With the first primary voting less than three months away (!), I suppose I should check in on the Republican Presidential candidates, who held a debate last night. I’d rather let Andrew Sullivan give me the nickel summary:
Huntsman I can understand and appreciate. Perry is an empty bad suit. Romney lies with such facility it unnerves me. Bachmann is a fanatic, as, although I am extremely fond of him, is Ron Paul. Santorum just seems like a lost child from the 1950s, trying to have the campaign he dreamed about when he was ten. Cain is an egomaniac businessman with a talk show host patter and a mild wit. Gingrich is a giant, gaseous asshole.
I think it’s Mitt Romney and the Jordanaires at this point.
But we might as well focus on Herman Cain, this week’s next big thing, particularly because of the policy initiative he rode to the top of the rest of the field. His 9-9-9 Plan is a flat tax dressed up in fluffier clothing. I think practically every GOP Presidential nomination campaign since Reagan has had at least one flat-taxer: Jack Kemp in 1988, Steve Forbes in 2000, Mike Huckabee in 2008, and now Herman Cain. The plans have a simplistic logic to them until people realize it’s basically another scheme to redistribute wealth upward.
Here’s the short version of 9-9-9:
A major source of contention at Tuesday night’s debate was Herman Cain’s 9-9-9 plan, which is basically a pair of proposals: deep cuts in the existing federal taxes on individual and corporate income, both of which would be reduced to a flat rate of 9 percent from existing rates that run above 30 percent, combined with a new 9 percent national sales tax.
Mr. Cain has provided only a broad sketch of how such a plan would work, making it impossible to evaluate exactly how much money the government would raise.
So there only is a short version with no details, then. But if it’s just a pure flat tax on individuals and corporations at 9% and a 9% sales tax, you’re talking about a plan where the poor will pick up the tax burden for the rich. Other taxes would actually be eliminated. All profits from multinational corporations made in foreign countries would go untaxed under his plan. All taxes on capital gains would be reduced to zero. The payroll tax would go away, at a cost of $800 billion a year to Social Security. The estate and gift tax would be abolished. The government would have massively less revenue than they acquire today. And in its place, poor people would pay 9% of their income in taxes, without exception, and a 9% sales tax on everything they buy, without exception. That means sales taxes on food, doctor visits, rent, housing purchases, car purchases, everything.
And 9-9-9 is actually a step to the actual Fair Tax, as explained by Republican economist Bruce Bartlett:
And here’s the kicker in the Cain plan. Phase 2 is merely a transition to yet another fundamental tax reform. In Phase 3, the United States would adopt the so-called Fair Tax, which would replace all federal taxes with a 30 percent sales tax on all goods and services. In a previous post, I explained why the Fair Tax is a bad idea. I went into more detail in testimony before the House Ways and Means Committee on July 26.
Whatever one thinks of the Fair Tax, it makes not the slightest bit of sense to have a plan that requires fundamental changes to the federal tax system twice to achieve its objective.
Veterans of tax reform attempts in the United States know reform is very difficult and time-consuming even once. If the Fair Tax is a good idea, Mr. Cain ought to just proposed it, without confusing the issue with his unnecessary and highly complicated 9-9-9 plan. After all, one of the prime selling points of the Fair Tax is its simplicity, and the 9-9-9 plan is far from that.
Cain has muttered about creating certain zones where low-income residents will get rebates. But either the government will have to get by on far less revenue, or poor people will have to shoulder the burden for huge tax cuts on the rich and corporations.
Cain got some heat from fellow Republicans at the debate last night for his dopey plan, and he responded that the plan is being misrepresented. Math has a liberal bias. Anyway, it’s hard to represent something that has a bumper sticker instead of realistic numbers attached to it. Even when the numbers are released, I suspect they will look something like the “dynamic scoring” dodge that is a feature of Paul Ryan budgets, where pretend astronomical growth makes up for huge tax cuts.
The point is that these flat-taxers always flame out, even in Republican primaries. The plan sounds real nice until you look past the bumper sticker.




38 Comments

Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL News Desk
In the history of the country, is there ANY candidate for POTUS that was less qualified than a one-time CEO of a slightly-less-than-average pizza chain?????? Who, when, where, and WHY did this man and, apparently some others too, think this guy COULD BE PRESIDENT? The only more disallusioned moron up there is Rick Santorum who hasn’t even been able to beat “don’t know” in ANY polls.
One of you better pieces David. Although the best lines are from Andrew.
I anxiously await the “post mortem” results in the polls.
Now hold on one gosh darn minute.
Even sensible centrist David Brooks finds something to like in Cain’s
666999:Of course, Bobo was a big fanboy of Paul Ryan as well.
well it depends on what you mean qualified? seems you just have to be a corporate puppet, so he fits the profile
Cain not able.
