Skip to comments.Reagan Economist Breaks Down Cain's 999 Plan (Art Laffer)
Posted on 10/13/2011 7:21:17 PM PDT by justsaynomore
Reagan Economist Breaks Down Cain's 999 Plan (Art Laffer)
(Excerpt) Read more at video.foxnews.com ...
It’s a good interview. Art emphasized that this 9-9-9 tax structure lowers rates, broadens the tax base (more poeple pay taxes) and eliminates the loopholes (where some pay no taxes but should!).
He also said there is no way to prevent future politicians from raising taxes. That, in my opinion, is where the voters have the responsibility to ascertain that NO big spenders are sent to Congress.
Pinging the Cainiacs (and friends)!
Tennessee FReepers - please post the following to your board:
Herman Cain to revisit local roots, Memphis-born Republican to speak in Bartlett
Cain Economic Advisor: 9-9-9 Plan to Add $2 Trillion to GDP
Cains 9-9-9 tax plan hits poor, helps wealthy, experts say
How is Herman Cains 9-9-9 like SimCity? (Media puts it’s desperation on full display)
The Lean Campaign Machine of Herman Cain
Updated: Barbour says wife would vote for Cain if primary was held today
Fact Check! Herman Cains Ice Cream Meltdown (BARF alert!!!)
Note to Herman Cain: Please be a little more flexible with 9-9-9
Herman Cain to Blacks: Divorce the Democratic Party
Cain: Time for me to be a job creator (Campaign now expanding new staff for NH and Iowa)
Haley Barbour: Herman Cain would sweep the South
Herman Cain to meet with Arpaio
Paul Ryan loves Herman Cains 9-9-9 tax plan
Art Laffer endorses Herman Cains 999 plan
Top Rubio Staffer Reportedly Pushed for Early Florida Primary to Help Romney
Interesting. Thanks for posting. $top $pending.
Which is why before anything like Cain’s 9-9-9 plan is enacted there are caps on spending AND future (if any) increases.
I still share concerns that those who are on the poorer side pay more on this plan.
While I, as one of the 53%, think that the 47% should pay SOMETHING, unlike now, can he win with that kind of plan, once the MSM gets a hold of it?
IMHO, Art Laffer is the last word on this. I’ve been saying for weeks that the hidden/embedded taxes are ALREADY there and that, once those are gone, the retail prices will drop, offsetting the 9% sales tax.
Art Laffer agrees with me.
A transparent sales tax will do more to reign in DC than anything else we can do.
If the economy is thriving, there will be LESS POOR people and those that are disabled or elderly will have MORE honest charity. America is a charitable nation - when we have something to give.
So, how many people are going to vote to raise their taxes? And given how the dems and the media already have the whole "rich get off easy" meme, and polls show that americans DO like the idea of rich people paying MORE in taxes, how are we going to elect a guy who wants to cut taxes on the rich and RAISE them on the poor?
True & a tough sell. You’re talking about selling this idea to innumerates. I don’t see it happening.
Everyone gets skin in the game!! All these 20 million illegal aliens and the “POOR”( with their Iphones and Big TVs and 6 welfare babies) and 99 Weekers start coughing it up for what they get off the working suckers. I love and expect Herman to win at the convention if we can stop “winner take all” primaries!! Give proportional delegates and this guy wins in a walk!! Otherwise the liberal cross overs carry Rino Romney!! STOP “winner take all” and conservatives get their party BACK!! ( get that Perry phony out of here)
I saw this interview with Art Laffer, and for once he actually had a very serious look on his face, and it was clear he was not lightly endorsing Herman Cain’s plan. 9-9-9 certainly has some rough edges, but I think it ultimately could take the Country in the right direction. The current tax code had been an ever growing problem for my entire life, and we not only need to change the way we spend but the way we raise money for the things we need to do.
Exactly. By making paying taxes everyone's responsibility instead of making a few pay everyone's taxes, we all will pay more attention to not only how much we pay, but how the money is spent!
