Posted on 10/17/2011 11:08:56 AM PDT 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?
We’re still over a year away from the actual, you know, *election*.
That’s the only poll that matters.
000 is not a gimmick it puts more people on the taxpayer roles and makes the taxes more visible. By doing such, voters are more informed and spending will have to come down. It takes the hidden and puts it out into the open. What makes you think its a liberal tax and spend scheme, its revenue neutral by law.
zogby is an unreliable unscientific internet poll. You discredit yourself by citing it. There are reliable scientific polls that support your opinion that Cain is the flavor of the month, don’t ya know?
Regardless, Cain is obviously nothing more than a Stalking Horse for Romney to split up the Conservative vote so that Romney can win with less than 30% of the vote.
so who are the conservatives in the race?
Yes, but it blows up the meme that Cain is a stalking horse for Romeny when Cain is beating the snot out of Romney.
It still seems more likely to me that Bachmann was convinced to enter the race to (unwittingly) act as Romney’s stalking horse. The softball question Mitt asked her at the last debate (Michelle, would you tell everyone how wonderful you are?) only cemented it for me. Ironicly, Bachmann doesn’t seem to have a clue she was being used from the start.
Cain is not a stalking horse, he’s a wild horse.
Cain declared before Paul? You got a source for that? Never mind, I'll search.
Herman Cain Formally Declares May 21, 2011
ooopsie guess you had that wrong. Ohhh, maybe you meant of the sane candidates?
First of all, thank you for your service.
Do you think that it’s possible that Herman Cain has received questions about his 9-9-9 plan from more than one person through his website? And that neither he nor his (limited) staff has time to answer all questions individually, and instead he tries to answer the most frequesntly asked questions when he makes public statements? I guess that Cain could send everyone who writes about the 9-9-9 plan a long response answering common questions that people have about the plan, but that’s not exactly what you had in mind, either. Maybe Obama has enough paid staffers (or volunteers) to send out responses to all questions (although I doubt it), but I wouldn’t interpret the fact that Cain doesn’t have the time to answer each of the thousands of questions that he receives as evidence that he doesn’t care about retired persons.
Cain proposed a Liberal Tax and Spend Scheme without any proposal for Tax Cuts
He doesn't have a detailed plan, it's more of a synopsis of an idea. Half of his "details" are about how it's just an intermediate step to another plan.
Here is the pdf of the plan: Herman Cain's vision for Economic Growth - Part I. I'm guessing there's more coming later. Here is the "details" of the 9-9-9 plan. I tried to strip them out of the "vision", since the vision covers things other than 9-9-9:
Phase 1 - Immediate Boost : no 9-9-9 items here.Phase 1 - Enhanced Plan
• Achieves the broadest possible tax base along with the lowest possible rate of 9%
• It ends the Payroll Tax completely – a permanent holiday!
• It ends the Death Tax
• Business Flat Tax – 9% :Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders
• Empowerment Zones will offer additional deductions for payroll employed in the zone
• Individual Flat Tax – 9%: Gross income less charitable deductions
• Empowerment Zones will offer additional deductions for those living and/or working in the zone
• National Sales Tax – 9%: This gets the Fair Tax off the sidelines and into the game.Phase 2 – The Fair Tax: The Fair Tax would ultimately replace individual and corporate income taxes (throws out the 9-9-9 plan)
That's it. There's also a summary of what he predicts would HAPPEN with the 9-9-9 plan, but there are no details of the plan.
If it was a detailed plan, it would answer questions such as:
a dozen bullets in a 2-page campaign flier is not a "detailed plan". Romney had a detailed plan -- it was 150 pages long. I don't see people tearing Romney's plan apart, because you know exactly waht it is.
So I guess the question is, as Cain says, why hasn't Cain done a detailed plan?
I always use the title from the article and ‘title’ from the drop window, if I am looking to see if it has already been posted.
I use a prominent word and ‘keyword’ from the drop window, if I’m trying to locate an older article.
I find the sidebars sort of useless. The popular section never seems to change and has articles that are months and months old. How can something that hasn’t been posted to in several months be ‘popular’ and remain at the top of that section, while active threads fall off? lol
The "current tax code" has been in existance through quite a few rounds of solid economic growth. The very suggestion that our economic troubles are because of our tax code is absurd. Improving our tax code could help economic growth, but the real problem is government regulation and Obama "stimulus" that is destroying jobs rather than creating them.
The poor will not benefit from the plan. It is clear that the rich will pay less in tax under the plan. The plan is revenue-neutral, which means government gets the same total taxes as before. Since rich people will pay less, and Cain admits the tax burden will be broader, it is clear that there will be many poor people who will pay more in taxes than they do now.
This is obscured by discussing the plan in pieces; Cain suggests earlier that the 9% income tax will be less for the poor than the 15.3% payroll tax they won't pay. But every person pays 15.3% payroll tax on their first $120,000. If Cain's plan was really getting rid of that and replacing it with a 9% income tax, he'd have to make up the 6%+ loss in income tax revenue JUST from the payroll tax, in addition to the loss in income taxes from 35% to 9% on all the rich people who don't pay incremental payroll taxes above $120,000 or so.
Since his plan SAYS it makes up all that lost revenue, it is clear something is amiss. What is amiss is he ignores the tax deductions and credits that essentially wipe out the social security payroll tax for the poor. They pay the payroll tax, but get tax credits back on their income tax that more than make up for it.
He's eliminating all credits and deductions, so now the poor will save the 15%, but will pay 9% and get no tax credits. So they will pay more in tax. That's evident, because Cain says his plan "spreads out the tax burden" which means people who currently aren't taxed will now be taxed, and that is primarily the poor.
Of course, I guess you could define an empowerment zone to be anything you want to save the poor from this new burden, but empowerment zones defeat the entire concept of "simplifying the code", since the entire tax industry can move into "empowerment zone lobbying".
You apparently haven’t noticed how much the tax code has changed since the last downturn. Can we say Obamacare? I still say that Obamacare is the biggest strangle on our economy right now.
Cain has not proposed any cuts in government spending. Cain’s only proposal is a Liberal Tax and Spend Scheme.
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Yes he has. He has proposed 10% cuts across the board and deep dives into each agency, including gutting some agencies like the EPA.
And his plan is a tax CUT. It replaces the existing tax code, bringing all the rates down. It is not “on top” of it.
Had oral surgery today but just popped in. Perry doesn’t need a war room of one. His record speaks for itself.
Liar, liar, damnable liar.
Cain was among the first three candidates to sign the Cut, Cap & Balance pledge. Cain's 9-9-9 is revenue neutral meaning cuts *must* take place to reach balance. He supports a Balanced Budget Amendment. In prior debates he's gone so far as to say he'd raise whole departments and rebuild them as necessary, just as he's done in failed businesses, and he'd start with the EPA.
Did you know that "9-9-9" is the default tax scheme in Sim City? That's where he got it. He thinks you're too stupid to notice.
Says Herman, "Running the USA is like selling pizza, but with lots of toppings!"
Cain has NOT proposed any specific Spending cuts, only another Big Government Liberal Tax and Spend Scheme.
I think it's "Flipper, flipper, damnable flopper."
Cain, I mean. He was outraged not so many months ago over the thought of a national sales tax. Now he wants to shove it down everybody's throat.
"If 9-9-9 is good enough for pretend people in Sim City, it's good enough for regular folk," says Herman.
You allege that Cain has proposed “specific tax cuts,” name them specifically and do NOT claim that a small vague “across the board” tax “cut” is specific or significant.
Cain has proposed NO specific, significant tax cut, only a Tax and Spend scheme.
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