LOL!
good one.
slightly O/T.
I’m researching, for my own personal masochistic pleasure, the more conversative reactions to OWS. Yeah, a lot of the usual stuff, but then I found this.
http://market-ticker.org/akcs-www?post=195841
this would explain the sudden aboutface of Eric Cantor and the faux sympathy of the debates last night. They must all be getting a HUGE earful from Tea Partiers.
Was this discussed already?
Math has a liberal bias
It does?
$1 trillion spent to keep unemployment under 8.8%, millions of jobs created, “Green Energy” companies going gangbusters.
Let’s see….carry the 1…divide by .46…times 87…subtract the square root of 935…nope, the math just doesn’t work, even when Stimulus Jr. (also known as the Obama Jobs Bill) is added to the equation.
Time to face facts, there are all sorts of dopey plans out there, the GOP doesn’t have a corner on that particular market.
I’ll give you that one. I have to agree.
OT but crazy
First, let me emphasize that this is not a parody. It’s a real story, with quotes and facts and everything. Bill Workman is a Republican state legislator with a bold plan to help Florida’s economy: he wants to lift the ban on dwarf tossing to create jobs. Yep. Here’s a true quote:
“I’m on a quest to seek and destroy unnecessary burdens on the freedom and liberties of people,” Workman said. “This is an example of Big Brother government.
“All that it does is prevent some dwarfs from getting jobs they would be happy to get,” Workman said. “In this economy, or any economy, why would we want to prevent people from getting gainful employment?”
Dwarf tossing — not a term I would prefer but that’s what they call it — was banned in Florida in 1989.
“The people who were thrown were alcoholics with low self-esteem,” said Robert Van Etten, 62, an engineering consultant and former president of Little People of America. “Many of them were injured. One committed suicide.”
Bringing dwarf tossing back to Florida is a step backward, he said, a move that signals a permissive air of mockery on an entire class of people.
“It’s something that brings out the worst element in some people, and it’s focused on people who are the most vulnerable,” Van Etten said.
Workman is actually crafting a bill to repeal the ban, which he will present to the Florida State Senate. The Palm Beach Post, amusingly, is calling the bill “Leave No Tossed Dwarf Behind.”
http://offthebench.nbcsports.com/2011/10/06/florida-lawmaker-wants-to-repeal-dwarf-tossing-ban-to-create-jobs/#comments
That is definitely interesting…I wouldn’t have expected that from Denninger as anything vaguely Progressive is generally kryptonite for him and his minions. And as you can see in the comments the Soros/radical fringe claims are already flying.
9-9-9 is a step toward Citizen Cain’s dream world in which the tax burden falls entirely on salaries and wages, while investment income and capital gains go untaxed. Up from serfdom, in reverse.
Huh, seems like there’s a “Hands off my body” privacy concern in that law.
Herman Cain: a former deputy chairman (1992–94) and chairman (1995–96) of the board of directors of the Federal Reserve Bank of Kansas City.
Significantly, as ceo of Godfather’s Pizza, he wins the Metaphorical Award, since the FR is about as godfatherish as you can get with its offers we can’t refuse. With the name of Cain, he also wins the Biblical Warning award.
Why do the republicans think this guy could be president?
Bottom line: Because he’s black and he could peel off black voters from obama.
I think you have a great idea. That was an amazing article.
It’s a risky strategy–faced with the prospect of having no white major-party candidate to vote for, a lot of Republicans may just stay home on Election Day and weep into their stars n’ bars
I’m aware of this and it makes me sick to my stomach.
My point is that, to quote George Will, “The office of president is not an entry level position.” Our presidents traditionally were/are senators, governors, VP’s, a general or two, members of SCOTUS. “Pizza man” doesn’t seem to “measure up” to our usual standards. Neither does three term member of the House of Representatives.
In all honesty….. 1/3 term in the U.S. senate and “former community organizer” appears not to be working out too well. I had doubts about that until McCain put Sarah Palin a heartbeat from the presidency. At that point, choice became pretty obvious.
You know, like they are supposed to do in the Senate. But don’t.
Putting the banksters in jail would be a good first step, but it is take a hell of a lot more than that to make me trust any of them again.
Could be a strategy……but I think they’ll keep that as “Plan B” in the event ALL the white candidates get killed in a plane crash. Save Rick Santorum.
My fave comment from the debate last night was from (I think) Bachman, who suggested people should consider what you get if you turn 999 upside down.
That said, I agree the tax code needs to be radically simplified in form. I got an A in Personal Income Taxation in law school, but can’t competently do my own tax return. The IRS people can’t understand the Code either, you get diff answers every time you ask diff IRS people the same question. Why should working people need a professional to do their tax returns? It’s fucking scandalous. Think of all the wasted money.
