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Skip to comments.Bold, Brash, and Wrong [9-9-9]
Posted on 10/17/2011 3:25:58 PM PDT by La Enchiladita
Herman Cain deserves credit for proposing a tax-reform plan that is specific, promotes economic growth, and has captured the imagination of conservatives nationwide. His 9-9-9 plan builds on the insight that one of the chief defects of the current tax code is its bias toward consumption over savings. But his plans peculiarities of design, substantive weaknesses, and political naïveté render it unworthy of conservative support.
Cains ultimate objective is a 30 percent national sales tax, but his interim plan is to replace the current income, payroll, and corporate tax codes with three new taxes. A 9 percent income tax would apply to a very different tax base: Capital income would go untaxed, but the exemptions that keep the basic cost of living from being taxed would disappear. A 9 percent value-added tax would be levied on corporations. And consumers would pay a 9 percent retail sales tax as well.
This tripartite scheme makes for a succinct slogan but has little else to recommend it. In particular Cains inability to choose between a sales tax and a VAT is puzzling. The two are very similar in their economic effects. The chief advantage of the sales tax over a VAT is that the latter is considered easier for governments to raise, because it is hidden. The chief advantage of the VAT over the sales tax is that it is easier to enforce without stimulating black markets.
(Excerpt) Read more at nationalreview.com ...
And the Editors’ plan is ......?
Don’t these IDIOTS get it????? Half of America does NOT PAY INCOME tax....WHAT you TAX you get LESS OF!
A VAT tax is not transparent; a sales tax is. Big difference.
Some powerful analysts, including Laffer, Ryan Forbes, and Club for growth disagree with this assessment.
The larger attack here is on the FairTax. A consumption tax is the ideal conservative tax. Whether NR likes 9-9-9 or not, bringing a total revamp of the tax code to the table is the most conservative proposal I’ve seen in decades.
Can’t support 999 myself. No thanks on the consumption tax.
Would be better to focus on what is actually possible - lower income tax rates, less regulation, less spending.
Since this would have to pass in congress, the whole of the plan is either mere window dressing or it is an attempt to start a discussion about where taxes come from and where all that money goes.
Perhaps, if we ask the right questions about spending we will get answers about who candidates can really afford to piss off.
Cain deserves credit and praise for pushing the Overton Window on killing the IRS.
That alone will drown out the criticism of 9-9-9.
The editors, intercourse the editors.They have no plan meaning the current plan in place is just fine with them.Just like romney.NUTTS to them.
Endorse Romney like they did in 2008.
I’ll stick with the conservatives answer on Cain’s plan (particularly the Reagan conservative)
Art Laffer (of Reaganomics) Endorses Cain’s Plan
Reagan Economist Breaks Down 999 Plan
Rich Lowrie Discusses Herman Cain’s 9-9-9 Plan
Paul Ryan Likes Cain’s Plan
How is Herman Cain’s 9-9-9 Plan Good for America
Club for Growth defends Herman Cain, 9-9-9 plan
Can Herman Cain’s Plan work?
Why We Need Herman Cain’s plan:
Office of Tax Analysis for the U.S. Treasury Gary Robbins analyzed and scored his plan. Cain said the analysis shows that his plan will “initially create 6 million jobs and that it will bring the unemployment rate down initially to about half of what it is today.”
What do these numbers mean for me?
53% of People Favor Tax Code that Treats Taxpayers Equally
It’s positions like this that explain why I no longer subscribe to National Review.
Hadn't heard that one before. Prelude to a VAT.
This is just outright lies, unworthy of any further discussion. The moderator should pull this thread.
I don’t like a national sales tax like that. Why should we spend an additional 30 percent? That’s worse than the hidden taxes.
His first sentence gets it right. If you read any of the Austrian econmicsts - Hayek, Schumpeter, von Mises - or even Peter Schiff - they all say that job #1 is to change from consumption to savings. And that’s what the 999 plan does.
Hey 999 haters: guess what? It’s not painless. You can’t have 30 years orgy of over-consumption, easy credit, low interest rates, and not have to pay the bill. We are not too big to fail! The bottom line on 999 is, some will pay a little more, some will pay a little less, but EVERYONE will pay something. I can’t understand how self-described Conservatives can bad-mouth a proposal that puts an end to countless freeloaders. But when they start whining in the next sentence about how they might have to pay a little tax on their new cellphone or big screen, I start to get an idea...
As you say, killing off the monster that the IRS has become should have Conservatives everywhere shouting the praises of 999. If we really believe in smaller, less intrusive federal government - how much more Conservative can you get?
Our tax system is obscene. Mr. Cain is addressing that obscenity. I say this as one of the geezers who will probably come out on the short end. But maybe things will be better for my granddaughter.
The author is referring to the Fair Tax: http://www.fairtax.org
And it is 23% not 30%, but it replaces ALL other taxes (including income and corporate taxes)
“A 9 percent value-added tax would be levied on corporations.”
Where do they get this from? As I understand it, it goes like this:
9% tax on wages
9% tax on corporate profits (gross revenue minus expenses)
9% tax on retail sales of new goods and services.
The above 3 taxes replace ALL OTHER taxes.
Where is the VAT in this scheme?
They get it from being lying socialist bastards.
There is no “VAT” tax in the Cain 9-9-9 plan.
