Herman Cain’s 9-9-9 Plan is Troubling

By Gary P Jackson

I want to like Herman Cain, I really do, but the man makes it hard.

I have a lot of concerns about Cain, not the least of which is his complete lack of experience as an elected official, and a total lack of any record of accoplishment as an elected official. Oh sure, Cain has a solid record as a CEO, but that’s not the same as having a record as an elected executive, who has experience in successfully dealing with a legislature, and actually putting all of the happy talking into action.

Herman Cain has zero foreign policy experience, and his answers to tough questions always seems to be that he’ll simply sublet that out to his advisors. This is scary on many levels. What if he picks morons for advisors? [we’ve seen how well that works with the Obama regime] Also, as the President always takes the lead in foreign policy, not Congress, it would be nice to have a chief executive that actually has a coherent thought on the matter. Foreign policy is at least AS important as domestic issues.

Cain’s supposed strong suit is the economy. After all, he’s a businessman. And yet, he supported idiotic ideas such as TARP, and actually said THIS in 2008:

Wake up people! Owning a part of the major banks in America is not a bad thing. We could make a profit while solving a problem.

Cain also said:

Far from nationalization, purchase of bank stocks is a win-win for taxpayers

You can read his entire column here.

Cain’s thinking falls right in line with President George W. Bush’s “I had to abandon free market principles to save the free market.”

Looking back, TARP and owning bank shares have been an absolute disaster. Far from Cain’s “win-win” naiveté.

Cain’s poor judgment back in 2008 is just the beginning. What worries me today is his so-called 9-9-9 plan. Herman Cain is a salesman at heart, and he’s come up with a catchy idea that a lot of people are sold on, but his plan is even more dangerous than the “Fair Tax” that is being pushed by the criminally insane.

Look, no one disputes the need for serious reform of the current tax code. We need to take away government control. By that I mean we need to reform the system so lawmakers can’t use the tax code to encourage or discourage certain behavior.

Tax credits are often give to people who do things like purchase and install solar panels, or buy hybrid or all electric cars. This is nothing more than a form of cronyism, where-in the lawmakers reward those who support them. I’m using the “green” tax breaks as an example, but government has used the tax code as a form of social engineering, and to reward cronies, for decades.

The United States has always taxed income, not retail sales. One can debate the wisdom of that from now until the end of time. Point is, other than the few times Congress sought to punish the successful by imposing a “luxury tax” on high end items, [which always hurt the makers of said items] the income tax has been the main way of funding government.

The income tax, when originally implemented, was supposed to be temporary, and only a few percentage points. Well, as Ronald Reagan was fond of saying, there is nothing more permanent than a temporary government program. It wasn’t long before the top tax rate was a staggering 90%!

Cain’s plan calls for a 9% sales tax, a 9% personal income tax, and a 9% corporate tax.

Now Cain isn’t suggesting a constitutional amendment here, so what he is really doing is simply adding a sales tax to go along side something we already have, an income tax. This isn’t a whole lot different than the United Kingdom’s value added tax. [VAT] Oh and rather than having the rates set in stone, Cain would only “suggest” a two-thirds majority to raise the rates. We already know that among the permanent political class raising taxes is no big deal. There would be nothing to stop future congresses and presidents from raising the rates at will.

This isn’t even the worst part.

Last week Tammy Bruce posted a video of Cain and some must read commentary about his remarks here.

In the video Cain is asked how his plan would effect the poorest among us, and whether there would be tax exemptions for life’s most basic needs, like food. Without batting an eye, Cain said there would be no exemptions, and then went off on a tangent about buying used clothes and used cars.

Cain also goes on to explain how his tax would actually be better, because of the elimination of payroll taxes and withholding. Now it sounds good when said by a slick salesman, but there is little reality here.

Texas, for example has a state sales tax. [we have no income tax] Cities and counties also have a sales tax that is collected at the same time. The current state tax rate is 6.25%, where I live, the city and county add another 2%. In Texas goods and some services, like auto repair, are taxed. Food, medicine, and medical services are among the things that are tax exempt. Though there are some, in their lust to further the growth of government, who would love to end those exemptions, Texans wouldn’t stand for it.

