end quote.

Our guest today says that is the real reason for the half century success of the anti-tax movement, which quickly spread from California to states across the country. It's not just a fiscal movement, he says, but a social one. And one so powerful, it's not only become sacrosanct policy in the Republican Party, but political kryptonite for Democrats, too.

Which is why, since 1978, every single president has made similar promises to most of the American people.

RONALD REAGAN: We can either declare April 15th the day of national mourning (LAUGHTER) or we can change the system.

GEORGE BUSH: And they'll push again, and I'll say, read my lips. (CHEERS) No. New. Taxes.

BILL CLINTON: The era of big government is over.

GEORGE W. BUSH: We must give overcharged taxpayers some of their own money back.

BARACK OBAMA: If you are a family making less than $250,000 a year, you will not see your taxes go up.

DONALD TRUMP: We want to give you the American people a giant tax cut for Christmas. And when I say giant, I mean giant. (APPLAUSE)

JOE BIDEN: Under my plans, as long as I'm president, nobody earning less than $400,000 will pay an additional penny in taxes. Nobody, not one penny. (APPLAUSE)

CHAKRABARTI: Michael Graetz joins us. He's a leading expert on taxation law. Also, professor emeritus at Columbia and Yale University Law Schools, and he has a new book. It's called "The Power to Destroy: How the Antitax Movement Hijacked America." Professor Graetz, welcome to On Point.

MICHAEL GRAETZ: Thank you, Meghna. Pleasure to be here.

CHAKRABARTI: First of all, let's stick with California. And tell us what exactly did Howard Jarvis latch onto in California in the late 1970s that made him so effective and got Proposition 13 passed?

GRAETZ: The first thing, of course, was that housing prices were going up in California, particularly in Southern California, and then in the Bay Area around San Francisco.

And as housing prices went up, property taxes went up, and people's income was not keeping up with it, especially among the elderly, and that may have been enough by itself to have gotten Proposition 13 over the finish line, but there were other important things going on in California.

California's legislature had a surplus and it couldn't decide what to do with it. And so it was sitting on a lot of money and the taxpayers thought that money should go back to them. There was a huge issue of racial transformation going on in California at the time. Many of the white students had left the schools, Latinos from the Southern border had come into California in great numbers.

And the schools had become African American and Latino, and the California Supreme Court said basically that those people in rich districts were not able to have schools that spent a lot more money than those people who could not impose property taxes. Because their properties were not valuable. And no matter how high a tax rate they had, they couldn't match the expenditures of the rich schools.

And the California Supreme Court basically said that there had to be a very small difference. They said about $100 per pupil, between the expenditures of the rich districts and the poor districts. Which meant that people's property taxes were paying for somebody else's schooling. Was the view that they had.

And then of course the Supreme Court was considering the Bakke case at the time and Alan Bakke was a white applicant to the University of California. Davis medical school, and he had been denied admission and he sued. In a case that went to the Supreme Court, in which the Supreme Court said that he had to be admitted to the University of California, Davis Medical Center.

CHAKRABARTI: If I could just jump in here.

GRAETZ: Affirmative action was not permissible. You couldn't have a quota, which the school had for minority students.

CHAKRABARTI: Yeah, so this is all the important, the critical background about the voters and particularly white affluent voters in California at the time.

But I'm curious, did Jarvis ever overtly link his anti-tax crusade or tax revolt to these social changes in California or did he not need to?

GRAETZ: I think it's fair to say that he often used coded racial language. He always talked about us paying for them. We are paying the taxes, and they are getting the benefits.

He talked about welfare endlessly, food stamps, the undeserving poor as he kept referring to them. So he was not explicitly racist in his language. But he made it clear that who he was talking about, and he often talked about the immigrants coming into California, as well. So I don't think there was much ambiguity about who he was, who they were.

And he also viewed, it sounds like he also viewed government as separate from the people, right? This, as you make clear in the book, this isn't just an anti-taxation movement. This is what gives, helps give rise to a profound antigovernment sentiment amongst many Americans.

GRAETZ: That's right. And Howard Jarvis himself had during World War II, a plant that was making mattresses. This government commandeered his latex for the war effort. It never used the latex in the war effort, and it took a long time to compensate him for the loss of the latex and really put him out of business.