With Cain's plan, we're all treated like and act like adults instead of acting like college students expecting the parents to pay our bills.
Hate to say it, but it's time to grow up America.
Pay your share, instead of taking what you can get.
(JFK said it better.)
We’ll just have to explain to them that the options are 1) continue to wallow in this economic depression until the economy finally collapses for good and we go the way of Greece or 2) go with the 999 transition to a national sales tax that will revive the economy, bring manufacturing back to the US and create jobs and prosperity.
If the country chooses option 1, then it will get what it deserves. And frankly, I’m starting to not give a $hit one way or the other anymore.
Many people (accountants and lawyers) are employed or have their own businesses doing either corporate or individual taxes. If all tax loopholes are closed, tens of thousands would lose their jobs. Unfortunately, it just won't work. Now if you wanted to try to phase it in, you might het parts of it enacted, but there are real logical impediments to passage.
I think some of them will change their tune, when they see “jobs” and economic growth.
Not everyone who is not paying taxes right now likes being broke. Some people want good jobs. Want to get ahead.
The rest? They were never going to vote R anyway.
The rich will pay more taxes by elimination of loopholes.
This is why Cain is taking direct aim at the present tax system, with its thousands of pages of special tax breaks for the wealthy and politically connected.
The rich will pay more taxes by elimination of loopholes.
This is why Cain is taking direct aim at the present tax system, with its thousands of pages of special tax breaks for the wealthy and politically connected.
Let him compete in the GOP primary, OK.
Maybe so, but since everybody is supposed to be "equal", isn't that a possibility? This is America, if a person chooses to be poor or make bad decisions about their life; why does the responsibility fall back on those who have tried to do the right thing/s? After all, freedom isn't "free".
Sorry, but this argument is getting really old, especially when one considers the percentage of tax dollars consumed by the so-called "poor".
It will also create a much larger poor class. Lower middle will fall into poor. Middle will fall into lower middle. Think about that.
It is also a way to continue to tax the boomers who have literally paid into the system since the day they took that first teenage job. I’m looking forward to the day I DON’T have to pay in! I’ve been doing it since I was 15 years old. Now he wants to tax me 9% plus a 9% sales tax? I don’t think so.
I won’t support that. And just who are these “empowerment zones?” Why do I get the feeling he means Detriot? Sorry. Don’t like that either. There are plenty of unemployed people in the burbs and in flyover country, too.
There should be no tax on basic foods and drugs.
Great Video. Very Encouraging.
I’m not endorsing a national sales tax but I got an open mind about Cain’s plan, want to hear him out and further, admire that at least he’s got a plan, more than just political platitudes filled with empty air.
Playing Devil’s Advocate, I remind that SALES taxes get money from a lot of income that isn’t taxed as part of the federal income tax collection process.
Most important, DRUG MONEY! Also, prostitution, illegal gambling, money earned under the table.
For there might not be an employer there to catch your taxes before you take them home and spend them, there is a retailer who will charge you tax for stuff you BUY, no matter where the money came from that you’re using to pay.
It’s no trivial amount.
Its a good interview. Art emphasized that this 9-9-9 tax structure lowers rates, broadens the tax base (more poeple pay taxes)The tax base is not about who or how many pay. The tax base is WHAT is taxed. A broad tax base taxes more stuff so you can be fooled into thinking you pay less because the rate is low.
I didn't see any exemptions in his plan. You will pay sales tax on things you've never paid tax on before...Like rent, drugs, food, haircuts, auto repair, plumber, lawn care...NOTHING is exempt.
Raising the tax from 9% to a mere 9.9% ("it's for the children") is a 10% tax increase.
Retirees living on fixed income will be hit with a NEW 9% tax on all their purchases, including medicine, utilities, food, clothing etc.
If you like that, so be it.
I’m not talking net effect (which I tend to agree with you both on), I’m talking electability.
Right now, Cain leads Obama. I want to keep it that way.
The country will get a 9% raise from the underground economy.
