Cain's 9-9-9 Plan Gets a Closer Look

[Weapon X]

Cain's 9-9-9 Plan Gets a Closer Look

Liberals Say '9-9-9' Proposal Will Hurt Poor; Conservatives Criticize Sales Levy

By JOHN D. MCKINNON

Herman Cain's surge in the polls is focusing new attention on his "9-9-9" tax plan, but also raising new questions about whether it does everything it claims.

The former restaurant-company executive and Republican presidential candidate says his plan would raise at least as much revenue for the government as the current system, generally keep taxes level or even lower for low-income earners, and spur economic growth.

Liberal critics, however, say it would raise less revenue while boosting the tax burden on the poor. Some anti-tax conservatives and business people, meanwhile, argue that the plan's new federal sales tax might tempt lawmakers to spend too much, in addition to damping down consumer spending growth and penalizing producers of new goods and services.

In its basic outlines, Mr. Cain's plan sounds simple enough. It would scrap the current system—with its income-tax rates as high as 35% for high-income individuals and for corporations—and replace it with a 9% personal flat tax, a 9% corporate flat tax and a 9% national sales tax.

Mr. Cain made it clear Wednesday his plan remained a work in progress. Visiting Concord, N.H., he added several new wrinkles. He would preserve the deduction for charitable donations, making the flat income tax not so flat; he would exempt any used goods, including previously owned homes and cars, from the national sales tax; and he would allow businesses to deduct new equipment purchases from their 9% corporate income tax, as long as the goods were U.S.-made.

Asked how that would apply to a computer designed domestically but containing Malaysian components and assembled in China, he replied, "I have no idea."

Under the plan, current taxes on capital gains and other investments would be reduced or eliminated in an effort to boost the economy. Mr. Cain also proposes to eliminate the payroll tax and instead fund entitlement programs such as Social Security from the simplified tax structure.

The plan also would largely curb the special income-tax deductions and credits that help many people of all income levels, as well as many businesses, reduce their tax bills.

But some critics say the plan can't reduce taxes for lower- and middle-income earners and bring in the same revenue as the current system. Given the big reductions in investment taxes that the Cain plan promises, "it's got to raise taxes on the vast majority of households," said William Gale, a tax expert at the Brookings Institution, a Washington, D.C.-based think thank. "And if it doesn't raise taxes on the lower middle class, then it's got to lose a lot of revenue" for the government.

Conservative tax activists and some business people have attacked the plan's sales tax. Such proposals in the past have presented "a number of significant challenges," because they have applied to new homes and some related expenses, said Robert Dietz, an economist at the National Association of Home Builders.

Mr. Cain and his advisers play down these concerns. The plan "will produce initially the same amount of revenue that's being generated today from the payroll tax, the capital gains tax, corporate income tax, personal income tax and the death tax," Mr. Cain said Wednesday on CNBC.

At Tuesday's GOP candidate debate in New Hampshire, Mr. Cain said that "we've had an outside firm ...dynamically score it, and so our numbers will make it revenue-neutral."

That firm, Fiscal Associates Inc., found that Mr. Cain's plan would raise about $2.3 trillion—or roughly the same amount as the current tax system—without counting the economic growth it would produce. Counting such growth, the new system would raise about $2.66 trillion, according to the firm's estimate. "It looked pretty straightforward to me," said Gary Robbins, a conservative tax expert who is president of the consultancy. "I'm pretty comfortable" with the results.

It was not known whether the calculation takes into account the exemptions Mr. Cain announced Wednesday.

Mr. Cain said on CNBC his plan was "not regressive" in its impact on lower-income workers, primarily because it would eliminate their payroll taxes. And speaking to reporters in Concord, Mr. Cain said that exempting used goods from the federal sales tax would ease its effect on poor people.

Adding to the questions the plan, Mr. Cain and his top economic aide—Rich Lowrie, an Ohio wealth-management adviser and conservative activist—have said they got assistance in designing it from well-known economists, but have declined to name them.

—Jonathan Weisman contributed to this article.

Cain: ‘I Have No Idea’ How My 999 Plan Would Work

Former Godfather’s Pizza CEO Herman Cain’s 999 plan — which would scrap the current tax code in favor of a nine percent personal income tax, nine percent corporate income tax, and nine percent sales tax (on everything, including food) — was the undeniable star of the GOP’s primary debate this week, with the number nine warranting 85 mentions during the course of the evening. As we’ve been reporting, the plan would entail a huge tax increase on the poor while slashing taxes on the rich.