I’m telling you the reason for the 9-9-9 is because Little Ceaser’s Pizza had a super successful ad campaign for a long time where they said “999, 2 pizzas, 2 quarts of pop 999″. It played constantly on tv. They started opening hundreds of stores. Way bigger than anything Herman was doing with Godfather Pizza. Now Herman may be a dope but he knows pizza advertising. I’m sure Little Ceasers was blowing his crap chain away. It’s easy for him to remember too. Not like Uzi Uzi Bah Bah Barecki, Bah ber Ann.
Moron.
What’s insidious about any flat tax is the predisposition it establishes against further change. If the country falls into a revenue hole (which is guaranteed, over a long enough timespan), adjusting taxes upward to cover the shortfall means EVERYONE pays more, not just those who can afford it. And revenue shortfalls are most likely to happen in times of economic distress, making tax hikes even more onerous for the poor and middle class.
I wish someone in our responsible MSM would actually analyze the consequences of adopting idiotic policies like Cain’s 9-9-9, and roast him on a spit for proposing it.
With all due respect, the reason the stimulus was a dismal failure was largely the responsibility of the GOP. They insisted that it be laden with tax breaks that didn’t work. The actual part that the people from the left side of the aisle promoted actually were stimulatory. Things like food stamps and unemployment actually had more bang than the dollar placed into it. The CBO scored it so you can actually see whose policies worked and whose didn’t.
That isn’t to say that Obama and the Democrats aren’t idiots for going along with the GOP and not making their case better but acting like the “stimulus” was solely a Democratic plan is extremely disingenuous.
The upside would be that the mask would be off in 4 years time. I have little doubt that he’d be a one term President and if Tea Partiers feel like they are taxed enough already – just wait until they have to pay 9% on every single transaction they make(and still get stuck paying local taxes to boot.)
Anyone that thinks this plan is the answer is a complete dolt. The lower end of the economic ladder would lose their standard deductions and pay 9% in addition to having to pay sales tax. So the guy making $40,000 a year would pay a tax of $3600. That leaves him $36,400 to live on. Then he’d be paying a “tax” on everything he “spent”. Even if by some miracle he’d manage to “save” 10% to fund his retirement he’d be looking at paying another $2948 on his income. He’d be paying $6548 in federal taxes AND be responsible for his own retirement plan. The federal taxes for a SINGLE person making $40,000 right now is about $4700. Taxes under the Cain plan would increase for Joe Average by $1800. Meanwhile anyone who was fortunate enough to derive his income from investments instead of labor or people fortunate enough to be born into wealth can get off scot free. So much for that whole Republican schtick where we talk about “incentivizing the concept of not working(Pssst GOP, that’s basically what this plan does.)
A Republican plan to redistribute wealth upwards?? Oh say it ain’t so!
while the post has many good points and I agree that Cain’s 999 plan is not a good one, the basis is quite odd.
Redistribute upward??
Since, I think, his plan calls for eliminating deductions, there wouldn’t be any distribution.
No taxes on anyone would give the wealthy the biggest share of wealth compared to the poor.
So, any tax redistributes downward. Especially when there are no deductions given out to favor any high income group.
You could say the plan causes the re-distribution of wealth to be less in favor of the poor.
re-distributing upward would entail taxing the poor and giving to the rich and not taxing the rich at all.
But, I suspect the basis of it all is a false idea that all money belongs to the government and they are just letting all citizens use it. Somehow believing that the government is “paying” wages to people through the tax system.
Aside from all that, the plan isn’t a good one anyway and would never get passed. As some justice once said, the power to tax is the power to destroy, and no politician wants to give us his or her power to destroy. It is too heady a power. A flat tax would take that power to single out one group to destroy or favor–they will never give it up.
As we all know, when it comes to taxes, there is no equal protection of the law.
I disagree. I show an example above to partially demonstrate what an individual making $40,000 would be facing using the Cain plan. Now let’s pretend I’m a trust fund baby. My parents leave me a million dollars. I can then avoid taxes by making my money as a member of the investment class(something someone making $40,000 a year isn’t going to have the luxury of doing.)
Additionally this plan would be disasterous for American companies since it would incentivize buying your products abroad for those fortunate to have the choice. Who here doesn’t doubt that million dollar trust fund baby would purchase his products from another country if we told him he had to pay a 9% federal tax in addition to the local taxes on his yacht?
I think the basic point is the average American would not have the means to shelter their income like corporations and the rich would. Therefore the services our government offers such as ensuring clean potable water would be on the backs of the bottom and middle to a larger extent since you are decreasing taxes on the top substantially. This would increase income inequality even more. Additionally the loss of programs like Social Security would have a much larger impact on the poor and middle class.
