Posted on 10/05/2011 2:05:48 PM PDT by Kartographer
The still-neutral Club for Growth weighs in on Herman Cain's polling surge, in a statement suggesting that Cain has a chance of winning over the powerful advocacy group:
“Herman Cain is surging in the polls because his clear message of limited government and economic freedom is resonating,” said Club for Growth President Chris Chocola. “Cain has articulated a strong vision for putting America back on the path to prosperity. A clear message promoting economic growth, like the one Herman Cain is presenting, is essential to defeating Obama. Republican primary voters ought to give Herman Cain a close look. We are.”
(Excerpt) Read more at politico.com ...
Pinganator!
“Club for Growth flirts with Herman Cain”
Is the next step where they try to “mate up with” him?
Yes! I just sent $200 to Herman Cain, Inc., Friends of Herman Cain, Inc., PO Box 2158, Stockbridge, Georgia 30281. Will you please send what you can to his campaign? God has given America a second chance with Herman Cain! God bless us all. Thank you.
I’ll do that on payday. I encourage anyone who can to send something. Let’s eliminate this idiotic “you don’t have enough money” excuse that the media is reprising time, and time, and time again.
You’ll know it’s truly Game On if Palin decides to endorse him.
I’m starting to think that’s a distinct possibility.
We have to coalesce behind a single non-Romney candidate.
I thought Rick Perry was going to be that candidate. Now it looks like that’s not going to happen.
Now I’m starting to think that candidate is Cain. Palin has the power to make it so.
So the Club for Foreign Growth is embracing Cain’s 999 plan to raise the debt faster until it lowers itself by magic.
psst, it’s called spending cuts.
I wish that we’d see real spending cuts, including shutting down all federal funding to local governments. ...don’t have much faith in politicians, though, or their favored constituents (government employees, government-dependent businesses and globals behind regulations for preventing new domestic competition).
Thus, my desire to see consumers decrease spending, until we have the opportunity to rebuild (at the end of the default process).
well the cuts have to come. Raising taxes won’t procure any cuts. Changing tax policy to favor producers over consumers will help things in both the short and long term. I’m actually confident that even as the overall burden goes down, the government revenue won’t go down much. The more incentive a person has to work hard and get ahead the better off everyone else will be.
Agreed.
Is there an independent analysis of the 999 plan? It should, theoretically, generate revenue that is in range of ~18% of GDP.
That is about the level of taxation Americans are willing to put up with, and a serious effort needs to take place to bring the government spending to that level.
This type of taxation, where tried, was very successful in speeding up economic growth.
A variation of Cain’s 999 has been adopted in most of the Eastern Europe in recent years:
http://en.wikipedia.org/wiki/Flat_tax#Eastern_Europe
Cain has explained this in detail in recent interviews. The plan simultaneously eliminates the payroll taxes for both employer and employee (12 1/2 %), and capital gains taxes of 15%.
The bad news of course, is that everyone would be paying 9% federal sales taxes, which in my view would be offset somewhat by some unknown and unquantifiable reduction in the cost of goods and services purchased-by virtue of the reduction in income taxes on all the producers of these goods and services. The elimination of payroll taxes would also put downward pressure on prices. Free lunch? Not quite, but close.
Many of the benefits of a national sales tax would accrue to our exporters under the 9-9-9 plan, meaning that our manufacturing sector would be juiced by the fact that today’s 35% corporate tax is a component of overseas pricing of exported goods. Conversely, foreigners who came here to manufacture, sell, or just visit on vacation would be making contributions to the US treasury they aren’t currently making.
The problems with the plan occur with low wage earners and retirees.
Low-wage earners who “pay no tax” actually do have taxes witheld, it’s just that the withholding is returned to them along with transfer payments at the end of the year. Would these programs still be in place? Would they have to be enhanced to compensate for a net tax increase, considering the 9% sales tax?
For retirees, the elimination of cap gains would be a plus, but being on fixed income they would have to pay more sales taxes. With some this would be a wash, with others, not so much.
With these problems, the plan still eliminates an awful lot of excess baggage, and economic activity would certainly be enhanced, in particular with manufacturing and real estate.
I’m just trying to get my head around this plan, feel free to shoot holes in my analysis. I’m an employer with 18 employees, not an economist or tax expert.
My understanding is similar to yours. It would definitely help the exporters, and importers would have to contribute something, while they get a free ride under current rules.
One thing I am not clear about is how the sales tax would work vs. value added tax:
Suppose under current rules, Company A buys raw material for $100, sells product for $110.
Company B buys the same product for $110, sells it for $120.
Now if you add 9% tax, Company A buys now for $109, sells for $119.
Company B buys for $119 + tax = 129.71, sells for $139.71
End user buys for $152.28. So if it is only sales tax, it gets paid several times.
OTOH, with value added tax (of say 9%), raw material producer pays 9% on raw materials worth of $100, Company A pays 9% of value added (%10 value added), so tax is $.90, company B pays the same thing, 9% on value added $.90.
Final product consists of value added by all 3 companies ($100 + $10 + $10) = $120 and total value added tax would be exactly 9% of that. Which is why Value Added Tax is better than Sales Tax...
From my point of view, my company provides services that right now are not taxed using state / city sales tax. So my company will have to charge this tax.
But on our expense side, we would save 7.65% right away on FICA + Madicare for all of our employees, wich almost equals the sales tax, meaning cost of our service to end users would not have to go up much.... Just thinking outloud...
Good questions all. I’m not sure either.
It’s being called a sales tax, so perhaps the tax would be only on the ultimate consumer, and collected only by retailers? Is that even do-able?
Another thing we have to remember here is that the corporate income tax of 9% is 9% of net profit, not sales, while the sales tax is on the much higher sale amount. Don’t get me wrong, I like any sales tax that replaces an income tax, but the reduction in the tax cost component in prices would not come close to compensating for the sales tax increase, even though corps currently pay an effective (after loopholes) tax of around 25%. The 16% reduction is on net profits, not sales. With the elimination of cap gains and payroll taxes, though, it could compensate somewhat for the 9% sales tax increase.
I’m not sure the reduction in costs of goods and services by virtue of the lowered income tax has to totally compensate for the sales tax increase for the plan to be overall good for the economy. For me, the increased competitiveness for exporters would create a massive boon to overseas sales of American made goods. You’d see plants in Mexico closed and jobs brought back home, in my view.
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