Posted on 10/17/2011 10:15:24 AM PDT by Atlas Sneezed
Do you know why candidates for office tend to be reluctant to propose detailed plans? Because they know the plans will be flyspecked and picked apart by just about everyone. Inviting criticism doesn't help you to get votes.
But fear of criticism prevents you from conceiving solutions to problems. So even if avoidance of criticism helps in propelling you to an election victory, how are you supposed to effectively govern? How are you supposed to fix the problems you told everyone you were going to fix?
That's why I'm happy to see so much criticism of the 9-9-9 plan I've proposed. It shows that people are thinking seriously about a substantive idea. When people stop obsessing over "gaffes" and campaign strategy, and start honing in on fixing the country's economic problems, we are getting somewhere.
This is not to say, of course, I'm going to leave poorly founded criticisms of the plan unanswered. Certain objections to the plan are circulating in the usual places, driven by the same kind of thinking that has left us with a stagnant economy, $14 trillion in debt and mounting entitlement obligations. These criticisms deserve responses, and here they are:
(Excerpt) Read more at wnd.com ...
Response: This claim ignores some important aspects of the plan. One is that we eliminate the 15 percent payroll tax, which allows for no deductions at all – not even for charitable contributions. Some critics have argued that the poor still come out behind because employers pay much of the payroll tax. That demonstrates a basic misunderstanding about how compensation works in the business world. An employer decides to accept a certain cost-of-employment for each employee, and the employer's share of the payroll tax is part of that cost. It comes out of your compensation whether you realize it or not. Also, a flat tax is not – by definition – a regressive tax. Everyone pays the same rate. And it is not an added tax, but a replacement tax, whose total burden is determined by the consumer's spending decisions.
Finally, the best way to help the poor is by spurring economic growth, which the current tax code will never do, and which the 9-9-9 plan is specifically designed to do.
Claim No. 2: Creating a new tax is merely setting the stage for higher rates on all taxes, as untrustworthy politicians will surely raise them.
Response: First of all, that is not a criticism of the 9-9-9 plan. It is a criticism of politicians. If you don't want the rates raised, don't elect politicians who will raise them. Even if we repealed the 16th Amendment and eliminated the income tax, as some demand in return for establishing a consumption tax, politicians could raise that rate, too. What's far more important here is the fact that the very simple, flat-rate structure of the 9-9-9 plan, which allows no deductions, loopholes or exemptions (with the exception of charitable contributions for the income tax), is a far more growth-friendly tax structure than the mangled mess of rates, taxes, exemptions and ill-conceived incentives we have today. It virtually eliminates the massive compliance costs of the current tax code, and it restrains the size of government.
By taking away the politicians' gateway drug of loopholes and deductions, we make it much more difficult for them to mess with the tax code. Having said that, any plan could be criticized for what it would look like if someone messed it up. The plan as I'm proposing it is a huge improvement over the status quo.
Claim No. 3: The plan redistributes wealth from the poor to the rich.
Response: It does no such thing. It is fair and neutral, taxing everything once and nothing twice. What's more, we are getting ready to propose empowerment zones for economically struggling areas in which the rates will be even lower. That will allow the poor to benefit even more from the plan than they already would. Claim No. 4: The plan should have included a pre-bate to offset the sales tax.
Response: The last thing we need is to establish another federal entitlement, which the proposed pre-bate would quickly become. And it's not necessary. The consumption tax replaces ones already embedded in prices. It's not the prices that would increase, but the visibility of the taxes being paid. Right now, money is deducted from your paycheck and you never see it, so it doesn't feel like you paid a tax. But you did. With the 9-9-9 plan, you feel it, and I suspect a good many people who clamor for higher taxes will start to feel differently as a result. But they won't be paying more than before. They'll just be more aware of it.
Claim No. 5: The business tax represents a new tax on labor.
Response: Paul Krugman of the New York Times makes this claim because we do not allow businesses to deduct the cost of labor from their taxable revenue. But the claim is bogus for several reasons. First, we are reducing the corporate tax rate from 35 percent to 9 percent, so the tradeoff is a much lower rate paid on more of a company's income. Second, we treat capital and labor the same, both with the corporate tax and with the income tax. That is fair and neutral. What's more, the current system taxes both capital investment by business and capital gains by individuals. That's a double tax, and the 9-9-9 plan eliminates it.
Claim No. 6: The numbers don't add up. The 9-9-9 tax wouldn't generate enough revenue.
Response: Several groups apparently "ran the numbers" and came to this conclusion, including Bloomberg News and the Center for American Progress. Our report, which they do not appear to have read, demonstrates that it generates the same revenue as the current tax code, and our methodology is visible for anyone to see. Those who are making this claim should release their scoring so their methodology is as visible as ours.
Claim No. 7: The 9-9-9 plan is a really an 18 percent value-added tax plus a 9 percent income tax.
Response: That's an argument? That some might be able to give it a disagreeable label? What we have done is split the incidence of the tax so it is harder to evade – since you'd have to dodge two taxes, not just one, to save the 18 percent. And by eliminating loopholes we've made that virtually impossible to do anyway. I don't really care what people call it. What matters is how it works.
Claim No. 8: Some people (like Herman Cain) who may live off capital gains, would pay no income taxes. Is that fair?
