Make the Trump Tax Cuts Permanent & Rein in the IRS – Leave Us Alone Podcast

In this episode of Leave Us Alone, Grover Norquist, Mike Palicz, and James Erwin break down the Republican Congress’s push to make the Trump tax cuts permanent and restore critical taxpayer protections gutted under the Biden administration. With House leadership urging the Senate to act, the team explains why timing is everything—and why pro-growth provisions like full expensing must be locked in now to jumpstart investment and economic growth.

They also spotlight how red states are leading the way on tax reform, moving aggressively toward flat taxes and even zero income tax. Meanwhile, Congress is fighting back against IRS overreach, including efforts to cut wasteful office space, rein in armed agents, and roll back a Biden-era rule that weakened oversight and opened the door to abuse.

From protecting families and job creators to holding the IRS accountable, this episode is a roadmap for restoring a government that serves—not burdens—taxpayers.

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Transcript:

Grover Norquist: [00:00:00] Welcome to Leave Us Alone, the podcast that champions individual freedom and limited government. I’m Grover Norquist, and today we’re driving into a number of topics, what’s happening at the state level, what’s happening with this budget and reconciliation package and some stupid ideas floating around Congress and back to the states.

Somebody wanna start it off?

Mike Palicz: Sure. Grover. At the federal level today, we had a bit of news in the tax world, and we had a new statement released this morning. By Speaker Johnson, leader Scalise and Whip emer in the house addressed to the Senate and then also joining them as essentially every Republican chairman committee chairman involved in the reconciliation process around tax.

So here’s their statement. House Republicans took the lead and passed a bill to fund the government through the end of the fiscal year. Now our focus returns to delivering President Trump’s full America first agenda. The house is determined to send the president one big, beautiful bill that secures our border.

Keeps taxes low for families and job creators grows. Our economy restores. [00:01:00] American energy dominance brings back peace through strength and makes government more efficient and more accountable to the American people. We took the first step to accomplish that by passing a budget resolution weeks ago, and we look forward to the Senate joining us and this commitment to ensure we enact President Trump’s full agenda as quickly as possible.

The American people gave us a mandate and we must act on it. We encourage our Senate colleagues to take up the house budget resolution. When they return to Washington, this is our opportunity to deliver what will be one of the most consequential pieces of legislation in the history of our nation working together.

We will get it done. So I think that’s a, a new step from the House really urging the Senate here to pick up their product. There are some key differences in the discussion going around the house budget did have a smaller tax instruction to the ways and means committee than the both leadership and chairman Jason Smith had been pushing for.

We saw in the reaction immediately after the house budget passed that we had Senate Finance members went and put out a letter saying they would only support a package that had permanency [00:02:00] for the Trump tax cuts. And we still have this lingering question of will they be able to use an appropriate.

Current policy baseline, which reflects the reality of this that, Americans are about to face a historic tax increase,

Grover Norquist: but people should understand sometimes grove over here. People should understand that in the past people have said the parliamentarian gets to decide what can and can’t be put on the floor.

But at the end of the day, the Senate budget chairman can tell the parliamentarian I insist on this. So the question of. Can you get the parliamentarian to cheerfully agree to allow for permanency that we work off of present policy, which means you don’t have to replace all of the tax cut. You assume it’s still, most of it’s still there.

Grover,

Mike Palicz: you mean it’s the case that there isn’t one person who acts as an oracle for the entire Congress and the lawmakers themselves have a say?

Grover Norquist: It’s always been the default position when somebody tells you can’t have what you want as well. The parliamentarian won’t let us do that. This is [00:03:00] such a big item that I don’t think they could allow the parliamentarian to stop it.

And again, this is the position that was taken by Obama, so it’s not some radical Trump upsetting the apple cart again that people like to whine about. This is in fact something that Obama said, this is what I want to do as well. In the past

Mike Palicz: And in, in terms of the, this new statement coming out from the house today, I think unsurprising to see that the house calling on the Senate to take up their bill.

But Grover, just the overall sense of Congress does need to get moving on tax right now. Kinda how do you see the urgency here on tax?

Grover Norquist: I’m more urgent than the house is. It needs to move now. And it, as the president said, it needs to start taking effect January 20th of this year so that every, we need to say a hundred times a day to every business.