Cain, when faced with analyses showing how much his plan would wallop the low-income Americans, dismisses them, calling them “erroneous.” But as it turns out, Cain isn’t particularly well-versed in the nuances of his plan. Asked how his proposed corporate income tax would apply to products built in other countries and designed and sold in the U.S., Cain replied “I have no idea“:

Mr. Cain made it clear Wednesday his plan remained a work in progress. Visiting Concord, N.H., he added several new wrinkles. He would preserve the deduction for charitable donations, making the flat income tax not so flat; he would exempt any used goods, including previously owned homes and cars, from the national sales tax; and he would allow businesses to deduct new equipment purchases from their 9% corporate income tax, as long as the goods were U.S.-made.

Asked how that would apply to a computer designed domestically but containing Malaysian components and assembled in China, he replied, “I have no idea.”

Even the Cain campaign’s own economist said the 999 plan “wouldn’t be the one I picked” to run with. Remember, the plan was crafted by a Koch-affiliated financial adviser from a Wells Fargo branch in Ohio, not an actual economist.

As ABC reported today, a long list of economists “say Cain’s plan would be a tax hike for the lower middle class and a tax windfall for the wealthy.” Conservative economist Bruce Bartlett wrote that, “at a minimum, the Cain plan is a distributional monstrosity.” Cain would surely dispute these assertions, but how seriously can his protests be taken if he freely admits he has “no idea” how the plan would even function?

Edited October 13, 2011 by Weapon X

[WallyWeaver]

My thoughts on Herman Cain's 9-9-9 plan?.... Nein, nein, nein!

Creating a new method of taxation fixes nothing. Getting rid of the Fed. fixes pretty much everything.

My solution: End the Fed.

There are only 2 candidates, from the Bloomberg debate, who are willing to get tough with the Fed.:

Dr. Paul and Ex- Speaker Gingrich.

[Darry]

This writer has a ridiculously biased slant... he mentions Cain's one comment - "I have no idea" - no less than four different times in his short article. I'm getting tired of all this social engineering.

He probably also likes the new sheeple's mantra - TAX ME MORE, I'M RICH. Why is no one asking big corporations like GE, EXXON, etc. to pay their fair share? Can anyone say LOBBY?

[Weapon X]

This writer has a ridiculously biased slant... he mentions Cain's one comment - "I have no idea" - no less than four different times in his short article. I'm getting tired of all this social engineering.

He probably also likes the new sheeple's mantra - TAX ME MORE, I'M RICH. Why is no one asking big corporations like GE, EXXON, etc. to pay their fair share? Can anyone say LOBBY?

just so you know there are 2 articles in that post, so yes the "I dont knows" will seem alot.

The purpose was to show you 2 different articles from 2 different sources stating the same thing

[yota691]

folks that don't retain common sense like to spin four words!! He intends to purse the fair tax which his 9 9 9 plan is the start. His goal is take power of the elected folks an give it back to citizen of the USA.

[caz1104]

just so you know there are 2 articles in that post, so yes the "I dont knows" will seem alot.

The purpose was to show you 2 different articles from 2 different sources stating the same thing

WeaponX-2 different sources does'nt mean they are'nt biased. FYI I'm not a Cain supporter but I do believe the mainstreet media is slanted strongly to the left.

[Weapon X]

WeaponX-2 different sources does'nt mean they are'nt biased. FYI I'm not a Cain supporter but I do believe the mainstreet media is slanted strongly to the left.

Sorry but the reality is very simple 9-9-9 is a pipe dream.

[lambert]

Herman Cain is da man! Ron (does anybody love me but these 3 to 4 thousand nut cases) Paul will fade faster than the cubs in the NL do every year. Get over it. He is a Losertarian by nature.

[caz1104]

Sorry but the reality is very simple 9-9-9 is a pipe dream.

Maybe,but the more people are informed the likelihood of the demise of the fed and irs. It may not be in our lifetime but its a comin-imo

[ems]

I find it refreshing that a candidate would be honest enough to say, "I have no idea." Most politicians would BS their way out of it or flat out lie about it.

[BrokeNoMore]

How many threads do we need about Herman Cain's 9-9-9 proposal today from WeaponX?

[caz1104]

Sorry but the reality is very simple 9-9-9 is a pipe dream.

Another thing that chaps me raw is this neverending witch hunt by the left towards the mean wealthy not payin there fair share. What about the 40-45% that don't pay a dime? I don't hear/read the unbiased media bring that up at all. Now if we want to level the playin field for all,would'nt making EVERYONE(individual & corporate) pay taxes be a good way to start. Nahhhhhhhhhhhhhhhhh that'll never happen cause the left would loose a big voting base if they started taxing em.

