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The Worst Part of Herman Cain’s 9-9-9 Plan – A National Sales Tax

Former Godfather’s Pizza CEO and Kansas City Federal Reserve Bank Member Herman Cain has been rising in the polls in recent weeks, benefiting to some extent from Texas Governor Rick Perry’s poor debate performances -- but perhaps more so because Tea Partiers and grassroots conservatives like the idea of nominating someone who has never been elected to public office and who comes across as an outsider or non-politician.

Cain’s 9-9-9 economic plan is a perfect example of the danger in this thinking.

Because Cain has never served in public office, it's easy for voters to assume he shares their distrust of Washington, wanting to dismantle the establishment just as they do -- and that his 9-9-9 plan could be a step in that direction.

The problem is that the 9-9-9 plan actually gives the federal government a new revenue raising tool – a national sales tax – while ignoring the real problem, which is out-of-control federal spending.

In that regard, far from being a populist effort to lower taxes, Cain’s 9-9-9 plan is actually a classic establishment bait-and-switch plan to support continued spending by lowering rates for one set of payers in exchange for an entirely new revenue stream from a new and additional tax.

One need look no further than state government efforts to cut or freeze property taxes in exchange for sales taxes or sales tax increases to see where that eventually leads – an increase in the overall tax burden.

The cost of government is not what it taxes, it is what it spends, and Herman Cain’s 9-9-9 plan does nothing to rein-in federal spending. While Cain’s plan has the beauty of simplicity, it fails the test of conservative policy on many, many levels – not the least of which is that it gives the federal government a new and unprecedented sales taxing authority. Before conservatives jump on the Cain bandwagon, it might be a good idea to make sure that the band isn’t playing the same old Washington spending song.

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9-9-9: A Sensible Defense Of Capitalism

The fearful arguments against the 9-9-9 Plan, reminds me of some who--at a time when blacks were considered as property some southern slaveholders argued that they could do as they saw fit with their slaves; whereas the advocates of Freedom in the northern argued in favor of individual autonomy for all men.

Likewise today, we have become so unaccustomed to living and asserting our economic Freedom, and deciding as we think fit, what to do with what we've earned; because some are actually afraid of putting such a power of choice into the hands of every American citizen the way that the Founders intended. Instead, some naysayers would rather depend on Washington bureaucrats to decide for us .

In my view, the 9-9-9 Plan will deliver more economic power, into the hands of the American People, to spend, save or invest as they think fit.
And while it would still be within the power of Congress, to decide to SPEND LESS, wouldn't the President still have the power to VETO their excess?

I think that Herman Cain's 9-9-9 Plan = FREEDOM, within the tradition of exercising "the consent of the governed."

     "FairTax" is a national

     "FairTax" is a national sales tax that REPLACES almost all internal federal taxes.


  It is our best hope for "power to the people", because it puts us all in the same tax catgory, so our officials can't raise taxes on us small goroup by small group. 


  It is retail only, so no hidden tax in purchase price.


  Everyone gets a "refund" for subsistence-level spending, meaning low spenders (earners) pay no tax, net, & the really frugal may come out ahead.


  Only new items are taxed, encouraging reuse, yard sales, etc.


To learn more, visit FairTax.org

It does eliminate the payroll tax

I agree that the biggest problem in Washington is overspending and the second biggest is overregulation.

I have mixed feelings about the 9-9-9 plan because I don't want to add a new national sales tax, but it does eliminate the payroll tax, so it is eliminating a tax while adding a new one. As with other flat tax systems, it also has the advantage of getting the government out of keeping track of how we spend our money, looking only at how much we make. I'm not completely sold on the 9-9-9 plan and have doubts about how it would work in practice, but it sounds better than anything else I've been hearing from the candidates.

9-9-9 an add-on, not a replacement

The biggest problem with 9-9-9 is that it does not replace the income tax with a sales tax; it simply adds a sales tax to the current system. Cain claims he wants to eventually go to a pure Fair Tax, or sales tax, but if so why the interim step? If would be hard enough to pass 9-9-9, much less follow that up with another major reform. The progressive income tax is bad not just because it redistributes wealth and kills incentives to succeed; it is bad because it forces individuals to reveal their income and other private documents to government bureaucrats with the taxpayer required to prove his innocence if questioned by the government. In a free republic the individual is supposed to be supreme, but the very nature of the income tax makes the individual a subject of the government rather than making the government subject to the people. Cain's 9-9-9 plan does nothing to change that equation. It simply creates a third, new, massive revenue stream for the government. Anyone who believes all three rates would not eventually go up or that the income tax would not be recomplicated by future congresses is living in a dream world. Since Cain's sales tax proposal does not include exemptions for food, medicine and other basic necessities it would also represent a disproportionate cost of living increase for low to moderate income earners and would immediately be subject to leftwing attack based on its regressive effect. In addition, his plan retains the corporate tax, which should properly be reduced to zero if the U.S. wishes to compete in the world market. This is not a plan; it is a slogan, and it would be a losing slogan once people realize what it actually means.

