Posted on 10/18/2011 12:28:10 PM PDT by Brookhaven
Economist Stephen Moore, one of the architects of presidential contender Herman Cain’s 9-9-9 tax plan, said Cain needs to rework a critical component of the plan.
Cain’s plan would replace the current tax structure with a 9 percent corporate tax rate, a 9 percent personal income tax rate and a 9 percent federal sales tax. But speaking on Larry Kudlow’s radio show on Saturday, Moore said the sales tax should be replaced with a 9 percent payroll tax.
“I’ve come to the conclusion that the American people and the voters do not want a national sales tax,” he said. “[Cain’s] going to have to replace that national sales tax with a 9 percent payroll tax. And if you do that, it’s a total winner.”
The plan has been under fire from both the left and the right since Cain’s recent surge in the polls. Democrats say the plan would lower the tax burden on the wealthy while increasing the burden on the middle class, and Republicans say the sales tax opens an additional revenue stream for the federal government to abuse.
“I’m surprised how hostile people are to the sales tax,” Moore continued. “When we designed this plan, I thought people would go along with the 9 percent sales tax. But the point is they won’t. And why not just do a payroll tax? It’s the devil we know.”
At the last Republican debate, in New Hampshire, Minnesota Rep. Michele Bachmann said that if you turn the 9-9-9 plan upside down, “the devil is in the details.”
Moore, who developed the plan with economist Arthur Laffer and Wells Fargo wealth manager Rich Lowrie, said he would advise Cain to drop the sales tax, but that the plan was solid otherwise.
“I want to be very, very clear on this,” he said. “I am not bearish on this plan. If you could put in place the 9-9-9 plan, oh my God, it would be like steroids in the economy. … You would have a million jobs a month if we put this in place. … I love the concept of it … but the American people will not go for a national sales tax. They’re just afraid of it.”
I have to agree. I read a newspaper story a long time ago about a cop getting dressed down by a drug dealer he was arresting. "I pay your salary", said the drug dealer. "How do you figure?", replied the cop, knowing the dealer was in the underground economy. "Sales tax" was the reply.
I don't like feeding the government monster, or paying tax on every purchase, but sales tax is the most visibly transparent tax we pay. And it puts everybody's skin in the game. Cain should exempt food and medicine from the national sales tax, and otherwise keep the 999 program.
That’s an occasional experience. Even if you see your payroll tax because you review your pay stub twice of month or whatever, that is nothing compared to seeing what you’re paying Fedzilla listed on the bottom of every sales receipt you get.
And that applies to everyone, whether they were paying payroll tax or not.
Apparently you missed Today’s news.
Economists Art Laffer and Stephen Moore have come out and said they part of the team that designed the 9-9-9 plan.
They didn’t want it known yet that they were working with the Cain campaign, and Cain was classy enough to honor their wishes (despite the fact that he has taken a lot of heat for doing so).
These two guys are heavy-wieght economists, at least in conservative supply-side circles.
If they have no income, do they starve to death? More seriously, you're talking about freeloaders. They just happen to be your freeloaders. This is indicative of why the nation is doomed: even "conservatives" carve out protected classes of sacred cows.
I'm still waiting for a version more detailed than the outline on the website. There are tweaks I'd consider, but ditching the 9% sales tax is foolish because it does capture underground economy money.
I'd much prefer all taxation to be on top of the table, where we can all see it, instead of all this sneaking around of the current scheme. 9-9-9 does it.
Swapping out the sales tax for a payroll tax goes back to hiding taxation, you might as well just make it a flat 27% on breathing.
It's much too early to say the 9% sales tax should be replaced or cannot be "sold" to the American people. David Gregory's incompetence on what goes into prices is unacceptable from a major media gatekeeper and yet he's the rule, not the exception. This is high school economics stuff, not the domain of rarified ivy covered walls.
I'm not surprised there's push back. People are used to the current system with its few visible and many hidden taxes. They cannot think beyond the assumptions made inside that prison. The fear level mixed with ignorance, yet another example of feeding ourselves lies and screaming for action, is just pathetic. The press's ineptness is virtually criminal.
Cain needs to offer concrete examples to show how retail prices decrease under 9-9-9 while an individual's total outlay would be unchanged and the taxes actually paid simply become more visible and with greater visibility comes greater accountability in spending at the federal level.
Activists, lobbyists, congress members all fear that visibility and associated accountability. Professional tax compliance high priests, like Michele Bachmann, also resist anything that threatens the system they expertly game.
Instead of dropping the sales tax because of the initial wave of opposition (such as it is), it would be much better to have this conservation and attempt to educate people on its benefits.
Replacing the sales tax with a payroll tax — just because it seems so hard right now to sell the NST — violates one of the prime tenets of 999: that everyone should pay, should pay the same rate, and should know very well what they pay.
Putting the burden back on the producers, and again exempting the takers, is pointless in terms of truly restructuring our tax system and, more importantly, in terms of solving the kethal “demands for free stuff” problem.
I agree, but at least now we can present options and have a legit debate over them.
Even at RedState (which has been in full 999 attack mode) has suddenly opened up to the 999 plan with this modification.
I’d prefer eliminating the income tax all together, but if we can eliminate the 90,000 page current tax code and replace it with some form of flat tax, it would still be a huge step forward.
I agree - with each passing day he is looking more and more like your typical career politician.
There was more time spent on intentionally hiding the details and truth on his website than there was time spent on developing his flawed 999 plan.
As even the most microcephalic microeconomist knows, that would depend on the shape of the demand curve for labor. In other words, it would depend on the employer's need for the employee vs the employee's ability to find a better job. Same as the rest of the employee's compensation package. Purely and simply, the employer part of the tax is part of the cost of the employee to the employer. Remove the tax, and suddenly there's more money with which to buy employees. That drives up the cost of employees!
I find it a little unsettling that this guy would come out and start jawboning in public about his musings on Cain’s plan, while claiming or allowing “architect” status to be attributed to himself.
That’s just not right, really.
Unless he talked it over with Cain first. Maybe this was a planned trial balloon?
If so, we need to let him know the answer is “no.” We want to try to go for the conservative Holy Grail of a consumption tax over a tax on producers.
Cain, overall, has been unwilling to reveal who his “smart people” even are, as he has said the only reason the media wants to know is so they can attack and try to discredit them.
Thank you.
I posted the link to the thread debunking this VAT stuff pushed by Polybius.
May I suggest ignoring the spam posts on this thread from here on out?
I’m going to, at least. In my experience, they NEVER end.
So then you support a NST because everyone will pay that and pay it equally (according to how much they desire to spend on consumer purchases)?
If somehow Obama's defeated, the next president is likely to inherit expired Bush-Obama tax rates and whatever fiasco the super committee serves up. Even if passed and signed into law within the first 90 days, I wouldn't expect 9-9-9 (or any plan) to be ready for implementation before fiscal, if not calendar, 2014.
Your two cents are worth much more than that.
And, what is the current "personal income tax rate"?
Thanks.
It’s such a dead duck it’s started the tax reform discussion of our lifetime and vaulted a man to the top of the polls.
Quack, quack, quack.
No, my Father doesn’t starve to death because he worked for 50 years and after he paid his taxes he saved his money. Money which you seem to feel that you are now entitled to take.
That you would refer to this man as a freeloader is beyond disgusting.
When you say “retired people with no income,” could you elaborate for me please?
What do you see these people as living off of? If savings, are those savings presently subject to any kind of tax, such as capital gains?
Are you talking about people on Social Security income?
Now, now . . .
Oh how very original.
And helpful.
NOT.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.