Response: First, one of the benefits of the 9-9-9 plan is that, even if someone doesn't pay much or any of one of the taxes, he or she is still likely affected by the other two. More to the point, though, everyone has the same opportunity to work hard, earn capital and put that capital at risk. Whatever I have earned has come from hard work, good decisions (and some bad ones), a willingness to take risks and a constant honing of strategy. Nothing is stopping anyone else from doing the same thing. I realize many are being told there are no opportunities available to them, but that is not true and I wish people – for their own sakes – would stop listening to such doom and gloom and come to understand all the opportunity that truly exists, and learn how to access it.
Claim No. 9: It won't pass.
Response: Politicians propose things that can pass. Problem-solvers propose things that can work. One of the worst instincts of Washington types is to judge an idea not on its substantive merits, but on their perception of its political viability. I do not underestimate the challenge of getting any good idea through Congress, but I have said all along that if you propose a good idea, and the people understand the idea, they will pressure Congress to pass it.
So there. I welcome the robust discussion and the many questions that are being raised about the 9-9-9 plan. Asked and answered. What else do you want to know?
Love it or hate it, at least there’s no reason to be misinformed about it.
Do you think there might be some possible Cain suppoters that sincerely don’t like 9-9-9?
Are they welcome on the Cain Train?
I’m still waiting to see who Karl Rove endorses so I can know who to get behind.
Good one!!
Wow. Herman Cain is contributing to World Net Daily?
Heh heh. I wonder if his next article will address the Birther Scandal?
I don’t like it, but I’m on the train.
Do you think there might be some possible Cain suppoters that sincerely don’t like 9-9-9?
Are they welcome on the Cain Train?
I have my concerns:
1. Why should we trust politicians not to be corrupted by the allocation of “empowerment zone” status?
2. Isn’t labor taxed twice? Once as corporate tax on the 9% tax paid on company revenue that flows to the employee, and again by the employee as income tax? Wouldn’t this create an incentive for a manufacturing company to make that labor cost untaxed by changing it from labor, to non-taxed cost of materials manufactured overseas?
I’m still a strong Cain supporter and contributor, but I think these question are worth addressing.
Herman Cain has written an editorial for WND for years - go to the story at the link and at the bottom of the page is a link to the Herman Cain archives. For true insight into the man and his ideas, I suggest reading years of his writings.
I wonder if his next article will address the Birther Scandal?
He’s had a column there for a long time. Maybe you have a more widely-read site that you own, and can offer Cain a better platform?
This puts to rest any of the ignorant posts I’ve read on FR regarding 9-9-9.
Of course, most of those people were not interested in the truth.
Herman Cain directly addresses questions about his 9-9-9 plan in a new WND op-ed. Whether or not people like the plan he is creating discussion about how we feed the beast, a discussion that has needed to go mainstream for a long, long time. I know Newt Gingrich has proposed a 15% flat tax and others have talked about eliminating corporate or capital gains taxes. Hopefully the other candidates will step up as well and admit we need to scrap the progressive tax code, unconstitutional FICA taxes and thousands of crony tax loopholes and propose plans of their own. Push the debate, Herman, push the debate.
Don't companies already compare the cost of making a product domestically vs having it made overseas?
Cain's plan does not change that, nor does it give a greater incentive to have the product/material made overseas.
Companies will still look at which method makes them more income over the long-run.
I like Herman Cain, I HATE the 9-9-9 plan (But, reportedly, it is meant to be a transition to the FairTax, which I support, but prefer it be at a much lower rate). The taxation of labor (and its payroll removal before we ever see it) is the biggest sham, fraud and theft in the history of all mankind, and I will NEVER support an income tax, especially in addition to a tariff/duty/excise. I do not like the Empowerment Zones idea, nor do I care for a tax rate of 9%, it should be more like 0.1%, but that requires that we limit the Federal Government to within its constitutional bounds. However, one must eat an elephant on bite at a time, and you can’t please everyone, so my distaste of the 9-9-9 plans in no way diminishes my support of Herman Cain. NO ONE agrees on all things, eye to eye. In that bright and perfect day, we might, but not so in this mortal life. Humans disagree, but that doesn’t mean we can’t work with one another if we really are working towards the same goal. (Liberals are never working towards conservative goals, so I’m pre-emptively excluding the “reach across the aisle” idea, lest anyone ask).
Furthermore, along with the ending of the tax-break, should be the removal of all rules/regulation against political speech in Churches.
I am a tithing Christian, even when it hurts, even in bad times when I'm praying all the checks clear. I would not stop tithing no matter what the government does to my taxes. God comes first.
Now as to your concerns, I believe Social Security payments are exempt from the income tax. I also believe that in the big picture eliminating the billions in built in costs in our system will bring down prices across the board, spur massive economic growth and raise employment, profits and wages. I would think that this most generous country when freed from the shackles of government taxation would be much more free to contribute charitably than they are now. Revenue at our church has been hurt by the downturn in the economy much more than the tax deduction helps it. Christians with jobs and financial security are much more likely to tithe than those who are unemployed, underemployed or worried about every dollar.
I'm not completely sold on all of Cain's plan but he certainly is making people rethink how taxes are collected and look at alternatives to the system that I think we can all agree is broken. If nothing else I believe Cain will force the other candidates and elected officials to address a situation that we have lost to the socialists for 100 years.
Thank you for taking the time to read this.
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