401k's are not tax-free, they are only tax deferred.
Your money that you draw out of your 401K will be taxed, wouldn't you like it at the lower 9% rate? It wasn't taxed when you put it in the 401k, because they are going to tax it when you withdraw it. 401k's are not tax-free, they are only tax deferred. All of the retirement accounts will have taxes collected upon withdrawal.
If my top tax rate is 15% I am really paying something less because of the current 10% bracket (from the Bush cuts), so my rate is about 12%. Take away my simple deductions and exemptions and it may come up to 15%. So you're suggesting that I'd like to pay 9% income tax and 9% sales (all is spent), for a new total of 18%. [A lower cost of products won't help because everybody gets it.] Again, I PAID PAYROLL TAXES on all I put into the 401k (and all workers are currently paying it). It might be a great deal for those starting work after the plan is implemented but (I've read all the promise ladden replies) its not a good deal for anyone older. I like CAIN, and I know the plan would never get implemented as stated, but this is a problem.
I would suggest he set up an official, and more sophisticated, calculator and address the concerns of those who pay more. He should either say, "This plan is perfect!", and lose my vote, or state, "There may be some issues and it may need some tweaking or temporary tax limitations on previous earnings, but the basic goal of simplicity can still be maintained."