And that made Howard Jarvis an anti-government zealot throughout his life. And so he was antigovernment as much as he was anti-tax.

Part II

CHAKRABARTI: We'll definitely get to the post 1978 tsunami of anti-tax fervor that washed across the United States, but I actually, in the spirit of respectful challenge, I want to move back in time, first of all, a little bit and talk about the fact that you're linking the anti-tax, modern anti-tax movement to basically a social agenda as well. But you do point out in the book that a turbulent relationship with taxation is as old as the nation itself, right? To the point where Sam Adams, pre-revolution Sam Adams, won the office of tax collector in Boston by pledging not to collect taxes.

And so that was in defiance of the British crown, not necessarily an attempt to drive some sort of racist social agenda.

GRAETZ: That's right. The U.S. has always had resistance to taxes. Alexander Hamilton decided when he was secretary of the treasury, that he needed to impose taxes on whiskey in order to prove that the federal government had the power to raise taxes domestically, and that then produced a whiskey rebellion in Pennsylvania.

So there have been anti-tax movements from the beginning of the country's founding, but the modern tax, anti-tax movement, I think, is different in the sense that it was not just self-interest that motivated the origins of the anti-tax movement, but it was really as I mentioned earlier, we are now paying taxes for them to realize benefits.

And then, of course, the Christian evangelicals in 1978 found themselves having had what we're called segregation academies, a lot of segregated schools, private schools in the South that relied on tax exemption and deductible charitable contributions for their financial lifeblood.

And in the early seventies, the IRS had said that segregated academies were no longer eligible for these tax benefits. And then in 1978, Jimmy Carter's Commissioner of Internal Revenue basically said that these schools had to be admitting some minority students, not just saying that they were open to minority students.

And this created a huge backlash against the IRS, it brought Jerry Falwell and the moral majority into the anti-tax movement and into the Republican coalition for the first time.

CHAKRABARTI: Yeah. Can I just jump in here, Professor? Because we're definitely going to talk about that. That's a part of the story, which I don't think is well enough known.

But again, I'm thinking in terms of today that certainly this real enmity towards taxation is at the heart of the Republican Party. But as we showed at the beginning of the show, when you're thinking about individual Americans, regardless of their political leanings, from deeply conservative to deeply liberal, I would say if they're honest to themselves, everyone chafes a bit at especially federal taxation.

And part, in a sense, you lay out why that may be, because part of the reason is that as you point out, there wasn't really a robust individual income tax until the Second World War and thereafter, right? And that's when you say we become a nation of taxpayers.

CHAKRABARTI: And then you have some very interesting facts about sort of how our tax culture evolved from them.

You say by the time the Second World War ended, individual income tax accounted for 40% of federal revenues, corporate income taxes, another third. But since then, in the decades after, by 2021, more than half of all U.S. federal revenues are supplied by income taxes on individuals. Only 9% comes from corporate income tax.

And then that's also for publicly traded companies, not family or privately held corporations. Then there's the taxes on wages for social security and Medicare. Then there's obviously private property tax, sales tax. In all, what you're talking about is a federal government that's like incredibly reliant on an individual's ability to pay taxes.

And is it not understandable that those same individuals are seeing a massive imbalance there, and so therefore are hostile for not racist reasons, but hostile to the federal government's taxation regime.

GRAETZ: I think there's a lot of truth to that. If you look at polling data, people are very much convinced that the rich and large corporations are not paying their fair share.

And ProPublica in recent years has run a series of stories revealing why people at the very top are able to borrow against their gains from their stock and then hold on to those assets until they die when the tax is forgiven. Yes, I agree with you, Meghna, that the modern movement is really based largely on a concern that people at the very top are not paying taxes.

And that really is the transformation of the democratic party in terms of its attitude toward taxes. So the Republicans, I would argue, since the Reagan administration in the early 1980s, have really not wanted to tax anyone, and the Democrats now don't want to tax 98% of anyone. They only want to tax the top 2%.

