Posted on 10/21/2011 9:51:46 AM PDT by justsaynomore
Herman Cain gave a speech today in Detroit introducing “Opportunity Zones” in his 999 plan. In short, if you are at or below poverty level, the plan will be 9-0-9.
While he was delivering it, I must say that it occurred to me that he was sounding more presidential than ever. That’s the first time I’ve had that thought.
Read the details of the opportunity zone here:
Cain’s Vision for Renewing Cities across the USA
http://www.freerepublic.com/focus/f-news/2796060/posts
Oh, the unions are crapping bricks over this.
That makes me happy.
FWIW Here’s Mr. Cain’s explanation as of the 17th:
9 responses to 9 false attacks on the 9-9-9 plan
North Star Writers Group / Herman Cain Author ^ | October 16th, 2011 | Herman Cain
Posted on Monday, October 17, 2011 2:08:56 PM by RockyMtnMan
Do you know why candidates for office tend to be reluctant to propose detailed plans? Because they know the plans will be flyspecked and picked apart by just about everyone. Inviting criticism doesn’t help you to get votes.
But fear of criticism prevents you from conceiving solutions to problems. So even if avoidance of criticism helps in propelling you to an election victory, how are you supposed to effectively govern? How are you supposed to fix the problems you told everyone you were going to fix?
That’s why I’m happy to see so much criticism of the 9-9-9 plan I’ve proposed. It shows that people are thinking seriously about a substantive idea. When people stop obsessing over “gaffes” and campaign strategy, and start honing in on fixing the country’s economic problems, we are getting somewhere.
This is not to say, of course, I’m going to leave poorly founded criticisms of the plan unanswered. Certain objections to the plan are circulating in the usual places, driven by the same kind of thinking that has left us with a stagnant economy, $14 trillion in debt and mounting entitlement obligations.
These criticisms deserve responses, and here they are:
Claim 1:
The 9 percent sales tax, which is one third of the formula, is regressive and hurts the poor, many of whom pay no federal income taxes now.
Response:
This claim ignores some important aspects of the plan. One is that we eliminate the 15 percent payroll tax, which allows for no deductions at all – not even for charitable contributions.
Some critics have argued that the poor still come out behind because employers pay much of the payroll tax. That demonstrates a basic misunderstanding about how compensation works in the business world. An employer decides to accept a certain cost-of-employment for each employee, and the employer’s share of the payroll tax is part of that cost. It comes out of your compensation whether you realize it or not.
Also, a flat tax is not – by definition – a regressive tax. Everyone pays the same rate. And it is not an added tax, but a replacement tax, whose total burden is determined by the consumer’s spending decisions.
Finally, the best way to help the poor is by spurring economic growth, which the current tax code will never do, and which the 9-9-9 plan is specifically designed to do.
Claim 2:
Creating a new tax is merely setting the stage for higher rates on all taxes, as untrustworthy politicians will surely raise them.
Response:
First of all, that is not a criticism of the 9-9-9 plan. It is a criticism of politicians. If you don’t want the rates raised, don’t elect politicians who will raise them. Even if we repealed the 16th Amendment and eliminated the income tax, as some demand in return for establishing a consumption tax, politicians could raise that rate too.
What’s far more important here is the fact that the very simple, flat-rate structure of the 9-9-9 plan, which allows no deductions, loopholes or exemptions (with the exception of charitable contributions for the income tax), is a far more growth-friendly tax structure than the mangled mess of rates, taxes, exemptions and ill-conceived incentives we have today. It virtually eliminates the massive compliance costs of the current tax code, and it restrains the size of government.
By taking away the politicians’ gateway drug of loopholes and deductions, we make it much more difficult for them to mess with the tax code.
Having said that, any plan could be criticized for what it would look like if someone messed it up. The plan as I’m proposing it is a huge improvement over the status quo.
Claim 3:
The plan redistributes wealth from the poor to the rich.
Response:
It does no such thing. It is fair and neutral, taxing everything once and nothing twice. What’s more, we are getting ready to propose empowerment zones for economically struggling areas in which the rates will be even lower. That will allow the poor to benefit even more from the plan than they already would.
Claim 4:
The plan should have included a pre-bate to offset the sales tax.
Response:
The last thing we need is to establish another federal entitlement, which the proposed pre-bate would quickly become. And it’s not necessary.
The consumption tax replaces ones already embedded in prices. It’s not the prices that would increase, but the visibility of the taxes being paid.
Right now, money is deducted from your paycheck and you never see it, so it doesn’t feel like you paid a tax. But you did.
With the 9-9-9 plan, you feel it, and I suspect a good many people who clamor for higher taxes will start to feel differently as a result. But they won’t be paying more than before. They’ll just be more aware of it.
Claim 5:
The business tax represents a new tax on labor.
