Herman Cain Riding High: Dial 9-9-9 For Nonsense
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
Rep. Cantor: Bought And Paid For By Wall Street Investors
Why has Rep. Eric Cantor (R-VA) been “increasingly concerned about the growing mobs occupying Wall Street,” while defending the Tea Party protests as an organic movement?” It’s all about the money.
Rep. Cantor’s campaign committee and leadership PAC have been bankrolled by Wall Street since he was elected in 2000. The financial industry has been his largest contributor, increasing donations to the congressman by 1,326% between the 2002 and 2010 election cycles.
So while Rep. Cantor may believe the Occupy Wall Street movement is “the pitting of Americans against Americans,” the reality is the movement is pitting Americans against his campaign contributors.
Then, of course, there is Rep. Cantor’s wife, Diana, a fixture on Wall Street. Ms. Cantor served as a VP at Goldman Sachs, a Managing Director at New York Private Bank & Trust, and currently is a partner at Alternative Investment Management, LLC – a firm that “invests mainly in hedge funds and private equity funds.”
According to Open Secrets
Thus far in the 2012 election cycle, Rep. Cantor is the second largest recipient of financial industry donations to House members.
In the 2010 election cycle, he was the third largest recipient of Wall Street cash. In fact, ever since his election to Congress, Rep. Cantor has been in the top 16 recipients of financial industry contributions.
Up to now in the 2012 election cycle, five of Rep. Cantor’s top 10 donors to his campaign committee and leadership PAC were in the financial industry.
Rep. Cantor is currently the second largest recipient of Securities and Investment contributions (which includes hedge funds, private equity and venture capital money).
During the 2010 election cycle, six of Rep. Cantor’s top 10 donors to his campaign committee and leadership PAC were from finance related industries.
During the 2010 election cycle he was the fourth largest recipient of Securities and Investment contributions.
By: PR Watch, Center for Media and Democracy, October 18, 2011
Why Perry’s Backers Won’t Lay Off Romney’s Mormonism
Mitt Romney beats Rick Perry among all Republicans — men, women, young, old — except the “very conservative,” The Wall Street Journal‘s Gerald F. Seib observes. Perhaps that’s why Perry didn’t distance himself too much from Robert Jeffress, the Dallas preacher who called Mormonism a “cult.” And why, as The Daily Beast’s McKay Coppinsreports, another important minister who’s a big backer of Perry has been emailing supporters about the need to start “juxtaposing traditional Christianity to the false God of Mormonism.”
David Lane was in charge of raising money for the national prayer meeting in early August that was the unofficial kickoff to Perry’s presidential campaign. He was among the key Christian leaders who pushed Perry to run, Time‘s Amy Sullivan reports. On October 12, Dick Bott, head of the Chrstian talk Bott Radio Network, emailed Lane that he would be interviewing Jeffress, saying Jeffress was right to question Romney’s faith: “What would anyone think if a candidate were a Scientologist? … Shouldn’t they want to know what the implications were that may flow therefrom?”
On October 13, Lane replied: “Thank you for what you are doing and for your leadership. Getting out Dr. Jeffress message, juxtaposing traditional Christianity to the false god of Mormonism, is very important in the larger scheme of things … We owe Dr. Jeffress a big thank you.”
Coppins says the emails give reason to wonder whether Jeffress’s comments were “a deliberate strategic move by the campaign.” He notes that in other emails, Lane talks about talking with a “key Perry aide” about “the creation of a clarion call to Evangelical pastors and pews is critical and from my perspective is the key to the Primary.”
Lane stood by his comments in an email to “friends” after the story was posted, Real Clear Politics’ Scott Conroy reports. Lane pointed to a story in The New York Times about Romney’s role in his church and how he counseled a young alcoholic “Are you trying to improve, are you trying to do better? And if you are, then you’re a saint.” Lane said that belief was “not Christian.” He continued in his email, “If the secular Press’ bullying over the ‘cult issue’ fails to censor those voices who are calling into question the theological legitimacy of a ‘group sharing belief’ (political correctness for Cult), Romney is going to have to defend his and the Mormon’s ‘bizarre’ Articles of Faith.”
“Polling conducted for the Washington Post and ABC News, Gallup, and the Pew Research Center in recent months has shown between 20 and 25 percent of Americans say they either won’t vote for a Mormon or would be less likely to vote for one,” The Washington Post‘s Aaron Blake writes. Social conservative voters in Iowa — where Perry needs to do well in the caucuses — aren’t likely to vote for Romney. But Mormons were a quarter of the voters in Nevada’s caucuses in 2008; 95 percent of them voted for Romney. Politico’s Maggie Haberman observes that “The surest way for Perry to get a second look is for Romney’s negatives to go up — a fact his supporters seem to realize.” After all, as The Journal’s Seib notes, “60 percent of very conservative voters still say they have overall positive feelings about Mr. Romney.”
What If Working Class Americans Actually Like Occupy Wall Street?
It’s become an article of faith among some on the right, and even among some neutral commentators, that Obama and Dems risk losing the support of blue collar whites in swing states if they dare to whisper a word of praise for Occupy Wall Street.
