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Bold, Brash, and Wrong [9-9-9]
National Review Online ^ | 10-17-11 | The Editors

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 plan’s peculiarities of design, substantive weaknesses, and political naïveté render it unworthy of conservative support.

Cain’s 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 Cain’s 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 ...


TOPICS: Business/Economy; Editorial; Government
KEYWORDS: cain; caintrain; dummy; moretaxes; morons; newtaxes; politicalnaivete; politics; socialism; taxes; teaparty; vat
A better way to tax consumption would be to start with an income tax and then exempt the returns to capital. This approach may have less superficial appeal than the alleged “simplicity” of 9-9-9. But it would run none of the risks of a VAT, it would leave home values unaffected, and it would give seniors no reason for concern. And it could conceivably happen, unlike 9-9-9.
1 posted on 10/17/2011 3:26:03 PM PDT by La Enchiladita
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To: La Enchiladita

And the Editors’ plan is ......?


2 posted on 10/17/2011 3:33:32 PM PDT by Loyal Buckeye
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To: La Enchiladita

Don’t these IDIOTS get it????? Half of America does NOT PAY INCOME tax....WHAT you TAX you get LESS OF!


3 posted on 10/17/2011 3:34:08 PM PDT by goodnesswins (My Kid/Grandkids are NOT your ATM, liberals! (Sarah Palin))
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To: La Enchiladita

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.


4 posted on 10/17/2011 3:34:43 PM PDT by ziravan (You don't have to be a rocket scientist to be President. . . but it helps!)
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To: La Enchiladita

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.


5 posted on 10/17/2011 3:35:44 PM PDT by Longbow1969
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To: All
Has anyone seen something written by Thomas Sowell relative to a workable tax system and/or thoughts on any of the candidates’ tax plans?
6 posted on 10/17/2011 3:36:00 PM PDT by LuvFreeRepublic (Support our military or leave. I will help you pack BO!)
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To: La Enchiladita

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.


7 posted on 10/17/2011 3:37:09 PM PDT by Steamburg (The contents of your wallet is the only language Politicians understand.)
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To: La Enchiladita

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.


8 posted on 10/17/2011 3:39:00 PM PDT by ziravan (You don't have to be a rocket scientist to be President. . . but it helps!)
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To: Loyal Buckeye

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.


9 posted on 10/17/2011 3:41:29 PM PDT by HANG THE EXPENSE (Life is tough.It's tougher when you're stupid.)
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To: Loyal Buckeye

Endorse Romney like they did in 2008.


10 posted on 10/17/2011 3:41:34 PM PDT by VanDeKoik (1 million in stimulus dollars paid for this tagline!)
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To: La Enchiladita

No thanks.

I’ll stick with the conservatives answer on Cain’s plan (particularly the Reagan conservative)

Art Laffer (of Reaganomics) Endorses Cain’s Plan
http://www.humanevents.com/article.php?id=46828

Reagan Economist Breaks Down 999 Plan
http://video.foxnews.com/v/1217420754001/reagan-economist-breaks-down-999-planReagan

Rich Lowrie Discusses Herman Cain’s 9-9-9 Plan
http://www.youtube.com/watch?v=9iKkDcDmf7I

Paul Ryan Likes Cain’s Plan
http://www.humanevents.com/article.php?id=46850

How is Herman Cain’s 9-9-9 Plan Good for America
https://sites.google.com/site/giveemcain/home

Club for Growth defends Herman Cain, 9-9-9 plan
http://www.politico.com/news/stories/1011/65967.html#ixzz1alhFr6NM

Can Herman Cain’s Plan work?
http://axdwhiteman.info/index.php?option=com_content&view=article&id=102%3Acan-herman-cains-999-plan-work

Why We Need Herman Cain’s plan:
http://www.nerds4cain.com/Blog/archives/759

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.”
http://politics.blogs.foxnews.com/2011/09/22/fox-first-cain-reveals-his-economic-secret-kitchen-cabinet#ixzz1aaTbfWLN

What do these numbers mean for me?
http://www.nerds4cain.com/Blog/archives/723

53% of People Favor Tax Code that Treats Taxpayers Equally
http://www.rasmussenreports.com/public_content/business/taxes/october_2011/53_favor_tax_code_that_treats_all_taxpayers_equally


11 posted on 10/17/2011 3:42:48 PM PDT by justsaynomore (Cain 2012 - http://teamcain.hermancain.com)
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To: VanDeKoik

It’s positions like this that explain why I no longer subscribe to National Review.