If you’re planning on investing, understand we’re gonna make the Trump tax cut permanent. We’re going to restore that part of the Trump tax [00:04:00] cut that began to evaporate full expensing tax credits for investment. Those will be there. Don’t wait for us to pass the bill thinking. That the tax credits won’t be restored or the tax full expensing won’t be restored until we vote it, it will be restored to take effect.

I like January 1st, I guess for trumpet. The world started on January 20th, not January 1st, but that is very important that businesses know soon that, that those tax credits, those that expensing for investment is there, then people can make decisions on investing. Otherwise, it’s very wise to wait. A few months, six months, a year, two years before you act.

And that means we don’t get the growth we need going into the election of 26 in November and we lost the house the last time. We didn’t move quickly enough.

Mike Palicz: Yeah, I think that’s exactly right. I think you made a key point that President Trump understands as well and was part of his not state of the Union, state of the Union address [00:05:00] earlier this month.

Which is, I think there’s this wrong attitude with some lawmakers that. Oh the tax cuts, they don’t really expire until the end of the year. That’s not true for actually the most pro-growth parts of this bill. The cost recovery provisions, things like expensing and bonus depreciation in research and development expensing, these are all parts of the tax that are phasing out actively getting worse that we need to address now.

And Trump made that clear with his call to have them start, in January of 2025, not at the end of the year. And I think you run into this situation of concern, which is. If the tax bill slips to the fall, you’ll see lawmakers say we can just keep the cost of the bill lower by not having these provisions kick into 2026.

We don’t need to go back and have it apply at the beginning of this year. That’s wrong. You lose the growth of this year.

Grover Norquist: What concerned me about the statement that you read from house leadership was we need to continue, we need to protect the tax cuts we have Was the statement instead of we need to cut more taxes.

That tells me that in their mind they don’t see a [00:06:00] lot of room to take the corporate rate to 15.

Mike Palicz: And that’s something that President Trump campaigned on. I think it’s the most pro-growth option he’s put on the table. Grover, can you go through a little bit about just, who it is that actually pays the corporate rate and, does it exist so Democrats can hide the ball and who pays taxes?

Grover Norquist: Yes. President Reagan made the comment that the proper number for the corporate income tax is zero because it’s all paid by workers and lower wages. Consumers in higher prices and people who are saving for the future for their retirement, their pensions when price, if the stock of the price of the stock goes down because you’ve damaged the company enough with higher taxes, there is no Mr.

General Motors. There is no Mr. Coca-Cola writing checks. These are companies that collect taxes when you buy something at the grocery store. The grocery store collects money from you from which it pays taxes. What it could do is [00:07:00] give their own workers a raise or hire another three workers. But if you take a million dollars away from them, they can’t hire more workers and they can’t give people pay increases.

So the biggest hit is on workers having lower wages and fewer workers employed. Most Americans actually know that. But the people who play the populist game think if they say it a hundred times, that somehow businesses actually will pay those taxes. Democrats love the corporate income tax ’cause it’s a way to tax consumers, but you don’t have to have a sales tax that you get yelled at for.

It’s a way to tax workers. But it’s not a social security tax or income tax, which you get yelled at for it, it’s paid mysteriously or miraculously by the company, by a building, perhaps by the incorporation papers pay for this. Who’s paying for this? We are,

Mike Palicz: and Trump has really, when talking about going to a 15% lower rate, he really hammers the importance of American competitiveness about bringing [00:08:00] things like our manufacturing, domestic production.

Back inside the US a key part of the 2017 Trump tax cuts when we took the corporate rate from 35 to 21% was effectively we ended the corporate inversion. The idea of American companies leaving and headquartering abroad for tax purposes that stopped. There hasn’t been a single corporate inversion since the Trump tax cuts passed.

I think that’s a huge story and obviously part of the president’s mission about increasing production here in the United States.

James Erwin: I believe I recall a wise man once saying in front of me that we can compete with China and the rest of the world in lower wages, or we can, excuse me, we can compete with them on lower taxes and less regulation.

Grover Norquist: Yep. And we should, you might be in this room actually, but Yes. And I vote to competing by having lower taxes than China, not higher taxes, which we’re pretty, even with China right now and the corporate income tax. But if you’re in a state with a high state corporate income tax. You’re taxed worse than China,

James Erwin: which is an excellent transition [00:09:00] to what’s going on in the states with taxes

Grover Norquist: progress.

