All the proposals for drastic change to the tax structure (999, flat tax, fair tax, etc.) suffer from obvious logical flaws.
They claim that simultaneously:
1. Everybody’s (or almost everybody’s) taxes will go down;
2. The proposal will be revenue neutral.
This will not fly. For a tax system to be revenue neutral, if taxpayer A’s taxes go down by $1000, taxpayer B’s must go up by the same amount.
IOW, there will be specific winners and losers with any change in the system. As a general rule, those who see their taxes going up with any general proposal will oppose it with much greater fervor than those whose taxes might theoretically go down will support it.
That is why major changes are so difficult to bring about. Concentrated opposition, diffused support.
999 also means 9% corporation tax and no capital gains tax death tax or payroll tax for business.
These changes will effect the entire economy, and your classic A and B argument is STATIC analysis.
For example, 9% corporation tax v 35% is a huge change and with the elimination of the payroll and capital gains tax is going to remove barriers to entry for new competitors to challenge existing companies.
An existing company may try to hold onto an increased margin, but that stance is much more likely to draw competition under 999.
A sales tax is a multiplier of the base price, and the base price is a function of the existing hostile business environment in the USA. Base prices are very likely to drop under the 999 plan in the long term.
Is that difficult to explain in a 30 sec segment, yes it is, but if Cain stays in and the other weaker conservative candidates drop out, he will get more time to explain it.
Herman is a great public speaker, and given more time he will land some heavy blows on the more jelly-spined, poll-driven “professional” politicians.