12 posted on 10/17/2011 3:44:01 PM PDT by TheConservator ("I spent my life trying not to be careless. Women and children can be careless, but not men.")
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To: La Enchiladita
>>>>>>Cain’s ultimate objective is a 30 percent national sales tax

Hadn't heard that one before. Prelude to a VAT.

13 posted on 10/17/2011 3:44:19 PM PDT by Reagan Man ("In this present crisis, government is not the solution to our problem; government is the problem.")
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To: La Enchiladita

This is just outright lies, unworthy of any further discussion. The moderator should pull this thread.


14 posted on 10/17/2011 3:44:47 PM PDT by Mister Da (The mark of a wise man is not what he knows, but what he knows he doesn't know!)
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To: La Enchiladita

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.


15 posted on 10/17/2011 3:48:45 PM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: ziravan

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?


16 posted on 10/17/2011 3:50:47 PM PDT by bigbob
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To: La Enchiladita
Et tu, National Review?

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.

ML/NJ

17 posted on 10/17/2011 3:53:22 PM PDT by ml/nj
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To: freekitty

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)


18 posted on 10/17/2011 3:59:04 PM PDT by justsaynomore (Cain 2012 - http://teamcain.hermancain.com)
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To: La Enchiladita

“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?


19 posted on 10/17/2011 4:11:28 PM PDT by monkeyshine ( The path of the righteous is beset by the inequities of the selfish and the tyranny of evil men)
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To: monkeyshine
Where do they get this from?

They get it from being lying socialist bastards.

20 posted on 10/17/2011 4:14:34 PM PDT by ROCKLOBSTER ( Celebrate Republicans Freed the Slaves Month.)
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To: La Enchiladita

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.


21 posted on 10/17/2011 4:17:25 PM PDT by Wuli
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To: Longbow1969
Can’t support 999 myself.

IRS lover!

22 posted on 10/17/2011 4:18:27 PM PDT by ROCKLOBSTER ( Celebrate Republicans Freed the Slaves Month.)
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To: La Enchiladita
I thought this comment/response from the article said it well...

"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.

23 posted on 10/17/2011 4:18:49 PM PDT by Jane Long (Soli Deo Gloria!)
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To: Loyal Buckeye

I think the editors’ plan is Mitt Romney.


24 posted on 10/17/2011 4:20:57 PM PDT by HapaxLegamenon
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To: Reagan Man

>>>>>>Cain’s 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?


25 posted on 10/17/2011 4:21:47 PM PDT by rolling_stone
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To: La Enchiladita

“...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.


26 posted on 10/17/2011 4:29:36 PM PDT by steveab (When was the last time someone tried to sell you a CO2 induced climate control system for your home?)
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To: TheConservator

The editorial wasn’t even well written.

And I didn’t like that the actual author didn’t put his name on it.


27 posted on 10/17/2011 4:36:48 PM PDT by fightinJAG (NO REPRESENTATION WITHOUT TAXATION! Everyone should pay taxes, everyone should pay the same rate.)
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To: bigbob

What you said, every word!


28 posted on 10/17/2011 4:38:20 PM PDT by fightinJAG (NO REPRESENTATION WITHOUT TAXATION! Everyone should pay taxes, everyone should pay the same rate.)
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To: Reagan Man

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.


29 posted on 10/17/2011 4:41:31 PM PDT by monkeyshine ( The path of the righteous is beset by the inequities of the selfish and the tyranny of evil men)
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To: monkeyshine

Exactly.

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.


30 posted on 10/17/2011 4:42:50 PM PDT by fightinJAG (NO REPRESENTATION WITHOUT TAXATION! Everyone should pay taxes, everyone should pay the same rate.)
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To: La Enchiladita

Isn’t National Review where Bill Kristol squats? If so, I think that they will back anything that Romney puts out.


31 posted on 10/17/2011 4:44:44 PM PDT by stratboy
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To: ROCKLOBSTER

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.


32 posted on 10/17/2011 4:46:14 PM PDT by fightinJAG (NO REPRESENTATION WITHOUT TAXATION! Everyone should pay taxes, everyone should pay the same rate.)
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To: freekitty

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.


33 posted on 10/17/2011 4:46:37 PM PDT by monkeyshine ( The path of the righteous is beset by the inequities of the selfish and the tyranny of evil men)
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To: Wuli

Well said!


34 posted on 10/17/2011 4:47:38 PM PDT by fightinJAG (NO REPRESENTATION WITHOUT TAXATION! Everyone should pay taxes, everyone should pay the same rate.)
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