There are Ten Commandments of Capitalism. The Capitalist League curated these as having been shown, over and over, to have the power to snatch equitable prosperity from the jaws of misery. The more, and more emphatically, we adopt and live by these Ten Commandments — laws of nature, really — the more good jobs the economy will create. The Ten Commandments are the laws of policy that allow workers to achieve economic security and even affluence.
These commandments are so powerful that, taken together, they can end a recession even a depression, fast, even one induced by something as horrible as a pandemic. (They've cured worse.) The First Commandment is to keep the top income tax rate at 28% or less. Currently it's 37%. We explained here why 28% is better.
Capitalism's Second Commandment codifies Grover Norquist's famous Taxpayer Protection Pledge: There shall be no reduction or elimination of income tax deductions and credits unless matched dollar for dollar by further reducing tax rates.
In 1986, Grover Norquist, founder of Americans for Tax Reform, encouraged by President Reagan, formulated a simple pledge for political candidates. Candidates were asked to pledge, in writing, to not take away tax deductions or credits unless for the purpose of cutting tax rates. Per ATR,
"Politicians often run for office saying they won't raise taxes, but then quickly turn their backs on the taxpayer. The idea of the Pledge is simple enough: Make them put their no-new-taxes rhetoric in writing. By signing the Taxpayer Protection Pledge, candidates and incumbents make a written commitment to oppose any and all tax increases. While ATR has the role of promoting and monitoring the Pledge, the Taxpayer Protection Pledge is made to a candidate's constituents, who deserve to know where candidates stand on the tax issue."
The success of the Pledge has been remarkable. Other advocacy groups have formulated pledges only to discover candidates invincibly opposed to signing even when they agree! Politicians hate to be pinned down even on principles that they claim to passionately support. But Grover's pledge was and is a success.
Norquist, an old friend, is also one of the wittiest, kindest and most effective people in the policy arena. These qualities were on display during his appearance on 60 Minutes almost a decade ago, reprised at Business Insider:
Steve Kroft: But you make it pretty clear. If someone breaks the pledge, you're gonna do everything you can to get rid of them.
Norquist: To educate the voters that they raise taxes. And again, we educate people —
Kroft: To get rid of them.
Norquist: To encourage them to go into another line of work, like shoplifting or bank robbing, where they have to do their own stealing.
Kroft: You've got them by the shorthairs.
Norquist: The voters do. Yeah.
Why is the Pledge so important as to warrant inclusion as the Second Commandment of Capitalism?
First, eliminating tax deductions is a sneaky way of covertly raising taxes. It allows Uncle Sam to take more money out of our pockets without raising tax rates. Taking money out of our pockets is, per Norquist, "like bank robbing," however done. It makes us taxpayers poorer. The Second Commandment of Capitalism does not prohibit eliminating deductions if the money is used to reduce tax rates, checkmating Big Government!
Second, there is a strong consensus in favor of the Pledge, at least among Republicans. Per ATR, 47 Senators (enough to filibuster any proposal to the contrary) and 171, a supermajority, of the 238 Republican representatives in the current Congress, have taken the Pledge. A supermajority already agrees with it and we've codified it! (Constitutional Amendment, anyone? Bring it on, ATR!)
There are many ways that Uncle Sam likes to piously erode, even destroy, us workers' economic security. One is bad monetary policy. (We'll put paid to that with Commandment 6!) Another is bad regulatory policy. (Commandment 9 will constrain that!) Then there's extravagant government spending. (See Commandment 7!) Government's first go-to, however, tends to be onerous taxation. That's what the First, Second, Third and Fourth Commandments are designed to stop.
Governments' addiction to over-tax their people goes back to before the dawn of history. In The Way of Life, written well over 2,000 years ago by Lao Tzu (translation courtesy of Poetry in Translation) says:
The people are starving.
It's because their rulers over-tax them
That the people are starving.
To keep "we the people" from starving it is crucial, and certainly legitimate, to stop our rulers from overtaxing us. The clear-cut, no-fooling-around terms of the ATR Taxpayer Protection Pledge provide important protection. That's why it is the Second Commandment of Capitalism.
Desire prosperity? Demand that our politicos embrace the Ten Commandments of Capitalism, including the ATR Pledge.
Capitalism generates equitable prosperity. Accept no substitutes!
Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $88T. He served as a deputy general counsel in the Reagan White House, has worked closely with the Congress and two cabinet agencies, and has published over a million words on politics and policy in the mainstream media, as a distinguished professional blogger, and as the author of the internationally award-winning cult classic book "The Websters' Dictionary: How to Use the Web to Transform the World." He has served as senior adviser, economics, to APIA as an advocate of the gold standard, senior counselor to the Chamber of Digital Commerce and serves as general counsel to Frax.finance, a stablecoin venture. Read Ralph Benko's Reports — More Here.
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