And at the beginning of this show you ran the clip from Joe Biden saying no one with income below $400,000 will pay any increased taxes. And that has been the Democratic position since Biden was vice president and in 2013 negotiated essentially the extension of George W. Bush's tax cuts in 2001 and 2003 for 98% of the people.

And only increased taxes above $400,000. The problem, of course, is you can't run a government by taxing only the top 2% of the people. And so this is a political problem. And we've basically not cut spending. One of the great myths of the anti-tax movement is that cutting taxes will quote, starve the beast. And that has happened to some extent at state levels where they're required to balance the budget.

So you've got taxes and spending has to be cut, but at the federal level, we've just basically borrowed, and we now have a federal debt that's higher than it has been at any time since the end of World War II.

So we've decided not to tax and spend, but we are borrowing and spending and even the Tea party, to take an example, basically has said, don't mess with my social security. Don't mess with Medicare. The Republican party in particular has wanted to have a robust national defense. And now what's happened is that the interest on the federal debt is larger than spending on Medicare.

And it's larger than spending on the national defense. And it's larger than any expenditure in the federal government with the exception of social security and it's growing faster than any expenditure in the federal government. So we basically have moved from a position where we were paying for the spending that the federal government was involved in to borrowing for that spending.

And that has created a huge drain on our finances, a lot of which is going abroad.

CHAKRABARTI: Yeah, your point well taken about that neither Republicans or Democrats have wanted to cut while reducing federal revenues. I would say with the exception of Bill Clinton, who definitely reformed welfare in this country, we can get to that a little bit later, but also resist the urge to bring in the potential retort from the modern monetary theorists about the cost on essentially taxation on your children's and grandchildren's future when it comes to paying for the national debt.

I promise you. I will resist that urge, Professor Graetz, but let's get back to something you were saying earlier.

GRAETZ: I would respond to it if you didn't resist it, so I think it's a good thing to resist it.

CHAKRABARTI: (LAUGHS) Every time I bring up MMT, I get a lot of emails from folks, who are, gets their feathers ruffled, but I actually want to get back to the very the important history that you talk about in your book, The Power to Destroy.

And you had mentioned the critical role that the evangelical Christian movement plays in spreading, if I can call it this way, an anti-tax gospel across the United States. So here's American historian Randall Balmer explaining to a group called The Retro Report about how conservative political strategist, Paul Weyrich, was able to get evangelical Christians on the anti-tax train.

He said, "I tried everything to get them involved in politics. I tried the abortion issue. I tried the women's rights issue. I tried pornography. Nothing got their attention, that is the attention of evangelical leaders, until the IRS began to pursue the tax exemption of racially segregated schools."

CHAKRABARTI: So professor Graetz, tell us more about this, about the role of the evangelical Christian movement here.

GRAETZ: I think it's exactly right. There have been a lot of people who have looked at it since, in the history of religion in the United States, the key there was that Ronald Reagan decided to take great advantage of this. And basically, ran for president, claiming that he would reverse the IRS position and restore the tax benefits to segregated schools that the IRS had successfully challenged up to that point.

It became a very big issue in 1980 when he was running for president. He brought the Christian evangelical movement into the Republican coalition, and it created an anti IRS component to the anti-tax movement that has never disappeared. Now I know the American people say they'd rather have a root canal than an audit by the IRS.

And as you pointed out earlier, Meghna, nobody likes to pay taxes. And least of all, does anybody want to deal with the IRS, including myself, who have had a bad experience with the government? But I think what happened here is that Republican operatives, Paul Weyrich was one of the most important, but there was also Richard Viguerie.

They were Catholics and they had been anti-abortion all along, but they saw the tax issue as a way to get the Southern Baptist part of the Christian evangelical movement into the coalition of Republicans through the anti-tax movement. And Balmer basically has the story correct, which is that why Richard Viguerie convinced Jerry Falwell to start what became the moral majority in response to the IRS efforts to desegregate schools.

Private schools. That the Supreme Court ultimately sided with the IRS and denied to those schools and schools like Bob Jones University in South Carolina, which had been segregated for years. Ultimately, decided to desegregate and admit some African American students.

CHAKRABARTI: Yeah, Professor, I just want to jump here very quickly and say, I'm Meghna Chakrabarti, this is On Point.

