The 9-9-9 Controversy.

The Silent Majority ^ | 10-19-11 | Southernman

[Lexluthor69]

During the Republican presidential debate in Las Vegas candidates once again attacked Herman Cain on his 9-9-9 plan. One bone of contention that stood out was the issue of state taxes.

The other candidates, Mitt Romney in particular, made a point to note that Cains plan would add taxes in addition to state taxes (the following quotes were taken from a CNN article you can find HERE) :

Romney said Cain’s plan would add federal taxes on top of state taxes.

That is absolutely true but somewhat misleading. No candidate has proposed a plan that eliminates state taxes. The truth is state taxes are not under the purview of the federal government to begin with.

States can levy sales taxes, property taxes and income taxes in addition to any federal tax. For Romney and others to intimate otherwise is disingenuous.

What Cains plan attempts to do is simplify the tax code and remove the bureaucracy that supports it. By doing so he will effectively limit the governments power to use the tax code to punish and reward individuals and companies. Cain alludes to this in one of his responses during debate:

“The reason my plan is being attacked so much is the lobbyists accountants and politicians, they don’t want to throw out current tax code and replace with something that’s simple and fair,” Cain responded.

Newt Gingrich did make a valid point however when he said:

“There are much more complexities than Herman let’s on,” said former House Speaker Newt Gingrich.

There is no doubt that some unintended consequences could arise if the plan is not carefully studied and a strategy developed far in advance of its implementation. This does not mean that Cain’s plan is unworthy of discussion.

[dirtboy]

There is no doubt that some unintended consequences could arise if the plan is not carefully studied and a strategy developed far in advance of its implementation. This does not mean that Cain’s plan is unworthy of discussion.

I have issues with a national sales tax when there would still be an income tax as well. But Cain has pointed out the need to simplify the tax code.

[NoGrayZone]

Ping.

"It is unclear if the other candidates are simply piling on Cain because he is leading in the polls or if they are simply ignorant of his plan but it is clear that they are misrepresenting his intentions wholesale."

[Safrguns]

Cain needs to do a better job explaining how removal of the current tax code and related mandates/regulations will bring the cost and price of goods down far more than the 9% that people will be spending on the sales tax that is put back on those goods.

As for it being a VAT tax, the way Bachmann explained the VAT tax, we ALREADY HAVE THAT in everything we buy at the federal level... so again, the end result is that the NST is a net lowering of federal tax on goods produced. The 9% NST is on the retail level. The current federal taxes/regs are at every level.

[justsaynomore]

Laffer – 9-9-9 not a joke
by admin Posted on October 18, 2011

Arthur Laffer documents his thoughts on Herman Cain’s 9-9-9 plan. The debate was increasing frustrating tonight due to Bachmann, Romney and Perry routinely providing false and misleading analogies on Cain’s plan. Here is the math:

Current tax code: 25% income tax + 9% sales tax = 34%

9-9-9: 9% income tax + 9% federal sales tax (only on goods you choose to buy new) + 9% state sales tax = 27%

Now, the argument will be made that the poor now must pay 9% income tax under this plan. At what point should people have skin in the game? When 47% of the country pays no federal income tax and yet receive benefits beyond what this country can afford, are we supposed to seek our own financial demise?

http://theconservativethinker.com/wp/?p=1702

[bigbob]

Pretty fair analysis. Mr. Cain has done what all good executive leaders do - identify core problem, and cast a bold vision for addressing it. In any organization, public or private, it is the job of professional staff and experts to translate the vision into practical policies or programs and the implementation plans to make it become a reality.

This has been done by other national leaders with great success, including John F. Kennedy’s bold challenge to “put a man on the moon and return him safely to earth”. That vision rallied the nation and led to unprecedented economic and technical growth, and Mr. Cain’s 999 Plan can do the same, in a different way.

[cuban leaf]

I really like the dialogs created by Cain's proposal, but the money quote from the article is here: “...remove the bureaucracy that supports it.”

That bureaucracy is legion and includes very powerful people in both the public and private sector. They would tear this country to shreds in a fight to the death to preserve their livelyhood/industry.

This is a non starter. But I love the dialog it has created. It's fun to watch the crew fight over how to best rearrange the deck chairs as we go down.

[justsaynomore]

Cain’s Stimulating 9-9-9- Plan - Art Laffer

http://www.freerepublic.com/focus/f-news/2794936/posts

[C. Edmund Wright]

thanks for posting this.

Say what you will about 9-9-9, the state tax issue is just David Gregroyesque in sheer stupidity. I was just horrified by the responses of many of the other candidates, some of whom I like, with this kind of knee jerk idiotic response. Cain was fair, but not great, in calling them out on it. His apples and oranges response was correct, but not complete. He could have won the day bigtime.