I’m sorry, but that is absurd. The economic depression wasn’t caused by our tax system. We have experienced periods of enormous growth WITH this tax system.
You could argue that a better tax system might improve our economic output, but the argument that, simply because we are currently in an economic downturn because of Obama policies, we have to change the tax code, sounds like “not letting a good crisis go to waste”.
Radicals take common negative occurances and pretend they are unique and require radical solutions.
Note that there has been over a DECADE of discussion on a plan that actually COULD be a boon to the eocnomy — but “9-9-9” isn’t that plan. It’s some compromise plan, which supposedly will be replaced by the real plan in the future.
We can pretend that 9-9-9 is the radical solution that saves us, but that sounds rediculous when we know it’s really just some intermediate, flawed plan that even Cain wants to replace with Fairtax, when he has the political will to do so.
I don’t know what you’re upset about.
In 1992, in the State of Oregon (a tax Hell), I was earning $35,000 per year and determined that with all the taxes I paid, it came to 53%. I was single, no children, and no deductions except myself.
So, you’re ticked off about 9%?
Today I have no job, no money, and am faced with perhaps having to live in a cardboard box. Oh, yeah, I pay no taxes.
The main thing about Herman Cain’s plan is that money for investment would be freed up. That means jobs. I sure could use one of those right now.
The underground durable goods economy would just grow. The same criminals that you speak of will find a way to profit.
Don’t have to sell it to innumerates - have to sell it to INDEPENDENTS. This ain’t economics, it’s politics. Right now, Mr. Cain has put a plan on the table that everyone is talking about. Whether or not it’s perfect economics, it’s damned good politics, and he’s reaping the rewards of being shrewd and thinking differently. Those are two of the qualities that Independent voters will be attracted to, in their search for the Not-Obama in 2012.
Laffer’s endorsement of 999 is huge.
During those times, we never had anywhere near the number of non-federal-taxpaying voters we have today. Currently 49% do not pay federal income taxes. That number increases every year.
Do you understand what will happen in a few years when the 49% become the 51%??? When those who pay taxes become a permanent minority at the ballot box?
I'm tired of explaining this to people. So why don't you tell me what the future holds when a *majority* of voters no longer pay any federal income taxes? Who do you think will win every election? What do you think government spending and tax policies will be? Will they be the kind of policies that will ever lead to "enormous growth"?
I studied Economics with Laffer when he was teaching at University of Chicago and I trust him. I know first-hand that he knows what he is talking about, but I still have reservations.
I don’t trust the government to drop the other taxes, the invisible taxes, for good. It would be too easy to sneak them back in. Even if they do drop the taxes, business is so scared, they will be afraid to drop prices. Look at what happens with gas prices. They go up fast on prices rises, and go down a lot more slowly when the price drops. I don’t buy that we will save money net.
I think it is morally wrong to tax food. Even greedy NY doesn’t tax healthy unprocessed foods.
I think it is right that those who do not pay taxes because they are earning money under the table or by illegal means and not reporting it and those who are scamming the system in various ways should pay, and the sales tax would compensate a bit.
That said, we are nearing retirement and soon will be living off savings. This money has been taxed when we earned it, taxed again when we invested it, and now will be taxed again when we spend it? We are paying 8% NY sales tax. Another 9% would make things way too expensive. Cutting back on new purchases does not create jobs.
We have worked hard all our lives to have what we have now and are just getting by. I don’t like the current setup, but I am nervous about adding new taxes. I don’t trust the current Congress. I don’t trust future Congresses to do what is best for We the People.
This is a complex issue that Cain is trying to make simple. The real point is that he is willing to look at creative ideas and different tactics to make long-term change. That is why I am for Cain in spite of the 999. I don’t think that is something he can get through if elected, and I think of the available candidates he has had the most business experience, and that is what is needed now: the understanding of how to turn the country around financially.
“...can he win with that kind of plan, once the MSM gets a hold of it?”
He can if we vote! I feel like Herman Cain is the seemingly normal American on the stage. That aspect alone is comforting these days.