So the passion and the organization of the Christian Evangelical Movement really helps accelerate the anti-tax or the American tax revolt, let's call it that, following 1978. But in addition, professor, there's a great deal of economic theory behind the political or policy objectives of reducing or even eliminating taxation.

And in this economic theory has held sway for 40 years, and it's not gone. It's definitely not gone yet. So I just want to play a quick moment from President Ronald Reagan that helps explain some of this. This is October 22, 1986, when Reagan signed the Tax Reform Act of '86.

And here's what he described as the perceived benefits.

REAGAN: The bill I'm signing today is not only an historic overhaul of our tax code and a sweeping victory for fairness, it's also the best anti-poverty bill, the best pro-family measure.

And the best job creation program ever to come out of the Congress of the United States.

CHAKRABARTI: So professor, right there, Reagan basically summarizes it, that it'll be better for American families and individuals. Because more jobs will be created because corporations will, and high worth, net-worth individuals will have more money to create those jobs.

And therefore, it's better for the economy as a whole. Did any of that actually come to pass?

GRAETZ: The anti-tax movement was grounded economically in two fundamental claims that have both been proven false over time. One was a claim that was grounded in a famous curve by Arthur Laffer that basically says that cutting taxes will reduce.

I'm sorry. Will increase government revenues, that you'll produce so much economic growth that tax cuts will pay for themselves. And that has been a longstanding argument through the Donald Trump tax cuts. In 2017. The other is that Milton Friedman claimed that it would starve the beast.

And we've already talked about the fact that the beast of the federal government is not starved in this. And then supply-side economics, which came in to replace Keynesian economics, which Keynesian economics had basically said, give money to the public. They'll spend it and the spending will boost the economy.

And that had fallen into disrepute in the late '70s, because of the combination of high inflation and high unemployment, which was known as stagflation, which Keynesian economics had basically said will not occur. And nature abhors a vacuum, and the supply side economic theory came in to replace Keynesian economics and supply side economics.

Part III

CHAKRABARTI: Professor Graetz, before we get back to your thoughts on supply side economics, I just wanted to listen briefly to one of the again, very influential forces in mainstreaming some of the economic reasons or theories that accelerated voters embrace of anti-taxation. And that mainstreaming came in part via people like Rush Limbaugh, who talked about anti-tax theories a great deal on his radio program.

RUSH LIMBAUGH: Charts and graphs can prove that tax rate reductions enhance revenue. Tax cuts create revenue, particularly in an economy like ours. A balanced approach would require tax cuts, the only proven way to raise revenue and create jobs.

CHAKRABARTI: Professor Graetz, in a sense, the elegant simplicity of the equation that Rush Limbaugh articulates there, tax cuts are the only proven way to raise revenue and create jobs, is one of the reasons why I think it was so successful, but these charts and graphs that Limbaugh was talking about, is he hearkening to the sort of the supply side economics theories and scholarship that as you said Milt Friedman et al really popularized?

GRAETZ: I don't know which charts he was referring to.

CHAKRABARTI: There were so many.

GRAETZ: One of the things about Rush Limbaugh is that when he described charts and so forth, you never knew exactly which ones he was talking about. But the bit that you just played from Rush Limbaugh was the extreme view that cutting taxes is the only way to raise revenues, even though since Ronald Reagan, we've discovered that deficits have gone up when taxes have been cut.

Ronald Reagan came into office, when he came into office, the federal debt was about $900 billion. When he left office, it was $2.7 trillion. And so he tripled the federal debt and increased the federal debt more than all of the presidents that preceded him. So the notion that somehow tax cuts increase revenue is one of the false claims of the anti-tax movement that has never been abandoned, even though it has never, it's always been disproven. It's never happened the way it's described, but that doesn't seem to matter. That must be the charts and graphs that Limbaugh is referring to.

CHAKRABARTI: Let me just jump in here again. And you had mentioned the Laffer curve, which, again, very influential.

And we have a clip here from Arthur Laffer himself and again this curve that he created was grounded in the idea that tax cuts are a path to economic growth. And here he is explaining the Laffer curve.