There are eight states, eight of the 50 states at zero. There are 15 states at with a single rate tax, a grad, not a graduated or progressive income tax, but a flat rate tax. Seven of those are in the last five years. We’ve been working at Americans for tax reform very hard. To get more states to move to a single rate tax.

Right now as we speak, they’re in the process of passing this bill in to, to go to a single rate tax in Kansas. We just a month ago passed going to a single rate tax in Louisiana and then it will automatically go down to zero. So it will become perhaps the ninth state at zero. And we also saw real progress in Mississippi where they voted a bill, which will face it down to zero over the next 15 years.

Longer time but with certainty. Boom boom. It goes down. I walk out of this room and hop on a plane and go to South Carolina to meet with the governor who is committed to going to zero, as well [00:10:00] as the state legislature. And they’re looking to go first to a single rate tax of about 3.9 or so and then to zero.

Mike Palicz: Grover. What do you think that has as, as we’re at the federal level having a discussion on tax right now? What should be the main takeaway for Republicans about what’s what. Red states are doing at the state level?

Grover Norquist: Red states, all red states, with the exception of Nebraska, where their governor is thinking of raising taxes.

All the other red states are cutting taxes. And again, 10 of them, 10 to 12 are saying out loud, we are going to cut the income tax. But this is step one to abolition. We are going to go to zero. And some of them are making it. Automatic all the way to zero. So the message is, states understand that lower tax states are more competitive.

People leave California, they go to Texas. They do not leave California and go to Texas because of the weather, because nobody leaves California ’cause of the weather. And nobody goes to Texas because of the weather, but they [00:11:00] have lower taxes. And think of it internationally, where do people move their money, their investment, the jobs they create, they move them to low tax countries.

So the United States needs a national tax that is lower than the rest of the world. Just as each state gets the joke that if I have lower taxes than the state next to me or the state on the other side of the continent I will attract more people. But again, before. The people move, they first move their money.

New Yorkers are investing in things being built and designed in Florida and Texas. Then they follow their money and go to visit it, their investment money. So both people and workers move to low tax states and low tax countries.

James Erwin: And if you think about just the banking sector, which is a major presence in New York, it’s all the center of gravity is really moving to Dallas.

That’s a one really good example. It’s a city in a state with no income [00:12:00] tax with very cheap energy and plentiful, abundant land. It’s on a flat plane. Texas is flat and few places actually where you can pretty easily build cheap housing and it’s much more affordable for the workers who move from New York to Dallas to live there.

And it’s much easier for the banks to do business there.

Grover Norquist: Yeah. And you can. Call your grandparents on the phone

Mike Palicz: and we’ll have to pull the clip. Grover, you’ll love this. If we don’t have it available for this week, we’ll have to play it next week. But this weekend on Bill Maher show. Him and Ezra Klein, who is the editor of Vox or formerly with Vox, big liberal editor they were bemoaning the point about people leaving blue states for red states.

Because of less regulation, less government, and lower taxes, and essentially saying, is this the end of the Democrat party? And the point that they run through is by 2030 when we have our new census for presidential elections, after this, Democrats would be able to win states that Kamala Harris lost, like Wisconsin, [00:13:00] Pennsylvania, and Michigan, and those three states wouldn’t be enough to put a Democrat over the threshold even winning them to become president because of the change of electoral map.

From people leaving from blue states to red states. So you see this state level impact in the long-term coalition really having an impact.

Grover Norquist: Two thirds of Republican governors have signed the pledge never to raise taxes. Many state legislators, republicans, all have signed the pledge never to raise taxes.

There is an understanding at the state level as well as at the national level of the importance of the tax issue and how it is a line in the sand that one does not cross. You cross it at your peril. George Herbert Walker Bush raised taxes and got thrown out. He lost to a nobody out of Arkansas.

Arkansas wasn’t even technically a state back then. And yet you have, here you have Bush deciding to throw. He wins the Cold War. Okay. He kicks Sadam Hussein out of Iraq, out of out of Kuwait, back into [00:14:00] Iraq. I knew it was one of those countries and reasonably. Successful presidency wins Cold War, except he raises taxes.

