Posted on 10/19/2011 11:19:06 AM PDT by teddyballgame1
One of the key economists who helped presidential candidate Herman Cain draft his 9-9-9 tax plan is backing away from the most controversial component of it, warning that the criticism Cain endured at Tuesday night's Republican presidential debate shows his proposed 9 percent national sales tax might have to go.
"It was such a dart board," economist Stephen Moore said Wednesday of the proposal.
Cain weathered a storm of complaints over his tax plan at the Republican debate in Las Vegas. Virtually every candidate took turns accusing the businessman of pushing a scheme that would introduce new streams of revenue and hit the middle class hardest.
(Excerpt) Read more at foxnews.com ...
“I respect the guy for at least proposing SOMETHING”
I agree.
“It’s a bold idea and Cain has done an excellent job redefine the debate on tax code. Gingrich summed it up best last night - it’s more complicated than just “9-9-9”. States that already have a sales tax won’t want something additional. I truly hope Cain can overcome this - it’s a politcal set-back becasue his whole campaign was built around it.”
I completely agree. However, even if Cain gets booted, comprehensive tax reform is now a major topic for the 2012 election. Palin, Gingrich, Cain and the rest of *us* aren’t going to let comprehensive tax reform die, even if it gets put off until 2016. The genie is out of the bottle. Thank you Mr. Cain.
“Art Laffer has endorsed the 999 plan”
Art Laffer has endorsed the 999 plan because Art Laffer is one of the authors of the plan, along with Stephen Moore, and Rich Lowrie. He is endorsing his own plan, without bothering to mention that he is one of the authors of it. Just a little deception there, wouldn’t you say?
Flat tax is the way to go.
Boy are you ever trying to make a square peg fit the round hole of your preconceived opinions.
Like Newt said. Like the plan or not, give Cain Credit for challenging the decades old status quo, when the status quo is obviously broken and will not get fixed on its own.
warning that the criticism Cain endured at Tuesday night's Republican presidential debate shows his proposed 9 percent national sales tax might have to go.
There will always be some taxes, and sales taxes (relative to income and capital gains taxes) incentivize investment. But the prospect of having to pay more to buy stuff makes Cain’s plan a hard sell particularly to less well-off Republican primary voters. And I doubt retailers who depend on customers who don’t have a whole lot of money will like it. Walmart probably sees a 9% national sales tax as a dagger aimed right at their heart. Cain needs to get out in front of this and convince people of the value of a partial transition to sales tax as opposed to higher income and corporate taxes, lest this part of his 9-9-9 plan become a millstone around his neck.
Check this out:
WSJ poll (in progress):
45% think it is a good idea
34% think it has possibilities
20% think it is a bad idea
Total votes: 9052
http://online.wsj.com/community/groups/election-day-684/topics/do-you-think-herman-cains
oh I don’t think so at all
Any plan goes under tweaking hopefully. It is a beginning
Cain may not be the most well rehearsed person on a debate stage, and barely held his own last night defending 9-9-9, but quite honestly you put him in a Corporate Board Room, or the White House Situation Room, and his ability to take charge in the worse of possible situations, I think will astound those around him.
Of course I read the article. First sentence says it, “One of the key economists who helped Cain craft his plan...is backing away from a key component”
I guess we read what we want to read and, no I’m not a newbie - been a freeper for a long time.
If Cain changes a major provision in his plan (National Sales Tax) politically - he’s in trouble. To his credit he has done very well with the critics. If he was smart he’d give some major speeches on each aspect of the plan. He has the spotlight.
After they file for all the deductions and the minimum earned tax credit almost 50% of the population pays no federal taxes under the current tax code but under Cain the TALKER 9-9-9 tax plan they would be paying 9% tax on their income and without any allowed deduction plus another 9% on almost everything they purchase including the basics such as food and clothing.
If a family of four makes $ 50,000 they will pay $ 0 in Federal taxes after all they file all these deductions and as if they did not pay any taxes including the FICA taxes, zero, zilch, nada, it is not very hard to understand this.
Now under Cain current 9-9-9 tax plan the same family would be paying $ 4,500 in federal taxes on their income with zero deductions. Suppose they spend 50% of his income buying stuff he would pay another $ 2,250 in sales tax. Therefore under Cain current 9-9-9 tax plan this family would end up paying a total of $ 6,750 a year in federal taxes where as under the federal current code he is paying $ 0.
It is a disaster and there is no other way to spin it.
IBTZ!
Good post.
“I like Cain and may still vote for him...”
Total BS, TROLL. Pound sand.
READ the article teddy. You seem immune to fact.
IBTZ!
jgge is another TROLL. Check out his history.
FWIW Here’s Mr. Cain’s explanation as of the 17th:
Fellow Freepers (excluding Trolls), you’ll find this transcript informative:
9 responses to 9 false attacks on the 9-9-9 plan
North Star Writers Group / Herman Cain Author ^ | October 16th, 2011 | Herman Cain
Posted on Monday, October 17, 2011 2:08:56 PM by RockyMtnMan
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:
Claim 1:
The 9 percent sales tax, which is one third of the formula, is regressive and hurts the poor, many of whom pay no federal income taxes now.
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 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 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 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 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 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 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 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 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?
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