ARTHUR LAFFER: How much would you work if you were taxed at 100%? So that every time you go to the office instead of getting a check, you get a bill.

Obviously, you wouldn't work at all, and there'd be no work, but also the tax revenues would be zero. Now, that's this point right here on the Laffer Curve. At 100% tax rates, no one will find there's any incentive whatsoever to work, they won't work, and tax revenues will be zero, as well. Now, as you start lowering tax rates, to 99% to 98% to 97%, somewhere along the line, all of a sudden, you're going to find it worthwhile to start working and you're going to see revenues starting to rise.

CHAKRABARTI: Okay, so Professor Graetz, with all due respect to economists around the world, I have to say from my position as just a regular citizen here, this is one of the chief problems when theoretical economics makes its way into Congress or the White House. Because all of these economic theories and the charts and graphs, if I can put it that way again, seem to ignore the truth of human nature.

Because Laffer there is making the assertion that at high tax rates, no one's going to want to work. That's essentially what he's saying. But if memory serves, none other than Warren Buffett once said that he never knew, has never met an extremely wealthy person who didn't want to make more money, just because the marginal tax rates were really high.

Basically, all they wanted to do was make more money and hide. And be able to protect more of that extra income from the federal government, but it didn't disincentivize them to work. So I'm just wondering, what do you think made these economic theories so sticky when it comes to actual policy?

GRAETZ: Ronald Reagan was a great believer in what Arthur Laffer just said. He always claimed that after he had made three movies, this is back when he was a B movie actor back in the day before he became a politician. That after you made three movies, it just didn't pay to make another movie because the tax rates were 91%.

And so his view was that you had to lower tax rates in order to make people work. The Laffer curve was very clever in the sense that it had only two numbers on it, 0% and 100%, which your clip reveals. He talks about the zero point. You don't raise any revenue in 100%.

He claims you don't raise any revenue, but he doesn't tell you what the revenue maximizing rate is. And at the time that Ronald Reagan was president, the top rate was 70% on unearned income, on interest in dividends and the like. When Ronald Reagan left office, the top rate was 28%. So he managed to reduce the rate from 70% to 28%.

Since Reagan, it's never gone above 39.6%. It's always been 40% or under. And it's very hard to believe that somehow we're still on the wrong side of Arthur Laffer's curve. But again, this is an issue.

CHAKRABARTI: The point might have been down at 2%, but we just don't know, because like you said, he didn't have any actual breakpoint in that curve.

GRAETZ: No, he didn't tell us on the curve exactly where it would be, but it's very hard to believe that we're going to raise revenue by reducing taxes, given the current rates. But nevertheless, that claim persists. And it's just one of the false claims. And just to finish the point about supply side economics, because I think it's important, is the claim of supply side economics was that the place to reduce taxes was at the top, where you have people with lots of savings who will invest lots of capital to be invested. And so you want to reduce taxes on the rich and on businesses, large corporations and the like. And that has also been very successful as you described earlier. And so it's not just a question of reducing taxes.

It's also a question of whose taxes get reduced based on these economic theories.

CHAKRABARTI: So this gets us back to really the central, one of the central thesis' in your book about how — you're not the first person to say this. Many people have said this. That essentially how a nation and who a nation decides to tax is as much a moral decision as it is a fiscal decision.

And so that gets us back to what is the continuing underlying drive, that you say, that makes the anti-tax movement such a powerful and so far indefatigable social movement. So let's go back in time once again. This is Ronald Reagan in January of 1976, uttering some very famous lines about what he called the welfare queen.

REAGAN: In Chicago, they found a woman who holds the record. She used 80 names, 30 addresses, 15 telephone numbers. To collect food stamps, social security, veterans benefits for four nonexistent deceased veterans' husbands, as well as welfare. Her tax-free cash income alone has been running $150,000 a year.

CHAKRABARTI: So the welfare queen, which Ronald Reagan never actually said who he claimed that to be.

But maybe the point of that clip is made even more clearly by Grover Norquist, who's one of the prominent leaders of the anti-tax, the modern anti-tax movement. And he once said that if you control taxation, you control everything, which basically means you control how that money is spent. And he created the Taxpayer Protection Pledge, which asks all candidates running for federal office to sign basically saying they won't increase taxes.