True. Which is why politicians and cronies will fight this plan in a big way -- mostly by spreading misinformation.
I believe the plan reduces the payroll tax which is 15.3 percent, half paid by workers, half by employers. Of course, Cain hasn’t said how that 9 percent will be divided. Cain is supposed to release more details as he didn’t release the final plan. It’s a smart move to see what the critics say first.
Workers all across America and across multiple generations have been disrupted by this or that change. Aerospace and farm workers, telephone operators, automotive workers, bank tellers, even going back to blacksmiths and buggy makers.
Books will still need keeping, dollars will still need investing, state taxes will still need doing. There will be plenty of opportunities.
Those tens of thousands should not treated like a protected class while hundreds of millions of others suffer the ill effects of the current code.
I agree with you on the taxation of food, CA doesn't do that either, but some states actually do. If Cain really plans to tax food, which isn't clear from his site, that's a huge hill to climb.
Many prices will drop because consumers will demand it. Markets will figure these things out just like it did on whether to charge for internet access per-hour or flat rate.
Folks seem to be very afraid of change. They'd rather suffer under the current tax code, no matter how despicable it is because it's old and familiar. They don't care how much hidden taxation there is. As long as they aren't faced with it directly they'll happily pay. Cain's plan threatens to expose it all in the bright hard light of day. There'll be no more political cockroach taxation scurrying around in the shadows.
We'll have 300 million real taxpayers eyeing 435 members of congress to keep the rates in line.
I expect we'll find out more detail in time that will address many of our concerns. Laffer, for example, mentioned a support provision for those below poverty.
“once those are gone,”
Like the gas, communications, cable, liquor, cigarette, etc., etc. taxes? Who said they’re going away?
You forgot to add that the invention of ATMs and airport E-tickets is the cause of today’s high unemployment.
There’s another elephant in the room that needs to be brought into the discussion:
Currently, our retirees are made of the Silent generation and some older Boomers.
Each year, about 3.5 million Boomers retire now.
My generation, Gen X, is the smallest of the three right now. We’re also the ones with the education and the work experience.
Millennials are a larger generation, but many of them haven’t even graduated highschool yet. The oldest ones have just gotten out of college and are just entering the work force. These kid have no work experience.
The question that people have been trying to figure out for a long time is; how will a shrinking working population support a VERY large retired population?
For 20 years, people have been watching the bubble work its way forward and people have known that this will be a disaster, but nobody’s actually come up with a solution.
I’ve seen Gen Xers complaining that they’ll have to support the Boomers while raising their own children and Boomers have scoffed at that. “I did it! You can too!”
No, it’s not the same. In 1960, it was 5 workers to one retiree. By 1997, it was 3.2 to one. Soon it will be two to one. Two to one is a LOT more pressure on a man trying to support a family of four than five to one.
The ONLY way that this system is going to survive is if we have two things; we need a THRIVING economy and we need immigrants. We need the working generations making so much money that they can afford to pay for their elders’ retirement and we need a larger workforce in general.
The thing is, Boomers have been in denial about this - just like everyone else. The fact is, they simply didn’t have enough kids for this ponzi scheme to work.
Cain is the only one that sees this big picture. Many FReepers here are screaming that we need to cut gov’t spending, but the bulk of gov’t spending is soon to be social security. Last year there were charts all over the news explaining that if we didn’t cut SS, we couldn’t survive. There is no way to deal with our national debt and maintain ss.
So are Boomers going to accept a 9% tax on their new purchases to save the whole system?
From what I’m seeing, they feel that they’ve sacrificed enough and they are unwilling to sacrifice any more. They stubbornly refuse to understand that if they don’t allow someone to step in and fix this system, they will get NOTHING when the whole thing falls apart. (Or get MUCH less. How does $200 a month sound to you? I think that sucks.)
Cain understands that if we have a thriving economy and in influx of healthy immigration, we can survive the next 30 years. Boomers with investments will THRIVE in a booming stockmarket. Boomers without will have the safety of SS. Yes, they might lose 9%, but that’s better than losing it all.
