The president-elect’s promise to oppose any and all tax hikes was made in writing. In public. Visibly. Undeniably. And it was noticed.
The president-elect’s promise to oppose any and all tax hikes was made in writing. In public. Visibly. Undeniably. And it was noticed.
T he election of Javier Milei to the presidency of Argentina highlights the enduring and universal political power of the tax issue. Milei pledged to cut off his own arm if he ever raised taxes, and he did the impossible: He defeated the Peronist party that had dominated Argentina for decades.
Taxes can be a powerful issue when center-right parties and candidates focus on how much of citizens’ time and lives are consumed by the government. But “right of center” governments in Poland, Brazil, Spain, and even Israel have performed poorly when an issue of the day has overshadowed the cost of the state.
There was every reason to believe that yet another Argentine reform campaign would fail. Argentina has had many challenges: Strikes, tariffs, debt, politicized subsidies, and yet the Peronists have held onto power despite obvious corruption, economic failure, financial collapse, and debt repudiation.
But this election was different.
The limited-government opposition candidate Milei went on national television as a candidate for national deputy (a member of the lower house of the Argentine legislature) on August 16, 2021, on the Viviana con Vos program on channel A24, and signed a written pledge: “Do not create or increase taxes and work to reduce them.”
The promise to oppose any and all tax hikes was made in writing. In public. Visibly. Undeniably. It was noticed.
Holding up the signed pledge and looking directly into the camera, he said: “If I raise a tax, I’m going to cut off my arm.”
Argentina has long been one of the world’s most heavily taxed countries. One would think that convincing politicians to promise tax cuts would be easy, but it took a movement. The Argentine Taxpayers Association (ATA) began its journey well before Milei’s party La Libertad Avanza (Freedom Moves Forward) existed, and even though the ATA had previously scored legislative victories to lower taxes, the majority of politicians remained skeptical.
In 2019, the ATA introduced the Taxpayer Protection Pledge, which many national deputies committed to defending the taxpayers signed. But it was not until Milei signed it on national television that the issue exploded.
What happened after Milei’s pledge was something unthinkable: The main opposition party of former president Mauricio Macri, Juntos por el Cambio (Together for Change), was forced to compete with Milei over this issue, and it also pledged not to increase taxes. A bloc emerged composed of deputies opposed to tax increases.
This situation generated a sea change in Argentina’s legislature and effectively stopped the entire agenda of Peronist president Alberto Fernández, who sought to create more taxes to finance even higher public spending. The Peronist government declared: “During the campaign there was a commitment not to raise taxes that was achieved by the majority in congress,” recognizing that the chances of a tax bill’s passing the first step in the lower chamber was practically zero.
That signing of the Taxpayer Protection Pledge prevented $4 billion in planned tax increases in Argentina, and taxes became the dominant issue.
This mirrors the success that Republicans in the United States have had by focusing attention on taxes through their candidates’ signing and keeping the Taxpayer Protection Pledge created in 1985. How big a success? In the 62 years between 1932 and 1994, Republicans controlled Congress for only four years. Two years under Truman. Two years under Eisenhower.
But ever since 1994, when the vast majority of Republican candidates signed and kept the pledge, the GOP has won control of Congress fully half the time. As the party that would not raise taxes, the Republicans became competitive on the national level after having spent 62 years as tax collectors for the welfare state and, electorally, as the Washington Generals to the Democrats’ Harlem Globetrotters.
George H. W. Bush thrice made the power of the tax issue clear.
Bush showed that Ronald Reagan’s tax-cutting wins were not personal when, in 1988, he scored a primary victory over tax-hike-friendly senator Robert Dole, who that year would not join Bush and all the other Republican candidates in signing the Taxpayer Protection Pledge. (Dole would sign the pledge years later, during his 1996 presidential run.) Bush vowed, “Read my lips: No new taxes,” at the 1988 Republican Convention, when he was 14 points behind Massachusetts governor Michael Dukakis. He went on to defeat Dukakis handily, winning 40 states to Dukakis’s ten.
But, having betrayed his pledge and raised taxes in 1990, Bush lost the presidency in 1992 to a little-known governor of Arkansas. Bush had driven Iraq out of Kuwait without getting bogged down, and managed the collapse of the Soviet Union, only to lose it all by raising taxes.
His tax hikes managed to even overshadow his victory in the Cold War.
Argentina’s Milei was an outsider’s outsider when he began his campaign to defeat Peronism. His campaign accelerated when he dramatically signed the tax pledge. His campaign logo was a chainsaw, which he promised to take to big government.
Just two years after having first signed the pledge and having publicly put the tax issue front and center, National Deputy Javier Milei won election as the new president of Argentina.
Grover Norquist is the president of Americans for Tax Reform. Jonas Torrico is the president of the Argentine Taxpayers Association.