So here's Norquist explaining that on a C-SPAN interview.

GROVER NORQUIST: Pledge is very simple. No net tax increase. No net tax increase. We're very much in favor of tax reform, reducing rates, broadening the base. That's why we reform. That's what we're for. But we drew a line in the sand. Don't ever use tax reform as a way to raise taxes.

CHAKRABARTI: Norquist also once famously said that he wanted to use the anti-tax movement to drown the government in the bathtub. So Professor Graetz, to me, this is why I'm so appreciative that you use 1978 as this break point, essentially, because it symbolizes a complete change in what many Americans viewed that government was even for, right?

Because prior to that, in the era of the New Deal, the view was government was there to actually assist all Americans in living a more dignified, secure life. And it sounds like one of the major moral drivers post 1978 was government shouldn't even be in that business at --

GRAETZ: That was definitely, Norquist basically said that you can't even close a tax loophole without cutting somebody else's tax rates.

Really an extreme view of the anti-tax movement, but he's been enormously successful. Virtually all the Republican office holders since he started the pledge in 1986 have signed it. Both at the federal level and at the state level, so he's been incredibly successful in moving the anti-tax movement.

The problem these days is that even when you look at the Tea party, the members of the Tea party were very much in favor of protecting Medicare and protecting social security. And they didn't want anybody touching as they described it, their Medicare or their social security. And Donald Trump really transformed the Republican position on drowning the government in a bathtub.

As Grover Norquist said, by insisting that he would not touch Medicare or social security. And as a result, we're in a position, as I said earlier, where the government is not paying for the spending that the people demand, and so you've got the American public insisting on health insurance, insisting on protecting from poverty and in retirement, in some cases, protecting children from poverty.

And yet ... that's why we've got this huge national debt where we have a national debt that's larger than it's been at any time since the end of World War II. And at that time, 95% of the debt was owed to Americans. And we were on the cusp of a major burst of economic growth. Because Europe was in shambles, and Japan was in shambles and China was entering into a dark communist period.

And we had all the money there was, and that's not the situation today. And we're now spending more on interest on the federal debt every year than the economy grows in a particular year, taking every dollar of growth in the federal and the national economy. And we're spending it on paying interest on debt over the period since the 1970s, early 1980s.

CHAKRABARTI: In your book, you point out that, by what, 2050, 2052, the CBO says that paying those interest costs are going to be more than 7% of the United States GDP. But I have to say, this seems like an untenable impasse that the country is in now. Because to your point, voters do not want Social Security or Medicare cut for a good reason. Millions and millions of Americans rely on Social Security and Medicare to, again, have a, at least, somewhat dignified post-retirement life.

But then also, even though the anti-tax gospel is central to the Republican Party, I would argue that when it comes to the wealthiest Americans who own the vast majority of the country's wealth, they are completely bipartisan in their hatred of any increase in or any wealth tax or any increase in income or other forms of taxes that would touch the 1%.

Like super wealthy Democrats might say, Oh, yes, we want to support a change in the tax regime. They might say that out of one side of their mouth, but then their money is going to supporting interest groups and lobbyists who do everything they can to actually create more loopholes. So what's the way out of that?

Those two opposing tensions, if there is any.

GRAETZ: I wish I knew. I wish the book ended with the solution to the problem you just described, Meghna. Herb Stein, who was Richard Nixon's chief economist famously told Congress during the 1980s when the debt was rising, excuse me, that if something can't go on, it will stop.

What he didn't tell us was how it will stop. And as you say, Democrats in 2022 refused to tax the rich, even though Joe Biden made many proposals that they could have picked up, but none of them were picked up by a democratic Congress. So the Republicans basically agree on this and we're in 2025 on the verge of another $3.5 trillion of tax cuts.

So I don't know how it will stop. It certainly doesn't seem like it's going to stop in the next couple of years. Absent some major crisis in the bond market, where treasury tries to issue bonds and fails to do. Or the Republicans basically create a crisis in the bond market or ceiling, which somehow they've decided is a good idea, even though it is foolish in the extreme.