Cain Economic Advisor: 9-9-9 Plan to Add $2 Trillion to GDP

CNBC ^ | 10.13.11 | Michelle Fox

[casablanca]

Republican presidential hopeful Herman Cain’s 9-9-9 plan will add $2 trillion to U.S. GDP, as well as create 6 million jobs, his economic advisor Rich Lowrie told Larry Kudlow Thursday.

Lowrie also said under the plan, business investments will increase by one-third and wages will go up by 10 percent.

“And if you fold all that growth together,” he said, “federal revenues go up by 15 percent.”

Cain’s 9-9-9 plan would scrap the current tax code and replace it with a 9 percent tax on personal income and corporations, as well as a new 9 percent sales tax.

[jwalsh07]

And your solution is another revenue stream with small increases in temperature barely noticeable to the frog until his eyes boil? Your cutting spending is exactly on point, give Herman a call.

[LADY J]

'Same here. Earlier in the day on FNC's Special Report panelist Steven Hayes explained that Cain's 9-9-9 is actually the 2nd part of a 3-part plan, with Part 3 being the elimination of the federal income tax and the IRS altogether, leaving only a national sales tax. (I have no idea what Part 1 is). That was the first I'd heard that, so I'll have to look into it more."

Herman Cain's 999 Plan HERMAN CAIN'S 999 PLAN - PART 1 & PART 2.

Link to CAIN 999 PLAN

[Mr. Mojo]

Thanks Lady J. Makes more sense now. 999 would have to be the first part of the plan.

[Major Matt Mason]

Perhaps, but it would be interesting to see if a GOP-controlled Congress actually would go along with it. I bet they wouldn't go along with drastic cuts.

[who_would_fardels_bear]

If this is the case, and since I believe in a flat tax, then I would tax all earnings at one rate.

That would mean an end to the misnamed 'capital gains' tax.

There is one conservative principle which states that the government shouldn't pick winners and losers. One of the ways that the government tries to do this is by taxing different activities at different rates. If we believe in this conservative principle then there should be no difference between 'capital gains' and wages.

Another conservative principle is that the government shouldn't try to do social engineering with the tax code. Taxing 'capital gains' less than wages is a form of social engineering, i.e. encourages more people to be investors and fewer people to be wage earners.

Another conservative principle is that we shouldn't lie to ourselves. The vast majority of trades have nothing to do with 'investment' in the way economists mean when they talk about 'investing in our future', 'investing in our infrastructure', or 'investing in technology', etc. If we really want to violate the other two conservative principles then we should regulate trades in such a way that we can clearly demarcate true investments from mere speculation. Then we can favor investment over rent-collecting, wage-earning, etc.

Of course we can always throw principle to the wind and be the sort of conservatives that are merely 'pragmatic'. We can look at past history and say that every time something we mischaracterized as a 'capital gains' tax is lowered, the economy booms. But becoming out-and-out pragmatists has its downsides. After all, it is often the 'pragmatic' thing for individuals or businesses to take their profits and use them to lobby government officials rather than invest in R&D, etc. Free market theory suggests that in the long run such rent seeking will ultimately lose out to companies that compete on price, service, and quality of goods.

However when I look at the long run I just see more and more companies acting pragmatically in their own interests directly and indirectly creating an ever-expanding tax code and regulatory environment to the detriment of the economy as a whole.

[casablanca]

But you have to admit, having a president in the trenches trying hard to sh*tcan departments and shovel bureaucrats out the door would be the most refreshing thing since Reagan.

[Hugin]

Don’t knows how it works where you are, but most places sales taxes are for sales by retail businsses only, not stuff sold privately. The only people who might be audited are retail businesses.

[Meet the New Boss]

I agree with you on the not picking winners and losers and not doing social engineering.

But I disagree with you on the “lying to ourselves” bit.

Even under the current tax code, people who trade securities as a business (whom you would no doubt consider speculators) pay tax on their income/loss at ordinary rates either by marking-to-market or as short-term capital gains.

But people who take earnings that have already been taxed and place that money with a long term holding period in an investment are not speculators.

[JSteff]

I’d like to see the math worked out, please.

And the electorate would fall asleep. They can't handle programing their DVR's or cell phones and you think that he should explain to the public about his plan? REALLY? Oh sorry, I mean, REALLY?????