Bachmann, who grates on me a lot, actually made the legit case with her point about where to draw the line on the final point of sale to apply the 9%. But even that got drowned out by the kindergarten objections.

To me, the plan was attacked irrationally and defended poorly. So nothing was accomplished.

[BfloGuy]

At some point, Cain must explain the potential economic benefits from his plan. The economy would receive a true jolt to growth from the drastically-lowered corporate tax rates. A sales tax will discourage consumption and encourage savings and investment (assuming Bernanke's gone).

As Victor Davis Hanson pointed out this morning, Cain is unflappable. But it isn't enough to constantly refer to his website, he must explain it, himself. Or, as we saw last night, the others will explain it for him -- in unflattering and, in some cases, dishonest terms.

[winkadink]

I haven’t decided who I will vote for, but Mr. Cain at least cares about cutting the taxes we have to pay and get rid of the IRS. He is the only one who seems interested enough to make suggestions.

How about the complainers about his 9 9 9 plan, come up with a different one which is better.

[JIM O]

Cain is right that we need to simplify the tax code. The criticism of 999 is also correct whereas deductible restrictions imposed on corporations will increase the net effect of a vat. State taxes as I understand it will no longer be deductible from your federal tax bill. An important element to fiscal federal responsibility will be a cutback in state aid increasing the likely-hood of individual states increasing state taxes. since these will not be deductible the net effect is higher taxes for all.

[AmericanInTokyo]

Good point. Cain is a very humble man. He admitted as much in some radio interviews I heard, particularly with Dennis Miller who endorsed Cain. So few know that his background is so much more than a Pizza executive. I think that should be passed on to the Cain Campaign as constructive criticism, and I am sure he would accept it and modify and strengthen that aspect of his delivery.

[NC28203]

>>>Cain needs to do a better job explaining how removal of the current tax code and related mandates/regulations will bring the cost and price of goods down far more than the 9% that people will be spending on the sales tax that is put back on those goods.

From the Laffer article inthe WSJ:

"Thus, Mr. Cain's 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax."

It would appear that more than a third of the revenue from this plan would be derived from the corporate tax. Looking at the current Monthly Treasury reports, corporate income tax accounts for less than 10% of revenues under the current plan. If corporations are going to bear a much larger share of the tax burden, would we necessarily see savings in the prices of goods and services?

[Vaquero]

currently I see Cain as the guy to beat and I probably will vote for him in the primaries...(unless someone sparkling and new shows his/her face)

but the sales tax will complicate things and force Govt. to make up new regulatory agencies...and people in states with no income tax will scream as people in states like NY will scream who already pays almost 9%...the architect of 9-9-9 has already rethought the sales tax thing and can live without out it...I think Cain needs to do the same...

lets stay with the flat tax.

I would prefer 15-15 to 9-9-9

[HerrBlucher]

How about the complainers about his 9 9 9 plan, come up with a different one which is better.

Because its a lot easier and more fun to criticize other peoples ideas, and a lot safer too since you are not subjecting yourself to criticism if you propose your own idea. Cain is very bold in proposing this knowing what would come down on him because of it, while the others skate, and that shows his great integrity.

[Servant of the Cross]

... the plan was attacked irrationally and defended poorly.

Exactly! Ergo, it was even worse than nothing accomplished. Herman needs to have his responses crafted by Art Laffer and stop merely saying 'go to my website'.

[NoGrayZone]

"Now, the argument will be made that the poor now must pay 9% income tax under this plan."

I read your post in the other thread and will repeat MY argument against theirs about the "poor" having to pay 9%.

Buy used. I do. I could have saved a bundle under 999.

[PapaNew]

I like Herman Cain and I like the idea of a sales tax that is not a VAT replacing the income tax (less intrusive and malevolent). But until the 16th amendment is repealed, the sales tax will and ADDITIONAL NOT REPLACEMENT tax to the constitutionally-protected income tax. The 16th amendment must first be repealed before a sales tax is created.

In the meantime, go ahead and abolish the convoluted tax code and simply have a flat 9-10% income tax for individuals. I hate corporate tax, but maybe some kind of flat-rate temporary corporate tax as well.

[alancarp]

Yes, and the real thing is that Cain has stuck his neck out and actually proposed something... and it also has the advantage of being ‘sound-bite-able’ since it has a catchy name. Still waiting on what the other candidates have in mind... Cain is the only one actually exhibiting leadership - he doesn’t care if his neck is exposed. The rest of them are all about putting down ‘the other guy’ so they can look good themselves.

Now I’d like to see an economic recovery plan put forth... with a statement that it oughta be enacted immediately because Americans can’t wait until the next election cycle to start getting healed.

That what problem-solvers do. And frankly, I don’t care about perfecting the details right now: at this time, it’s all about leadership.