But what if the opposite is true — what if working class white voters actually like and agree with Occupy Wall Street’s message, if not always with the cultural and personal instincts of its messengers?
The movement is still very young, and it’s very hard to gauge support for it. But one labor official shares with me a very interesting data point: Working America, the affiliate of the AFL-CIO that organizes workers from non-union workplaces, has signed up approximately 25,000 new recruits in the last week alone, thanks largely to the high visibility of the protests.
Karen Nussbaum, the executive director of Working America, tells me that this actually dwarfs their most successful recruiting during the Wisconsin protests. “In so many ways, Wisconsin was a preview of what we’re now seeing,” Nussbaum says. “We thought it was big when we got 20,000 members in a month during the Wisconsin protests. This shows how much bigger this is.”
The cultural fault line and tensions between blue collar whites and liberal activists is a well established storyline in American history. But Working America — which organizes in industrial battlegrounds like Michigan, Wisconsin, Ohio and Pennsylvania and other swing states — is having a new burst of success among precisely the sort of working class voters who are supposed to be culturally alienated by the excesses of the Occupy Wall Street protestors.
Nussbaum says that her organizers report that new recruits often mention the protests in a positive light, even though they have very little in common in cultural terms.
“These are not the folks who normally wear dreadlocks and participate in drum circles,” Nussbaum says. “They’re working class moderates who work as child care employees or in cafeterias or in construction. They’re people who work in lower middle class suburbs around the country.” Pressed on whether the movement’s excesses and lack of a clear agenda risk alienating such voters, Nussbaum said: “We’re proving every day that that’s not the case.”
I don’t want to overstate the case that can be made off of this kind of anecdotal evidence. And I’m sympathetic to the case made by some conservatives that it’s way too early to place stock in polls showing the movement is well received by the public. But as new polling emerges, it will be very interesting to track how it’s received by working class Americans who conservatives insist will be repulsed by it.
At a minimum, the question of whether Occupy Wall Street can forge any kind of meaningful bond with blue collar whites and moderates will be seen by both sides as a crucial one going forward. Nussbaum acknowledges that conservatives might have some success discrediting the movement “if they can change the subject to what the occupiers are wearing.”
“But if we keep the subject on jobs and democracy, we’ll keep those working class moderates in this fight,” she concludes. “It’s crucial that we not let this moment evaporate, and we can do that if we tie the movement to a working class constituency.”
By: Greg Sargent, The Plum Line-The Washington Post, October 17, 2011
Mainers Ask “What Side” Sens. Snowe And Collins Are On
The votes by Maine Republican Senators Olympia Snowe and Susan Collins against the American Jobs Act, which Moody’s Analytics estimated would create nearly 2 million new jobs, have sparked protests in Augusta:
The ongoing series of Wall Street protests moved to Maine’s capital Thursday as about two dozen trade workers, state employees and residents held a rally calling for passage of a federal jobs bill and a new tax to pay for it.
“They got bailed out, we got sold out,” the protesters chanted from under their umbrellas as they left the State House in the rain for the federal building a couple of blocks away to deliver their demands to the offices of U.S. Sens. Olympia Snowe and Susan Collins. Those demands included lists of projects that could be funded in Maine. […]
“Workers like us didn’t crash the economy; Wall Street did,” said Dawn Frank of Oxford, an electrician who has had difficulty finding work. “It’s been rough. It’s been rough for everybody. Let’s get Maine workers like me rebuilding our country.”
Donna Dachs, a retired teacher from Readfield, said the state’s schools, roads, bridges and ports urgently need upgrades.
And the protesters aren’t just unhappy with Wall Street — they want some answers from their senators, too:
The folks here, like Cokie Giles, President of the Maine State Nurses Association, say they want congress to pass legislation to create jobs. “The first one is good jobs with livable wages. There’s a difference between having a job and having livable wages,” Giles said. […]
Senators Olympia Snowe and Susan Collins both voted against the president’s jobs bill earlier this week. A move that angered the people gathered in Augusta. “What we’re gonna do is ask Senators Snowe and Collins what side they’re on. Are they on Wall Street’s side or are they on Main street?” Giles asked the supporters.
That’s a good question — but Snowe has already answered it. In her five-paragraph statement about her vote against the jobs bill, Snowe indicated an objection to only one of the bill’s provisions: the surcharge on adjusted gross income in excess of one million dollars a year, which would affect only one-tenth of one percent of Maine residents.
So it’s pretty clear what side Snowe is on: She sides with the richest one-tenth of one percent of Mainers, and against 99.9 percent of her constituents. It really doesn’t get much clearer than that. But just to drive the point home, Snowe spoke to group of businessmen this morning, where she courageously told themtheir taxes are too high and they are over-regulated. That probably played better with the financial elites who fund her campaigns than with the struggling working-class voters who elect her, but it is neither the problem with the economy nor the solution to its problems. Snowe also backed a balanced budget amendment, which, according to Gus Faucher, Moody’s Analytics’ director of macroeconomics, “is likely to push the economy back into recession.” Naturally, Snowe didn’t explain how she’d balance the budget — she likes to leave the solutions to others.
Jamison Foser, Media Matters, October 14, 2011
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