And please don’t get me wrong. I’m not BLAMING Boomers for any of this. All they did was be born. But the problem persists and Boomers need to acknowledge what a strain their retirement will put on the country and on the younger generations. They may have to give a little to save the system entire.
I was taught about this problem in the mid-80’s in school. 25 years later, we’re here. We all knew this storm was coming and few did enough to prepare.
Ignoring the problem and insisting that we maintain the status quo will destroy the entire country.
So I ask again; what are Boomers willing to do to save the system for THEMSELVES?
One more thing: When Boomers look at their $1200 a month SS check they might not think that this is too bad of a burden.
But they need to realize that a severely disabled person living in an assisted living facility can be costing up to $8000 a month PLUS medical expenses.
Add to that medical care for all of our elderly and you begin to see how bad this problem is. Break those* numbers down to a 2 to 1 ratio of worker to retiree and you’ll begin to see how serious this problem actually is.
I know how big the problem is, (my father is paying $9000 per month for a nursing home) and I too studied this problem both in undergrad (operations management) and graduate school (economics). We were talking about problems of sustainability in the early 70s. I know that government has been hoping that the influx of immigrants (legal and otherwise) will help raise the tax income - but many of these become part of the problem rather than the solution by taking up entitlement resources without putting anything much into the system. That is why California is having such serious problems.
We have saved all our lives because we knew this was coming and we have seen a lot of it go out the door helping relatives impacted by this economy, so I am all for answers. We know we will have to continue working long past retirement age - and can because we don’t wait around waiting for other people to bail us out.
The point is, it isn’t an easy problem and in coming up with the details of the solutions, any politician is going to have to realize that the “little people” have lost their trust in the system and in politicians who say one thing and do another - and pass huge bills before they read them so they can “see what is in them.”
It doesn’t matter what the plan is. Do YOU expect Congress to work in your best interest?
The problems are huge and we need serious answers. Cain did his homework, and he is using excellent marketing to get it across. The missing element is trust that in the long run the crooks in Congress won’t let the plan be a positive for the people. 999 can easily become 15-15-15 then 20-20-20. “Invisible” taxes can be put back.
I trust Cain to be a leader with the best intentions for the country, unlike others we have seen of late who have other motivations. AND he has the experience to actually do something positive, even if it isn’t exactly 999 in the form he is presenting it. The Dems won’t let that through as is - too many people want a free lunch - and they want to eat ours. It doesn’t work when such a low percentage of people who are able to work, aren’t and the number of people who can’t work is growing.
I can fix that easily — just eliminate a few deductions, and set a base tax rate of 5% that is not subject to deductions, so that everybody pays a little bit.
If you can’t get that trivial fix through congress, there’s no way you’ll get a 9% sales tax through.
i’m not even sure I support a national sales tax. We already have state sales taxes, and that’s good for states.
I’d rather see us re-institute a “state” tax, where each state was required to provide a fixed amount of money based on the population of the state. The state could raise the funds anyway they want, so the people could decide if they wanted to use a sales tax, an income tax, or some other tax.
These are all incremental changes that wouldn’t disrupt the economy, through fear and doubt into business, or implement an entirely new federal tax authority complete with it’s own beaurocracy, special interest deductions/credits, and ability to be manipulated by corporate interests with large lobbying arms.
Enterprise zones are just the most obvious example of how a sales tax regime can be manipulated to give government more power, and to bring lobbying dollars into the coffers of politicians in exchange for identification of where and what enterprize zones exist.
BTW, this isn’t really a “Cain” thing for me. Note that Rick Perry has expressed support for the FairTax, which is the end game for Cain as well. I’m not a fan of FairTax, because of the same reasons I’ve expressed before here, but it is less likely to be manipulated, and at least it is the END game, not some compromise intermediate less-desirable plan.
That is awesome - I was looking for that earlier today :-) Thanks!
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