[design interrupted]

Another thing that chaps me raw is this neverending witch hunt by the left towards the mean wealthy not payin there fair share. What about the 40-45% that don't pay a dime? I don't hear/read the unbiased media bring that up at all. Now if we want to level the playin field for all,would'nt making EVERYONE(individual & corporate) pay taxes be a good way to start. Nahhhhhhhhhhhhhhhhh that'll never happen cause the left would loose a big voting base if they started taxing em.

By your comments Caz, I would say you're a business owner. It amazes me how differently business owners look at elections than those who work for someone else. I know my social views haven't changed much since college, but my fiscal views sure have. It sure chaps my hide the goverment wants to keep taking more and having us give more (like higher priced healthcare packages) while many employees IMHO don't pay their fair share - if they pay at all.

[BrokeNoMore]

Another thing that chaps me raw is this neverending witch hunt by the left towards the mean wealthy not payin there fair share. What about the 40-45% that don't pay a dime? I don't hear/read the unbiased media bring that up at all. Now if we want to level the playin field for all,would'nt making EVERYONE(individual & corporate) pay taxes be a good way to start. Nahhhhhhhhhhhhhhhhh that'll never happen cause the left would loose a big voting base if they started taxing em.

Just recently, it's over 50% collecting some kind of assistance.

I think if we stopped screaming about taxing more (especially the "rich" who are actually CREATING our GNP) and plugged the holes of spending on the lazy, the entire problem would be solved. You increase taxes on those who create our economy...and the whole thing flies south.

In our country we passed laws to kill the unborn...and all their potential, while ever protecting the non-contributing members on an ever-increasing, expanding basis. At some point the people who work will be UNABLE to pay the expenses of those who don't. It's basic economics. And we are moving the fulcrum so far in the wrong direction that we won't be able to tip it back at some point.

Capitalism has become a dirty word in our society, but if we don't want a global economic meltdown...we'd better elect one for POTUS.

[design interrupted]

Anyone on board for a flat tax? The more you shop the more you pay. If you can only afford to buy beer and cigarettes you pay to feed your habits. If you can afford to buy a yacht or think you need a boob job, you pay to feed your need to impress

[BrokeNoMore]

By your comments Caz, I would say you're a business owner. It amazes me how differently business owners look at elections than those who work for someone else. I know my social views haven't changed much since college, but my fiscal views sure have. It sure chaps my hide the goverment wants to keep taking more and having us give more (like higher priced healthcare packages) while many employees IMHO don't pay their fair share - if they pay at all.

AGREED. I closed my business of 25 years because of laws that require me to pay people who will watch TV if not supervised, instead of doing their work...even when proven on video surveillance. If they are clocked in, it matters not what they do. The employer pays.

This entitlement mentality in our culture is taking it down fast, and I'm so concerned that it will take it down hard. I hope that our RV helps us save our economy. And I plan to spend every dime, as much as possible, on our US economy, and not a DIME to China. I look forward to being able to afford expensive US made clothing.

Anyone on board for a flat tax? The more you shop the more you pay. If you can only afford to buy beer and cigarettes you pay to feed your habits. If you can afford to buy a yacht or think you need a boob job, you pay to feed your need to impress

I think property tax is the most unethical. Income tax is the second. Sales tax is ideal. Don't tax productivity. Tax spending. Way better for the human psyche.

So yes and no. I'm on board with only sales taxes.

I'd also like to see ALL hidden taxes done away with. No gas taxes, etc. All kinds of taxes are hidden in our cost to purchase items. If those are special tax rates added to the sales of items--sales taxes at 8% or whatever, except for cigarrettes, a carton costs $4 but the taxes an additional $6, for example...it would make it easier for the average uneducated under-informed American to vote with their dollars.

I'm all for complete transparency.

A government does need money to operate. But not like our sick bloated US government.

[caz1104]

By your comments Caz, I would say you're a business owner. It amazes me how differently business owners look at elections than those who work for someone else. I know my social views haven't changed much since college, but my fiscal views sure have. It sure chaps my hide the goverment wants to keep taking more and having us give more (like higher priced healthcare packages) while many employees IMHO don't pay their fair share - if they pay at all.

We keep hearin it's only a .01 sales tax on this or just another 2% income tax on that,the list is never ending. My question is when are we as a people goin to say enough is enough? We can't as a country continue to go down this path of tax destruction.

Anyone on board for a flat tax? The more you shop the more you pay. If you can only afford to buy beer and cigarettes you pay to feed your habits. If you can afford to buy a yacht or think you need a boob job, you pay to feed your need to impress

count me in

[randalln]

just so you know there are 2 articles in that post, so yes the "I dont knows" will seem alot.