Okay. So on his tombstone, instead of hero of winning Cold War it says, liar raise taxes. That’s not what you want on your tombstone.

James Erwin: And this is after he had already beaten Bob Dole in the primary Yes. For president who did not sign the pledge

Grover Norquist: using the tax issue, the pledge, and that I won’t raise taxes.

He will. He was 13, 14 points down. The day he had the Republican convention. Where he gave the speech about how the Democrats will keep asking me to raise taxes and I will say no. And he forgot the third. No.

James Erwin: And while you take a break from packing your U-Haul to move from California to Texas, just a quick reminder that if you’re enjoying the conversation, take a moment to rate and review.

Leave us alone on your favorite podcast platform. It helps us reach more listeners who care about freedom. And don’t forget to share this episode with friends who value Liberty. Now back to the discussion. And James, you had some. [00:15:00]

Grover Norquist: Cheerful or un cheerful news from the states.

James Erwin: Oh, very un cheerful. But so while a lot of red states you’re talking about are doing very well on tax policy, including Arkansas, by the way, which is now a state.

Yes. We have some there is a federal bill I. That is being replicated by these copycat bills at the state level that will be very bad for business and undo a lot of the gains we’re talking about here, or at least threaten them to some extent. And I’m talking of course, about the Credit Card Competition Act.

This is the brainchild of Dick Durbin, who is the Democrat with in the Senate. This is the guy that we didn’t really get into Chuck Schumer, but he’s been on a, an I’m not quitting tour for the last week or so. This is this is the guy that he managed. That Schumer managed to out Fox for leadership like 10 years ago or whatever.

When Harry Reid retired so he’s been hanging around. He’s pushing 80 years old now. Unclear whether he’s gonna run for reelection and he keeps trotting out similarly tired old ideas. One of them is price controls for credit cards and in. In the case of the Credit Card Competition Act, it’s specifically trying to prohibit [00:16:00] interchange fees.

And these are the one to 3% fees that are charged on credit card transactions by the networks. And they’re useful for several reasons, but first of all, I just wanna talk about the premise of the bill. The premise is that there are two major networks, visa and MasterCard that control most of the market.

There’s actually a third Discover, which is the third largest, which happens to be head Courtney in Illinois. Which is Durban’s home state conveniently and also conveniently, they do not charge interchange fees. So the motivation behind this is actually pretty, like directly corrupt one from Durban’s Mo Durban’s point of view.

But more importantly, the premise that there needs to be more competition in the credit card space because of these dominant networks, is actually a fundamentally flawed assumption because. Credit cards only really work when you have a network that lots and lots of people are using, all the banks have to trust the network and consumers have to actually be, there have to be millions of consumers using the same network and millions of small businesses and large businesses using the same network.

An economy of scale is required for any of this to [00:17:00] even function in the first place. ’cause you have to have a trusted intermediary that’s facilitating the exchange of credit and the reconcili reconciliation of the spending with the bank at the end of the day. Really the idea that you need to break up these networks as if they’re monopolies is not really true.

They’re facilitators of transactions between banks, businesses, and consumers. So that’s the first part. But the second part is that the interchange fees that they charge are what fund rewards programs for credit cards. So a lot of airlines, for example, have effectively, I mean they become credit card companies that offer rewards programs that give you miles the more you use their cards.

This is a perfectly. Legitimate business and it seems to work very well and consumers seem to like it. The rewards you can get in discounted items at the store. There’s all kinds of things, all kinds of benefits to rewards programs and a lot of people do very well for themselves, taking advantage of these programs.

It also is what pays for the cybersecurity and for the general financial security of the network. So these [00:18:00] large networks that are necessary to facilitate the transactions. Their scale is also necessary to ensure the security of the transactions because little startups are more prone to have these com to compromise your data.

Perfectly fine if you want to use them, but at the end of the day, most people wanna, rever, want to default to a more trusted network with a proven track record of protecting consumer data. It costs money to do these things. And so they have to charge a small fee on top of the transaction that, that you have with the store that enables them to be able to fund these programs.

