Herman Cain is riding high in the polls. Among other things, his ascent is based upon a charming sense of humour, rousing oratorical skills, a story of moderate achievement in business, zero experience in elected office, which has allowed him to mould a perfectly zeitgest-matching conservative platform untainted by a record of no-longer zeitgest-matching political decisions, and, finally, the bold, clear proposition of the 9-9-9 tax plan. Now that Mr Cain is having a moment in the sun, what had seemed a gimmicky ploy is undergoing serious scrutiny, and we can expect Mr Cain to get hammered on the details of the 9-9-9 plan in tomorrow night’s Republican debate.
Mr Cain touts the simplicity of the 9-9-9 plan, but it is anything but simple. Even after reading about it on Mr Cain’s campaign site, I’m still not sure I understand it. I thought I knew that the plan proposed 9% income, sales, and corporate tax rates. But the corporate tax is not a simple reduction in the corporate tax rate, as I had thought, but a value-added-tax on “Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports.” Anyway, the 9-9-9 plan is not what Mr Cain ultimately has in mind for American tax policy. It is but the first step of a two-step process to replace most federal taxes with a 30% national sales tax, a version of the so-called “Fair Tax”. Why not go directly to the Fair Tax, then? Why the transitional step? Mr Cain’s statement doesn’t really say, though it does seem to imply that the Fair Tax is at present too unpopular to implement. “Amidst a backdrop of the economic renewal created by the 9-9-9 Plan,” Mr Cain says “I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.”
Mike Huckabee, a Fox News presenter and former governor of Arkansas, plumped for the Fair Tax during the 2008 race for the Republican nomination and the plan came in for a lot of abuse by economists and commentators across the ideological continuum. Perhaps Mr Huckabee’s failure to get far with the Fair Tax explains Mr Cain’s choice to campaign on an altogether different tax plan. Perhaps the idea is that he can capture the allegiance of the Fair Tax’s many conservative fans while ducking the criticisms of the Fair Tax by pushing a fresh plan with a catchy name implying super-low rates. But this can only work if (a) the media and Mr Cain’s competition let him get away with advocating the Fair Tax while running on his transitional plan, and (b) the transitional plan stands up to scrutiny better than the Fair Tax has. And this seems unlikely.
The National Review today ran a blistering critique of Mr Cain’s 9-9-9 plan. A selection:
This tripartite scheme makes for a succinct slogan but has little else to recommend it. In particular Cain’s inability to choose between a sales tax and a VAT is puzzling. The two are very similar in their economic effects. The chief advantage of the sales tax over a VAT is that the latter is considered easier for governments to raise, because it is hidden. The chief advantage of the VAT over the sales tax is that it is easier to enforce without stimulating black markets. (Another is that it reduces the risk of taxing business-to-business purchases.) Opting for both as a transitional step means courting the danger of a VAT with none of its rewards: In the first stage, the government would get a new money machine, and in the second it would supposedly destroy that machine and opt for something hard to enforce.
The two-stage scheme is self-defeating in another respect as well. The 30 percent national sales tax, whatever its other merits, would be significantly softer on the poor than the 9-9-9 transitional step, since the larger sales tax includes a “prebate” check to all Americans to exempt the basic necessities of life from being taxed, while 9-9-9 includes no similar provision. Leaving aside whether a major tax increase on people at the bottom of the income scale is a good idea, what is the point of first raising their taxes and then cutting them?
In the last debate, only Rick Santorum noted that Mr Cain’s plan involves the danger of even temporarily handing the government “a new money machine”, a point one would expect to resonate with conservative voters. I expect we’ll hear a lot more of this line of argument in upcoming debates. More generally, the fact that Mr Cain apparently believes it is politically feasible to wipe out the entire status-quo federal tax system in order to move to the 9-9-9 scheme, and then wipe out the entire 9-9-9 scheme in order move to a 30% national sales tax seems to me to draw attention to Mr Cain’s policy inexperience and dazzling political naivete.
That the 9-9-9 plan would cut taxes on the rich while raising them on the poor led Bruce Bartlett to call the proposal “a distributional monstrosity”, a phrase you could imagine Barack Obama using to good effect in a general election. Why would you propose to raise taxes on the poor, making yourself vulnerable to charges of monstrous callousness, when, as the NR editors note, your ultimate plan would only cut them later? Well, you wouldn’t, if you knew what you were doing. It requires only superficial examination to see that Mr Cain’s 9-9-9/Fair Tax scheme is more an ill-considered, hand-waving improvisation than a serious plan from a serious policymaker. He’s winging it, which I supposed makes it all the more impressive that he’s been able to wing it all the way to preeminence in a few polls. But now he’s made himself a target, and an easy one at that, so I doubt Mr Cain will wing it all the way to the nomination.
By: Will Wilkerson, Democracy in America, October 17, 2011
When Herman Cain said he was on the GOP panel of candidates for the presidency for comic relief, I laughed, because I thought “this guy’s a joke.” But he isn’t. The polls show he is gaining more and more acceptance and popularity among those on the right; and, the facts show, this man is dangerous.
Let’s start with Mr. Cain’s racism. I believe he is a bigot.
From saying that a Muslim would have to go through certain requirements to ensure he or she isn’t a terrorist to work for him, to stating that communities should be able to ban mosques from their cities and towns, Cain has made several bigoted statements.
I am sure that the Reverend Dr. Martin Luther King Jr. would roll in his grave listening to Mr. Cain’s remarks. And Mr. Cain forgets where he came from. He grew up in the segregated, racist South. Has Mr. Cain looked in the mirror lately?
Or how about glancing at our Constitution? Dr. King gave his life for to ensure the civil rights for all Americans, Muslims included. And how about that First Amendment? You remember that one, something about religious freedom for all?! Hmmm.
Having a Muslim prove he isn’t a terrorist is as bigoted as requiring a black man (like Cain) prove he isn’t lazy, living on welfare, and father to numerous children with different mothers. Both are disgusting negative stereotypes and are not true.
Oh yes, I know, Mr. Cain apologized to the Muslim community; like Mel Gibson apologized to the Jewish community. An apology doesn’t change one’s heart nor one’s prejudices.
And speaking of bigotry, how about toward his own community, African-Americans?
His 9-9-9 plan makes me want to call 9-1-1!
This plan benefits the rich and places the tax burden on the middle and lower income families in America; the African-American community would be hit especially hard.
Let’s look at a few of the problems with the 9-9-9 plan, shall we?
- Capital Gains: This would ensure that a large portion of the rich’s income would essentially go untaxed. Middle and lower income families do not have the resources to invest and benefit from this tax break.
- Cutting the federal budget by 70 percent: The federal government is one of the largest employers in the United States. How many people would lose their jobs as a result of this?
- Does the 9 percent apply to purchasing homes? Stocks? What about businesses?
- Where’s the math to prove that this would work?
- When it comes to sales tax, this would amount to a tax increase for the middle, lower, and poorer income levels in America.
Herman Cain says on his website that he has top economists and well known people who back the 9-9-9 plan and can speak to its merit; yet he refuses to list them.
A vote for Herman Cain, in my opinion, is a vote for moving backward. Back before our civil rights laws, perhaps even before the First Amendment, as Mr. Cain has repeatedly dodged the question regarding former Gov. Mitt Romney’s Mormon religion being a cult or not Christian.
The bottom line is, if you want to be commander in chief of this country, you need to be able to make decisions to benefit all of this country: black, white and yes, Muslim. Oh, and Mr. Perry, that means Mormons as well.
By: Leslie Marshall, U. S. News and Woeld Report, October 12, 2011