Response:
Paul Krugman of the New York Times makes this claim because we do not allow businesses to deduct the cost of labor from their taxable revenue. But the claim is bogus for several reasons.
First, we are reducing the corporate tax rate from 35 percent to 9 percent, so the tradeoff is a much lower rate paid on more of a company’s income.
Second, we treat capital and labor the same, both with the corporate tax and with the income tax. That is fair and neutral.
What’s more, the current system taxes both capital investment by business and capital gains by individuals. That’s a double tax, and the 9-9-9 plan eliminates it.
Claim 6:
The numbers don’t add up. The 9-9-9 tax wouldn’t generate enough revenue.
Response:
Several groups apparently “ran the numbers” and came to this conclusion, including Bloomberg News and the Center for American Progress.
Our report, which they do not appear to have read, demonstrates that it generates the same revenue as the current tax code, and our methodology is visible for anyone to see.
Those who are making this claim should release their scoring so their methodology is as visible as ours.
Claim 7:
The 9-9-9 plan is a really an 18 percent value-added tax plus a 9 percent income tax.
Response:
That’s an argument? That some might be able to give it a disagreeable label?
What we have done is split the incidence of the tax so it is harder to evade – since you’d have to dodge two taxes, not just one, to save the 18 percent. And by eliminating loopholes we’ve made that virtually impossible to do anyway. I don’t really care what people call it. What matters is how it works.
Claim 8:
Some people (like Herman Cain) who may live off capital gains, would pay no income taxes. Is that fair?
Response:
First, one of the benefits of the 9-9-9 plan is that, even if someone doesn’t pay much or any of one of the taxes, he or she is still likely affected by the other two.
More to the point, though, everyone has the same opportunity to work hard, earn capital and put that capital at risk. Whatever I have earned has come from hard work, good decisions (and some bad ones), a willingness to take risks and a constant honing of strategy. Nothing is stopping anyone else from doing the same thing.
I realize many are being told there are no opportunities available to them, but that is not true and I wish people – for their own sakes – would stop listening to such doom and gloom and come to understand all the opportunity that truly exists, and learn how to access it.
Claim 9:
It won’t pass.
Response:
Politicians propose things that can pass. Problem-solvers propose things that can work. One of the worst instincts of Washington types is to judge an idea not on its substantive merits, but on their perception of its political viability.
I do not underestimate the challenge of getting any good idea through Congress, but I have said all along that if you propose a good idea, and the people understand the idea, they will pressure Congress to pass it.
So there. I welcome the robust discussion and the many questions that are being raised about the 9-9-9 plan. Asked and answered. What else do you want to know?
How about everyone being 9-0-9 instead of making it about what class of person you are?
I thought the whole point was to start reducing the number of people paying zero? To start reducing the 47% who pay nothing, because if this keeps growing there’s no way we’ll ever have enough people voting for people proposing spending cuts - which is the ony way to control our budget problems.
yes!
trumka, the communist, was yelling on tv about cain.
I downloaded the pamphlet. It was a good speech, to a small crowd....but the word is getting out. That man is a breath of fresh air from the politics as usual.
Hop on the Cain train!
999 is a tax cut for almost everyone, except the poorest.
Opportunity zone is a tax incentive, not a handout, to get the poorest off welfare and into jobs so they can start with THEIR end of the tax burden.
Opportunity zones drive a stake into the heart of liberal strongholds - unions and education. No tax break unless hte area is right-to-work and allows school vouchers
I think many folks are not thinking about the fact that low income areas are a HUGE drain on our nation in entitlements. Let’s get rid of entitlements and get people working again.
For the “what about me, I need a job” people - Cain’s regular 999 plan has been scored and predicted to create 6 million jobs, and cut unemployment in half.
I watched same speech, had the same thought. This guy is a leader & a communicator, head and shoulders above any contender for some time.
I am off the Cain wagon now.
So lets just encourage companies to move our jobs to urban hell holes?
Government should not make different laws or regulations for different people, groups or places. Period.
I agree with you. If Obama had proposed this Freepers would be going crazy.
9-9-9 is supposed to be revenue neutral??
Well, that’s just another reason to oppose it.
Redistribution of jobs is what this will cause.
I get the feeling that this 9-9-9 plan is being changed on the fly.
A flat tax is a much simpler thing.
As I've said before, I'm against hand outs to "motivate" people...but I am ALL FOR opportunity that does away with lib strongholds of "freebies". Opportunity zone tax breaks for right-to-work and school voucher areas...I like.
I don’t know about that but I’m pretty sure the plan would create a booming economy again.
What will it be tomorrow? The 9-0-0 plan?
Because the last 9 affects the ‘disadvantage’ also.
How can we seriously support a plan, which sounded good when he proposed it, when it seems to undergo daily revisions?
Congrats for getting off the Cain Train. I think more will join you as he continues to reveal his flip flopping and inexperience.
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