So there’s a lot of direct benefit to consumers that, that come from these charges. But in additional, I just wanna put a little historical perspective on this. The idea that you have to pay a one to 3% premium on your. Transaction in order to facilitate it is extremely low. But historically speaking, the example we like to use is that the Pony Express for the nine months it was in operation to send a Check Coast to coast or across the plains, they charged a 25% fee.[00:19:00]

To facilitate that transaction. Now, granted, a little electronic signal that goes through a the internet basically to between banks is much safer than a guy on a pony who’s gonna get attacked by the Comanches. He rides across Oklahoma or Liberty violence, robbing the stage or whatever.

But because of technology, the fee is a much, much lower percentage of the amount of money you’re trying to transact with each purchase. And it’s actually relatively minor in the scheme of things. And to pay that small premium in order to ensure that the transaction actually works and that the networks are actually competent at facilitating commerce is a perfectly reasonable fee for service.

So the idea that the government would intervene in these arrangements when there are historically low rates, when they’re necessary for rewards programs, and when they ensure the security of the network in order to benefit. The competitor to the two major networks who are large because we need the economy of scale for it to function is a really idiotic idea [00:20:00] that should not be replicated beyond the federal level.

So the Credit Card Competition Act was introduced a couple of times. It never passed. They keep threatening to reintroduce it. I keep hearing it’s gonna be today. I heard it was gonna be today, earlier today. This is. Monday, what is it? March 21st, 24th. 24th. Act of time’s really flying by. So Monday, March 24th, we’re recording this.

It still hasn’t come up, but it could be any day now. I hear they’re having trouble behind the scenes getting people to get on board with this bill because we’ve done a lot to raise awareness about the potential downfall, downsides of it. So that’s a good sign. But this, they’re not gonna give up on the federal level.

And unfortunately, there are some people who have gotten the idea that this might be good at the state level. Illinois is the state that led the charge in this. They did already pass a copycat bill at the state level. And they’re currently in court fighting to keep the law because there’s several grounds on which the networks and the banks were able to sue.

One of them was that Illinois did not have jurisdiction to regulate the transactions of big national banks or national networks Because it’s interstate commerce and a district, a federal district court did [00:21:00] rule that Illinois could not regulate large banks. And so therefore, as it stands, while it’s still being litigated, the Illinois state law only applies to state banks and local community banks in Illinois.

So that means that if a state does decide to copy this legislation, this bad idea, for all the other reasons, specifically at the state level, there’s an extra bad reason, which is that you will only disadvantage your state and local institutions against the big players who have the economy of scaled to operate nationally.

Grover Norquist: Then why is one not in favor of three or four states doing just that so we can watch them fail?

James Erwin: I think

Grover Norquist: we have, I don’t want everybody to do it, but I’d three or four people to walk into traffic to teach the other kids not to do that.

James Erwin: I hopefully we’ll get away with just one Illinois doing it for us, so we don’t have to go any further than this.

But the main point here is that there are many other states. Idaho is considering a bill. Georgia was. Many of these have already. Arizona was, they’ve already been discarded. They’ve already basically been stopped. We don’t want any more states like those copying this idea. Just let [00:22:00] Illinois do it on their own.

Let’s see where the courts ultimately leave the bill, how bad it is in its final form. And then we can use that as the example of what not to do.

Grover Norquist: Okay. That’s a good compromise.

Mike Palicz: Should we switch to some IRS bashing now? Yes. Okay, great. The latest thing the left is upset with Doge about is that Doge is going after unneeded IRS office space.

At a TR, we’ve put out a post highlighting that, of course Doge is right on this. That the IRS has far more building space and waste millions, tens of millions, hundreds of millions of taxpayer dollars on frivolous things that they don’t need. So what we’ve done is we’ve pulled Biden Era Treasury Inspector General Reports, and post that atr.org.

Some of these include tta, finding the Treasury Inspector General, finding that. In 2023, more than one half of IRS buildings had a workstation occupancy rate of 50% or less. This is due in part to the increased use of telework and remote work. Which requires less space per employee. Additionally, the IRS lacks a [00:23:00] long-term space reduction plan that clearly specifies the space reductions it expects to achieve annually beyond 2026 and how it will sufficiently decrease its unneeded office space elsewhere.

The Inspector General said the federal government’s continuing struggle with excess and underuse space. Has needlessly cost taxpayers millions of dollars. So Grover is, doe’s right to be focusing on IRS issues and trying to reduce their workspace.

