Cain’s “9-9-9 Plan” – about three 9’s too many

GOP Presidential candidate Herman Cain has become quite the center of attention lately, winning some straw polls and earning several recent appearances on Fox News.

His swift upturn began with winning the Florida straw poll and continued with the Republican Women’s straw poll and Chicago’s TeaCon straw poll (where President Obama got more votes than John Huntsman and Gary Johnson…ouch).

Cain is certainly a likable personality and his statement that he would take a sense of humor to the White House because “America is just too uptight” was quite the crowd-pleaser.

And, if you have listened to him for any amount of time, you have repeatedly heard “9-9-9” and “Chilean model.”  The Chilean model that Cain speaks of is in reference to how Chile corrected their equivalent of a Social Security collapse by removing government from the pension/retirement business and allowing individuals to simply have individual retirement accounts that yielded higher interest.

The “9-9-9” plan, however, seems to be his real baby.  The plan, Cain says, would begin with throwing out the existing tax code and, in its place, instituting a 9% corporate income tax, 9% national sales tax, and 9% personal income tax.

For many Americans, the response is: “You had me at throw out the existing tax code!”

Is Cain’s plan a possibility?  If so, would it actually lead to less taxes?  Would it fix the problem of government overspending?  Sure, it sounds better, but what would the real impact be?

1. It would not lower government revenues.

As David Hanson of World Net Daily indicates, Cain’s plan does nothing to address the federal government’s real problem of overspending.  Without addressing that issue, the national debt and inflation would not improve.

In fact, it would keep federal revenues at roughly the same amount and even give them leeway to raise any of the three 9’s because they seem so low when compared to current levels.

2. The federal government lies about tax rates.

Any tax imposed by the federal government goes up.  The American people were once promised that income tax would only affect the wealthiest citizens.  Then they were promised that it would never go above 7%.

If Cain were to impose a 9% personal income tax, that only backs up the problem, but it does not fix it.  It wouldn’t be long before they decide it’s not enough.

If Cain imposes a 9% national sales tax, how long before that increases?  As Hanson points out, “Expecting Congress to jealously guard any hike in sales or income taxes is just naïve.”

3. Does Cain have more than two ideas?

Even if one granted that Cain’s ideas would work and would be a great improvement (easier with the Chilean model than “9-9-9” as pointed out), could he really pull it off?  How easy would it be to throw out the entire tax code?  As glorious as that sounds, many campaign promises have fallen flat when they are thrown into the legislative process – given to the House and Senate.

What if the Social Security fear-mongers don’t love the Chilean model and simply claim (and they will) that he wants to take everyone’s retirement, make grandpa homeless, and leave grandma with no food or medicine?  People have believed such tactics for years.

In other words, while Cain’s persistence with these two ideas is admirable, what if they don’t work?  Would America be stuck with a man that has nothing else?

On top of that, Cain seems quite ignorant of foreign policy and has already flip-flopped on the assassinations of Anwar al-Awlaki and Samir Khan.

Far too many questions remain with Cain and what we do know is far from perfect, the “9-9-9” plan threatens more of the same financial irresponsibility and plundering of American taxpayers.

For more, see David Hanson’s full article here.

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2 thoughts on “Cain’s “9-9-9 Plan” – about three 9’s too many

  1. Business Flat Tax – 9%
    Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.

    not sure why businesses have not spoken out yet…

    but if 100k net sales and 0 cost of goods has 40k in wages and 40k in expenses, taxes are paid at 7.5% in payroll taxes to wages and the profit/dividend of 20k is paid somewhere as income tax and likely at 15-25%… this same business i guess now would pay 9% on 80k (less any B2B purchases to deduct)

  2. Strange how he wasn’t even in the picture until Florida. It brings to mind how the media and possibly electronic voting machines produced the instant front runner candidacy of John McCann in 2008 after the New Hampshire Primary.
    Anyway, having served on the Federal Reserve in his past makes anything he says suspect. At any rate, his ideas are untenable, as you’ve aptly explained.

    Mcj

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