The purpose was to show you 2 different articles from 2 different sources stating the same thing

Just so you know the computer that are talking about is APPLE and as of now they don't pay tax to build (only to sell here in the states)so this guy needs to do more research ...............

Also Google ,MS,Yahoo ,ect.ect all are offshore and pay very little tax .............

O and lets not forget Nike,Ralf loren (polo) American Outfitters all these companies have huge factories overseas ONLY DISTRIBUTED HERE...................

[WallyWeaver]

Herman Cain is da man! Ron (does anybody love me but these 3 to 4 thousand nut cases) Paul will fade faster than the cubs in the NL do every year. Get over it. He is a Losertarian by nature.

You're right about that.... Herman Cain is the Fed's man!

It's too bad you view Paul as a "losertarian".... hope you enjoy paying more than double for that brew in your hand in the next few years because of inflation (thank you Bernanke)!

Do you understand the concept that the Federal Reserve is robbing us blind? I have a prediction for you: If Herman Cain becomes President I guarantee you the national debt will be higher when he leaves office than when he was sworn in.

No offense to Mr. Cain, he is a very likeable guy. But unless we get a President who is willing to pull a Thomas Jefferson or an Andrew Jackson ( or even a John F. Kennedy) we are going to be in a lot of trouble, in my opinion.

[WallyWeaver]

Anyone on board for a flat tax? The more you shop the more you pay. If you can only afford to buy beer and cigarettes you pay to feed your habits. If you can afford to buy a yacht or think you need a boob job, you pay to feed your need to impress

First ask yourself this: why do we need a flat tax? or a fair tax? or an income tax? Where does all of that money go now? Is it being well spent?

Who thinks our tax dollars are being spent well?

I don't think the method of taxation is the problem... I think taxation is the problem.

My opinion is a fair tax, a flat tax, or an income tax are all unnecessary. Find out where that money goes and you will, too.

[caz1104]

Just recently, it's over 50% collecting some kind of assistance.

I think if we stopped screaming about taxing more (especially the "rich" who are actually CREATING our GNP) and plugged the holes of spending on the lazy, the entire problem would be solved. You increase taxes on those who create our economy...and the whole thing flies south.

In our country we passed laws to kill the unborn...and all their potential, while ever protecting the non-contributing members on an ever-increasing, expanding basis. At some point the people who work will be UNABLE to pay the expenses of those who don't. It's basic economics. And we are moving the fulcrum so far in the wrong direction that we won't be able to tip it back at some point.

Capitalism has become a dirty word in our society, but if we don't want a global economic meltdown...we'd better elect one for POTUS.

Capitalism will always be a dirty word to those that depend on welfare to support themselves. Destroy the productive to support the non............................ummmm that makes sense right?..............................NOT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11

First ask yourself this: why do we need a flat tax? or a fair tax? or an income tax? Where does all of that money go now? Is it being well spent?

Who thinks our tax dollars are being spent well?

I don't think the method of taxation is the problem... I think taxation is the problem.

My opinion is a fair tax, a flat tax, or an income tax are all unnecessary. Find out where that money goes and you will, too.

I like your way of thinking-excellent post

[design interrupted]

First ask yourself this: why do we need a flat tax? or a fair tax? or an income tax? Where does all of that money go now? Is it being well spent?

Who thinks our tax dollars are being spent well?

I don't think the method of taxation is the problem... I think taxation is the problem.

My opinion is a fair tax, a flat tax, or an income tax are all unnecessary. Find out where that money goes and you will, too.

I appreciate your thought process, but Rome wasn't built in a day.

[WallyWeaver]

I appreciate your thought process, but Rome wasn't built in a day.

Not sure what you are trying to say here.

Please explain.

[littlefeet]

You're right about that.... Herman Cain is the Fed's man!

It's too bad you view Paul as a "losertarian".... hope you enjoy paying more than double for that brew in your hand in the next few years because of inflation (thank you Bernanke)!

Do you understand the concept that the Federal Reserve is robbing us blind? I have a prediction for you: If Herman Cain becomes President I guarantee you the national debt will be higher when he leaves office than when he was sworn in.

No offense to Mr. Cain, he is a very likeable guy. But unless we get a President who is willing to pull a Thomas Jefferson or an Andrew Jackson ( or even a John F. Kennedy) we are going to be in a lot of trouble, in my opinion.

HEY WW !

JFK was the last one to screw with the FEDS.......wonder if things have changed ???????

Edited October 14, 2011 by littlefeet

[lambert]

Anyone on board for a flat tax? The more you shop the more you pay. If you can only afford to buy beer and cigarettes you pay to feed your habits. If you can afford to buy a yacht or think you need a boob job, you pay to feed your need to impress

I like your thinking girl! makes way too much sense eh?