The basics of this plan are horrible on so many levels because it basically continues to encourage behaviors like offshoring or investing in overseas operations rather than investing in infrastructure here. I can’t believe that the base that isn’t the 1% could think this idea is a good one.
This man did come out of nowhere. Thinking he is a foil. This man appears to be cruel and unsympathetic. He in no way, shape or form reflects anything that I would want for America. Who is writing his superficial lines?
Well we know a certain percentage who enjoys screwing over the “shiftless welfare-receiving, baby-making po’people”. Of course they’re giddy over this.
You make good points.
As I said, I don’t think Cain’s plan is too good. And, other than the fact it would never pass, is the VAT type tax of 9%. yeah, it would give us a sales tax similar to the VAT rate in many countries (around 17% with state and local added), it does skew toward the poor.
AND, even more important, it would be a foot in the door and would get raised as time went on. I remember my state used to have a sales tax of 4%, now it is 8%.
I am in favor of a flat tax for corporations with no deductions possible. That makes sense. It would be simple and save a lot of time and money BS’ing with tax lawyers, etc. And, make sure places like GE would not avoid taxes.
But, for individuals, it isn’t too workable.
The top 1% would be the biggest benefactors from this because of how this would affect investment and inheritances. Taxed Enough Already folks, who are frequently misguided by this idea that most of government money is squandered on the poor will find themselves in for a rude awakening as more and more of them become those “welfare needing folks” under this plan. Their income would get taxed and then they’d face a consumption tax too. Additionally, all that money they poured into Social Security would likely be forfeit since it would no longer have a specific revenue stream. Who here believes that without a specific revenue stream that the GOP wouldn’t be arguing that it needs to be means tested within 4 years?
Duplication of point above.
I am not the biggest fan of business (particularly poorly regulated ones)but what I really think we need to deal with is the “investment class” in this country. Rich people who do the equivalent of the poor schmuck buying scratchers at the local convenience store(and let’s face it when computers actually use algorythems and the average stock is held for seconds that is what Wall Street investment firms are selling)shouldn’t get a free ride while the guy who works at the local Walmart pays for all the services he consumes plus the investment class.
I’m willing to work with the GOP on business. I disagree with them on regulation, most of derugulation has been horrible for average Americans, but I do understand that like the average American, alot of the business sector(particularly small business)are worried about a precarious global economy and are trying to maximize their budgets.
My biggest problems are with a stock market that is not necessarily aligned with what is best for this country(versus global) and our government(which it is becoming more and more apparent is dysfunctional).
Now, if the guy working at Wal Mart risked his salary each day, I might agree with you. If it was possible that at the end of the day, that Wal Mart worker might find he lost his day’s wages for some reason, or worse, also lost the previous day’s wages, you might have a point.
But, Wal Mart workers don’t run that risk. At the end of the week, they get their check.
It always looks easy from the sidelines.
I know lots of people who lost their ass in the stock market day trading or similar. The people who can actually make consistent money are RARE. The ones who can manage other people’s money and make THAT make money too, are very rare. What, out of 300 million people you maybe have 1,000 or 2 that could do it on any kind of long term basis.
First off EVERYONE risks on a daily basis. Opportunity cost doesn’t just exist for the investment class. The guy at Walmart always has the risk that the business he has invested his time in will go belly up. He risks losing his job if he doesn’t agree to take hour cuts. He risks losing benefits if that business decides to eliminate health care coverage. Everyday folk not invested in the stock market can tell you all about how their “investment” in a home worked out. So I disagree with this notion that somehow or someway that “investors” are taking bigger risks than Joe Average. Furthermore, they’ve(ther big investors) had their every move catered to as they cheered shipping jobs overseas and company CEOs (who by the way are a HUGE member of the investment class since much of their compensation is in the form of stock)engage in scorched Earth policy. The average investor is a gambler. He doesn’t hold his stock for years and years, he holds it for seconds.
http://www.nakedcapitalism.com/2011/01/guest-post-michael-hudson-average-stock-held-for-22-seconds-and-average-foreign-currency-position-held-for-30-seconds.html
Furthermore, the average investor doesn’t have a single stock he has a portfolio. That minimizes his risks(as opposed to the poor guy who puts his seven years of labor in one basket only to get a pink slip.)
If I buy a lottery scratcher and I win, I pay a large tax on my winnings. Quite frankly the guy who holds his stock for a grand total of 22 seconds ought to be paying a similar amount for his “investment.” I have no problem with making exceptions for long term stock holds but it’s time the investment class have the same amount of skin in the game as those of us that have seen our livlihoods diminish simply so they could have a better return on their investment.