The problem with Herman Cain is he can talk the talk, but has forgotten what it’s like to walk the walk.

You see, the poorest among us, many who are living on Social Security and disability checks [fixed incomes] don’t pay payroll taxes and won’t see the alleged benefits Cain cites. They will only see the cost of everything they buy go up by 9% at the check-out counter. This will only limit their buying power further.

Cain’s answer seems to say the poor don’t deserve new stuff and should be happy to wear other people’s discarded clothes. I’ve worn hand-me-downs before myself, but I’ll be damned if I buy used underwear! Also, if you’ve ever shopped at Wal-Mart, you’ll know you can often buy new clothes for the same price [or less] than at the thrift store. Of course, if someone is buying from a thrift store, one would think they’d be subject to Cain’s 9%. So now what, you got the poor chasing all over town looking at garage sales for clothes? That’s all I can figure.

I wonder if there is such a thing as “used food” the poor can buy?

What gets me is how cavalier Herman Cain is about all of it. How matter-of-factly he says no to exempting basic items like food. No thought to how this will effect those who can least stand to have another expense.

Cain’s 9-9-9 plan sounds more like a good offer on a pizza than a coherent tax plan. In fact, if you live near a CiCi’s Pizza restaurant, you can go pick up three loaded medium pizzas for, you guessed it, $9.99!

The idea of adding a sales tax at all, while still having an income tax, is insane. We’ve seen this movie before, and that 9% will turn to 19% sooner rather than later.

The only way to reform the tax code is by constitutional amendment. Something that sets rates in stone. Then it would take another amendment to change the rates. Anything less is unacceptable.

I’m sure Cain means well, but under his plan there is nothing to stop future presidents and future congresses from raising rates, and harming those who can least afford it, even more.

I’m not totally opposed to a national sales tax, as long as it replaces the current system of taxing income completely, and as long as basic items like food, medicine, and medical services are not taxed.

This is the problem with the equally silly “Fair Tax.” It taxes everything as well, and at a much higher rate, though it does replace the income tax in it’s entirety. Now proponents of this Rube Goldberg device proclaim that taxpayers would get a “pre-bate” check to cover the taxes paid of food and the like.

Huh?

Under the “ Fair Tax” government would control the amount of the “pre-bate” one would receive monthly. Past experience tells me that check would never be enough to cover the actual taxes paid in. Why the authors of this fiasco waiting to happen didn’t just think to exempt some things, like food, and eliminating the need for government controlled “pre-bate” checks, is beyond me. The cost to process these “pre-bates” alone would be staggering.

Back to Herman Cain, just today economist Steve Moore, one of the architects of the 9-9-9 plan, says he would drop the sales tax portion of the plan. Of course I’m not so sure his newest idea is any better, which is to replace the sales tax with a 9% payroll tax. [in addition to the 9% income tax]

Oddly enough, just today, well respected economist Peter Schiff says there is already a hidden 9% payroll tax built into Cain’s 9-9-9 plan!

I like simple. Rather than all of these “plans” that are as just so much smoke and mirrors, how about a reformed income tax code instead?

My plan would be simple. Tax personal income only. No deductions, except for the first, say $20,000 in income. [adjusted for inflation] This would allow the truly poor some breathing room. You would tax every individual earning a paycheck. There would be no more distinctions between single and married. The tax form would be simple: “How much did you earn? [minus the first $20,000] Send in X percent of that. No hassle, no social engineering, nothing. The economy would explode. [in a good way]

Herman Cain is someone to admire and respect, but having watched him as a candidate I am convinced that he’s not ready, or even remotely qualified, to be president. We already have an on-the-job trainee as president. Don’t need another one.

Our options for 2012 are very poor, to say the least. We must continue to vet all of the candidates and their ideas. We can’t afford to go easy on any of them. This election is just too important to screw up.

Unless Herman Cain starts to show me more than he has, I simply cannot get behind him.