Grover Norquist: Yes. And it, of course, it’s not just the IRS a lot of empty space here in DC and around the country.

The administration, Trump administration has been looking at selling several hundred. Significantly sized buildings because they, there is so much empty space and, empty space costs money. ’cause one, you could be selling the building. Two, you’ve gotta heat the building. You have to security for the building there.

The cleaners come through, even though you know there’s that much to do. Buildings are expensive and they ought not to have bunches of empty space. They discovered this sort of thing when Reagan came in and they were able to [00:24:00] consolidate a number of, different buildings, but right now it’s gotten much worse because so many people work from home.

And

James Erwin: a quick question. So you remember all those guns they bought a couple years ago that they said they really needed? Yes. Like hundreds of thousands or whatever. How many of these employees who never show up were armed and are the ones just in the office armed? Are they these guns sitting around in these empty desks?

Or what’s going on with that? There was

Grover Norquist: 6 million rounds of ammunition. I don’t know what they did with that. Must be at the IRS

James Erwin: must. They must be in the empty desks.

Mike Palicz: Of course the fun fact too was that one of these inspector general reports found that IRS employees accidentally discharged their fire their side arm more than they meant to intentionally fire them.

Which I think gives us a pretty good indication that these people do not need to be armed. I think the public is shocked to learn that there are. Our armed IRS agents especially when they learn that they’re by the thousands

James Erwin: armed, they really give Officer Preki a run for his money, for our wire fans listening.

Mike Palicz: So we do have a bit of good news at attempts to reign in the IRS though and that’s [00:25:00] legislation introduced by Congressman Glenn Grothman of Wisconsin. His CRA to nullify a Biden era IRS rule that significantly weakened taxpayer protections. What this Biden rule essentially did was. Rather than IRS employees as previously was the case, have to go to their direct supervisor for seeking new taxpayer information.

Essentially, when they’re looking to audit you, but they wanna request more information on you, they were allowed to essentially shop for one supervisor in the building and go to them. So essentially you got one guy who has a rubber stamp who you know will always say yes. That’s the guy you go to.

Grover Norquist: One, one of the things Doge wanted to do was to go in some of the IRS.

Data to find out whether that matched with other zones. Other areas were people getting two or three checks from small business administration or something else, and they were attacked because these unelected people were gonna look at somebody’s tax return. In most cases, the names would be redacted, but there might be some cases where you’d actually want to check the name to see if the same person was paying taxes.

That was getting some [00:26:00] benefits. What ended up happening is they were screaming, you can’t do that. Somebody put out the fact that over 900 people at the IRS can look at any data there, including unmasked, meaning your name, your address, and your social security number and everything. 20 of whom were unpaid volunteers.

All of them unelected, elected to nothing, and they wanted to argue that these guys coming in would somehow endanger the whole project line we have. We don’t need 900 people. Able to do this any day of the week that they want to. But it’s probably a good idea to check IRS data against other data to find out whether people getting checks are one person or two people.

Mike Palicz: And when we’re talking about something like what Democrats just did to weaken this rule, you’ve got, essentially the idea is to make it easier for IRS bureaucrats to levy substantial fines and penalties on taxpayers. So we’re of course, urging all lawmakers to support the repeal of this Biden rule.

But this was a significant weakening of taxpayer [00:27:00] protections put in place in the late nineties by bipartisan Congress. Essentially what they had put was that, no penalty shall be inces unless the initial determination of an assessment is personally approved in writing by the immediate supervisor of the individual making such determination.

Or such higher level official as the secretary may designate. So what you had as Democrats for two decades tried to repeal this law, failed to do it, had the Biden IRS come out and redefine definitions to run around this. And so this CRA put forward by Congressman Grothman would fully nullify this Biden rule, restore those taxpayer protections an a TR and a coalition of two two dozen conservative organizations.

Send a letter. Last week urging the house to take up this CRA I hope they do.

Grover Norquist: Excellent. Hopefully we can. That’s it for today, folks for this episode of Leave Us Alone. Thank you for tuning in. If you found this discussion valuable, please rate, review and share the podcast. It helps us reach more [00:28:00] Freedom loving listeners, and we’ll be back next time with more insights on protecting your liberty.

Until then, I’m Grover Norquist reminding you to cherish your freedom and keep pushing for a government that leaves us alone.