A “VAT” - a “value added” tax, as it is in Europe, is a complex tax POLICY (not even a single universal tax rate) that taxes, at different rates the “added” value of specific goods and services AT EVERY STAGE OF PRODUCTION AND DISTRIBUTION of something until it reaches the cash register.
That gives a VAT another distinct difference from either a flat corporate tax - Cain’s 9% corporate income tax, or a flat sales tax, as in Cain’s 9% flat national sales tax - the VAT is a hidden tax; by the time something gets to the cash register the VAT taxes are already embedded in the price
I am not calling Cain’s 9-9-9 plan “perfect”. Is any tax plan, in existence or proposed, a perfect plan? No.
Yet, how is it that the NRO Editors prefer the very unConservative prospect that continues the Socialist-Crony-Capitalist alliance of their political agendas embedded in the most complex personal and corporate income tax code in the world, and the continuation of their use of the tax code as their corrupt, social engineering, wealth redistribution play-thing, versus the economic certainty of a set of fixed and flat tax rates all around, as in Cain’s 9-9-9 plan?
There are two reasons that the long term, phase two, goal of the Cain tax policy - a 30% national sales tax, does not bother me as it does the NRO editors.
Cain is right to view the conjoined process of a repeal of the 16th amendment along with enactment of a broader national sales tax. Unless the 16th amendment is repealed, how can Congress be trusted with the continued POWER to re-impose a personal income tax, and a 30% sales tax to replace it? They can’t.
But Cain is right to not want to wait for that before junking most of the current tax code for a set of flat taxes immediately. Economically it is right to do - to not wait.
And, as imperfect as 9-9-9 is, I believe it will benefit the economy and THAT benefit, more than the particulars could help sell the “Fair Tax” later on.
It seems the NRO, like the RINos is Congress is not really interested in changing the way Washington operates, or in changing one of the main vehicles for the corrupt shenanigans of Congress - the complex tax code with all its exemptions, exceptions and deductions.
"Ah.. cute.. the RINO editors want to defend poor Mittens from that nasty, actually going-to-cut Gubmint conservative financial hawk, Herman Cain.
Why don't you all go and be editors at Politico where you can fit in with all your fellow progressives."
All the long knives are coming out for Cain, now.
I think the editors’ plan is Mitt Romney.
>>>>>>Cains ultimate objective is a 30 percent national sales tax
Hadn’t heard that one before. Prelude to a VAT.
What part hadn’t you heard before?
“...objective is a 30 percent national sales tax,”
30% seems a bit low. I have heard the total hidden taxes and fees amount about 45%. That would mean an item that cost a dollar buy now would cost $.70 plus $.30 national sale tax. The trick would making sure that no “group” is exempt from collecting or paying the tax.
The editorial wasn’t even well written.
And I didn’t like that the actual author didn’t put his name on it.
What you said, every word!
You’ve been on nearly every 999 thread bashing the plan for the last many days at least, and you just now have learned that Cain plans it as a transition to the Fair Tax?
Personally, I think this 999 plan may be better overall than the Fair Tax since both plans require reporting to the federal government, why bother with the back and forth of money the Fair Tax envisions (and how to determine who should receive their poverty level rebate)? Just leave this flat rate in place.
One of the best things about both 999 and FT are that it taxes tourists and visitors to the USA on their spending. They use our infrastructure and enjoy our electricity and national resources - let them help pay for it directly.
Their editorial made my eyes glaze over after about 50 words; I had to force myself to read it. And I am into these issues and well-versed on them.
NR’s dismissive droning is just the ticket to get their ideas even into the discussion. NOT.
They know as well as anyone that no plan — NO plan — such as this just gets taken to the Washington by the President and it appears the next day without a bunch of things having been hashed out.
To not be excited that for the first time ever the conservative dream of major tax reform is getting true traction — well, don’t let the door hit you on the buttocks, NR.
When Steve Forbes ran on a Flat Tax program, it was considered a political impossibility because that was then and this was now. But the same basic principles were at work in that proposal as in 999.
Isn’t National Review where Bill Kristol squats? If so, I think that they will back anything that Romney puts out.
I’m wondering why NR ignored the principles of 999: broadening the tax bax and lowering rates.
The impact of implementation of policies consistent with those two principles alone on the economy is indisputable. It creates an economic boom over time and increases government revenues.
That is all.
But, no, NR, let’s start droning on about “return to capital” and some such Ivory Tower dinner talk which could never accomplish what Cain has done — which is to get the base and the punditry engaged in a true debate about massive tax reform.
It’s not an additional 30%. The Fair Tax envisions a flat 30% tax on all new goods purchased at retail. That single tax would replace all other national taxes (you would still pay state taxes). The Fair Tax also envisions paying every citizen about $150 every 2 weeks, which is the amount of tax they would pay at the poverty level. That is the FTs way of making sure the poor do not get hit with 30% tax they cannot afford and currently do not pay.
I am not sure if the FT is passable in its current form. That 30% is scary high and people have no sense of perspective on it. Seniors will never go for it because they paid income taxes all their lives and now you ask them to pay 30% on sales?
The senior could go for 999 because they are not going to be taxed on any of their investment gains or capital gains. So they trade their 15$-30% tax rate on their IRAs, 401ks, SS income and other retirement money for a flat 9% sales tax. They would not, imho, trade it for 30% sales tax.