Have you made the same statement to obama about his claims, say about his health care lie? Have you asked for obama's proof his jobs bill would add several 100k green workers to work within 2 years? Do you hold the liberals CURRENTLY in office to accountability? Why not make a call to them first on a forum like this, or DU???????

Nice try. I thought not. Back to the bong, it is close to the weekend.

[JSteff]

why should government give tax advantages to some businesses over others?

Would you prefer he gave them to existing businesses (which you are inferring it excludes..I don't believe it does). Making the climate for business more friendly will allow the ones you claim he did not specify, to get on a path and confidence to grow and expand. Something which DOES NOT exist right now (unless you are on the DNC friends list--solyndra).

Or did I misread the current business climate? How did Reagan get businesses to borrow and spend on more growth? Right, it worked before, follow success.

[JSteff]

I think the details and unintended consequences are undesirable

Are you referring to simplistic like green jobs, or maybe a-l-a obama/dems national health care fiasco?

Right, good idea, after all, national health care passed both houses of congress. Had to be good.

You are right, simplistic. Dems and the occupy wall street crowd like those type of programs.

[JSteff]

the chance to regain personal privacy and take power from the Feds is huge

You are correct, and sadly, many on this forum would rather see a "simplistic" type of plan just like the current tax code and the national health care plan obama got both houses to pass a few years back.>

[JSteff]

BUT NO SALES TAX WITHOUT REPEALING INCOME TAX AT THE SAME TIME!

Actually ANY CHANGE to the current tax code just invites ALL politicians to tap into all streams of income and never end any current taxes we have.

That is why calls for enactment over the years of "fair tax" / "flat tax" have never started with an ending of the current tax codes. It is just what the tap the public types want.

[JSteff]

who really gives a shit if 9 9 9 meets your standard

Many do not care, it is all starting to remind me of the last presidential election.

"It is my vote and I can cast it for anyone I want."

We ended up with obama and crew. Read the tag line I had since before we lost the last one.

We need to recall the last election, but I fear we are headed there again.

Who do you think soda mayor and kegal want sharing the womans bathroom at SCOTUS?

[JSteff]

Seems like you would just prefer the current system we have. How about showing us all how it would be worse!

crickets chirping....

[JSteff]

Pretty weak arguments for how bad Cains idea MAY BE, and how wonderful obamas current management IS.

Obama does not even need to campaign. Am I hearing a call to repeat 2008?? Sounds like the only thing that will keep many happy.

If all want something better, work it out... but don't wish and work for a loss to make you right.

[Nervous Tick]

>> you think that he should explain to the public about his plan? REALLY?

Yeah. Really.

>> Have you made the same statement to obama about his claims, say about his health care lie?

Of course. Many times.

>> Have you asked for obama’s proof his jobs bill would add several 100k green workers to work within 2 years?

Duh. Of course. And there is none.

>> Do you hold the liberals CURRENTLY in office to accountability?

Duh. No sh!t.

>> Why not make a call to them first on a forum like this, or DU???????

That “DU” dog don’t hunt. Asking a candidate to back up their fanciful claims is neither unreasonable nor off limits. Oh, except for you members of the koolaid cult I suppose. Flavor of the month: Cainiac Cherry. Last month’s flavor: Sarah Syrup.

By the way, if you take your meds maybe you can keep that parkinson’s finger of yours from repeat-keying the question mark a dozen times. Questions in English end with exactly one question mark.

[Grunthor]

“Cain’s endorsement of RINO Romney was a *major* lapse in judgment. Do you agree?”

No moreso that Perrys’ endorsement of Rudy or Newts (more recent) endorsement of Scozzafava.

[Major Matt Mason]

But you have to admit, having a president in the trenches trying hard to sh*tcan departments and shovel bureaucrats out the door would be the most refreshing thing since Reagan.

Oh, absolutely! I didn't say he shouldn't try to do it.

[who_would_fardels_bear]

"It was ALL about SCOTUS. Most forget about that and HAVE DOOMED us for a generation or more."

Fear of losing SCOTUS gave us eight years of RINO GWB which has doomed us for possibly a century.

BTW, there are three branches of government. If the executive branch and the legislative branch were doing their job then the judicial branch would have much less of an effect.

About the only good thing that GWB did was appoint a few good justices, but that doesn't make up for No Child Left Behind, TARP, Department of Homeland Security, Medicare Part D, etc.