Anti-tax crusader Grover Norquist threw his weight Thursday behind a congressional effort to allow legal marijuana business to get federal tax breaks.
Norquist, founder of Americans for Tax Reform, the group that pressed congressional Republicans to sign a strict anti-tax pledge, stood alongside Rep. Earl Blumenauer (D-OR) and Rep. Dana Rohrabacher (R-CA), a tea party favorite, at a Thursday press conference to advocate for the change.
At issue is a section of the federal tax code that prohibits business considered drug traffickers from taking basic tax deductions from business expenses. It was added to the tax code back in the 1980s to target large-scale drug cartels, but hasn’t been changed even though 20-plus states have legalized marijuana in some form.Blumenauer has introduced a bill, co-sponsored by Rohrabacher, which would allow legal marijuana business to take the deductions. Norquist endorsed it Thursday. He portrayed the issue as one of tax fairness, something that he said should resonate with anti-tax conservatives.
“Federal tax code is stepping right into the middle of what are legal, legitimate businesses. The power to tax is the power to destroy,” he told reporters. “The government ought not be in the business of picking winners and losers through the tax code. It should be not be enforcing prohibition through the tax code.”
Rohrabacher referenced the Founding Founders and states rights in urging his fellow Republicans to back the change. He has also introduced broader legislation that would require the federal government to respect state marijuana laws, but it has not advanced past the committee stage.
“It is a freedom issue that we do not centralize all power in the federal government,” Rohrabacher told reporters. “I would hope that those of us who talk about states rights on the conservative side of the aisle might get the message and start being a little more consistent.”
Marijuana advocates commended Norquist from speaking out for their cause. They hope that his endorsement will influence members, given his role in helping steer the GOP toward almost impenetrable opposition to taxation in the last few years, despite the fact that some have speculated about Norquist’s lessening influence after several Republicans refused to sign his no-new-taxes pledge last December.
“It means we have a conservative stalwart that Republicans in Congress listen to on the correct side of the issue. I’ve always been confused as to why people think marijuana legalization is a ‘liberal’ issue, or why Republicans are so shy about supporting it,” Dan Riffle, director of federal policies at the Marijuana Policy Project, told TPM in an email. “Having Grover on board just further legitimizes our movement, and goes a long way to make taxing and regulating marijuana a viable conversation in Congress.”
Norquist also sent a letter to House Ways and Means Committee Chairman Dave Camp (R-MI), urging the committee to advance the legislative fix.
A Blumenauer aide acknowledged to TPM that the bill is probably a long shot for the time being, unless it gets folded into broader tax reform legislation.
But Norquist pledged to keep pushing until Congress comes around. His anti-tax bonafides could go a long way toward conservatives skeptical members who might not want to be seen as endorsing pot. The key is reframing the issue for members, Norquist told TPM, so they think of the issue as less about marijuana and more about giving tax breaks to legitimate businesses.
“We’re going to have to talk about the issue 100 times before people stop hearing marijuana and start hearing business tax deductions,” he said. “Then I think we’ll be able to slip it in without anybody feeling they voted for marijuana. But I expect the first four press conferences on the issue to be full of giggles about marijuana and then at some point we have a conversation about tax policy.”
Norquist told reporters that he personally has not smoked marijuana and doesn’t have a position on its legalization, except that states should be allowed to make their own policies on marijuana.