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October 18, 2011

GOP Candidate Delivers Devastating Critique Of Herman Cain's 9-9-9 Plan

You knew it was coming. Cain was flying under the radar for a while, but now that he's moving up in the polls, the knives are coming out:

These ideas are a long way from becoming law, but they are generating, as intended, much discussion about the merits of each idea. The worst idea is a proposed national sales tax, which is a disguised VAT (value added tax) ...

... In every country that has established a VAT with the promise of reducing its national debt, the VAT has eventually gone up or expanded on top of the existing tax structure.

We caught a lot of crap around here when we pointed out the Cain's "business flat tax" was a real (if slightly modified) VAT, but this guy's going further by calling the proposed national sales tax a VAT too.

Keep reading to see which RINO in the herd made these comments.

Whoa! Bet you didn't see that one coming, did you? Turns out Cain was against it before he was for it. Kind of.

To be fair, in the linked article Cain is making an argument for the Fair Tax by pointing out how bad an idea it is to add a national sales tax/VAT on top of the existing tax code.

But 9-9-9 keeps the personal income tax, adds a business VAT and adds a national sales tax in exchange for eliminating payroll taxes, the capital gains and estate taxes and the corporate income tax. The resulting scheme is far from the Fair Tax model, which replaces everything in the federal tax code with a 23% (or 30% depending on how you calculate it) national sales tax while repealing the 16th amendment to make sure the income tax stays dead.

What happened to this Herman Cain?

Here are three of the biggest reasons the national retail sales tax is the worst idea on the table. First, we have a spending problem in Washington, D.C., not a revenue problem.

The commission claims its goal is to reduce the deficits by $4 trillion over the next decade. The task force says its plan would save $6 trillion by 2020. It's sort of like dueling promises that would never happen, because when has a proposed cut in Washington, D.C., ever produced the intended savings over 10 years? Never! (emphasis added)

That's spot on. Why the hell is he talking up this 9-9-9 tax code overhaul when he could be talking about what departments get the axe? Every time I hear him tout 9-9-9, I just can't get over the fact that a stated goal was that it remain "revenue neutral" ... meaning that it's designed to keep feeding the beast.

Old and busted: Cutting government down to size. The new hotness: Designing a better way to fund big government. If this is the real state of conservative policymaking now, we are well and truly boned.

One more point on 9-9-9, from Cain's website:

[The 9-9-9 plan] is fair, simple, transparent and efficient. It taxes everything once and nothing twice. (emphasis added)

Leaving aside the argument over whether 9-9-9 double-taxes salaries and wages (it does), those of you who've worked hard, lived below your means and saved some of the dollars the feds let you keep after taxing the hell out of them once would get rewarded by paying that 9% national sales tax when you finally spend them. Cain is selling the national retail sales tax as a pure replacement tax, but it's also a one-time tax on accumulated wealth. Pay up, suckers.

OK, one more comment on the plan (hey, it's a target-rich environment):

Phase One [- The 9-9-9 Plan]

Phase 2 – The Fair Tax: Amidst a backdrop of the economic renewal created by the 9-9-9 Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.

He presupposes that the 9-9-9 plan passes, an economic renewal results and we continue on to the promised land of the Fair Tax during his term. This is a little underpants gnomish, isn't it?

Listen to Cain closely in tonight's debate. When he's talked about 9-9-9 before, it sure has sounded to me like he was selling it as an end-state goal and not an offramp to the Fair Tax. In fact, if he says "Fair Tax" in the debate, the drinking game rule should be "shotgun a pony keg" - it's that safe a bet.

Here's Cain's conundrum: If 9-9-9 is so great and creates the economic renewal he believes it will, why should we ever go to the Fair Tax?

Because it's even better, you say? Then why spend time and political capital farting around with 9-9-9 when they could be better spent to pass the Fair Tax?

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posted by Andy at 07:57 AM

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