Replacement tax

The 9-9-9 does replace the current tax code and replace it with a flat 9% income tax. In a rally here in Florida, Herman Cain spoke about his tax proposal and said it is a bridge to the FairTax. The reason for this is to make the 'pill' easier for the American public to swallow. Being a FairTax advocate for many years I know that many people do not easily accept the notion of a national sales tax. The idea behind the 9-9-9 is to get people used to the national sales tax and then start talking about the FairTax. Also, the 9-9-9 plan completely eliminates the current tax code, which by default would eliminate the need for about 60-80% of the IRS (my estimate). The reason there is no exemption for food or medicine is that, as in the FairTax, there are no exemptions, and therefore no room to meddle with the tax, which does away with the lobbyists and special interest groups. The implementation of the 9-9-9 would not cause a cost of living increase to anyone because the 9% corporate tax that would be paid by the providers is less than they are currently paying (25%+++) in corporate taxes now, so the cost of the goods sold would decrease because of the savings of the imbedded income tax currently in the cost of the goods. 

Even if you do not completely agree with the 9-9-9 plan, you must admit that it is immensely better than what we have now, and is a step in the direction we need to be heading. 

What about the additonal

What about the additonal sales tax that most states already have.  In NJ instead of 9 percent the tax would become 16 percent. 

Additional??

Don't know the tax structure in NJ, but why would a change in the national tax structure cause a 7% increase in state sales tax?

9-9-9-+ Term Limits

Cain has the basics but he does not have the "Trust but Verify" part down and that can be done with term limits of two tems at most at 4 years each, salary only, verified candidacy and a on year moritorium between times served or serving only one term in order to gain a higher office. This would give time for evaluation by the voters and make this sevice more based on merit.

If this were used in tandem with the 9-9-9 on a national ballot every ten years down the road a ways there could be a repeal of the 16th amendment, eliminate the VAT and the tax system would be more in tune with We the people and perhaps a more decent representative government would be possible. If you want decent government then you must do the required maintenance and we are behind on our duty.

Herman Cain's 9-9-9 Plan

The beauty of Herman Cain's 9-9-9 plan is its simplicity and the elimination of our overly complicated tax code with all of its loopholes.  GE employs over 600 lawyers who just do tax work and paid $0 tax yet they earned over $5 billion while our small company paid over $18,000 on earnings of $75,000.   Under Cain's plan, GE would have paid $450,000,000.  The low corporate tax rate would entice companies to bring jobs back to the US as we would now have a competitive tax structure. 

We have several problems with our economy that need fixing to resume our growth.  High government spending, over regulation, and over taxation have forced the jobs overseas.  No amount of stimulus or wishing can generate jobs when we have sent them overseas to China, Asia and everywhere else where we import low cost goods and oil from.

We can argue that 9-9-9 are the wrong numbers, that a national sales tax is unconstitutional, etc. but Cain's plan to redo our tax system is one that is sorely needed.  Our country needs to go on a fiscal diet to regain our financial shape and that includes cutting the size of the govenment, taking major steps to be energy independent and reducing our trade deficit.

Herman Cain's 9-9-9 Plan

The beauty of Herman Cain's 9-9-9 plan is its simplicity and the elimination of our overly complicated tax code with all of its loopholes.  GE employs over 600 lawyers who just do tax work and paid $0 tax yet they earned over $5 billion while our small company paid over $18,000 on earnings of $75,000.   Under Cain's plan, GE would have paid $450,000,000.  The low corporate tax rate would entice companies to bring jobs back to the US as we would now have a competitive tax structure. 

We have several problems with our economy that need fixing to resume our growth.  High government spending, over regulation, and over taxation have forced the jobs overseas.  No amount of stimulus or wishing can generate jobs when we have sent them overseas to China, Asia and everywhere else where we import low cost goods and oil from.

We can argue that 9-9-9 are the wrong numbers, that a national sales tax is unconstitutional, etc. but Cain's plan to redo our tax system is one that is sorely needed.  Our country needs to go on a fiscal diet to regain our financial shape and that includes cutting the size of the govenment, taking major steps to be energy independent and reducing our trade deficit.

Not Cain, but not for the reason you stated...

 

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I'm a fan of the FairTax, so while it's true that a national sales tax is something can get abused by congress, it's ALSO something of an equalizer, forcing the 50% of people who pay no income tax (including tourists, and people who work outside of the system like Escalade-driving drug dealers) to start paying their fair share for the infrastructure they use.  Also, a national sales tax can't "hide" - everyone knows what it is and what the rate is, so you won't get companies who can cheat by hiring the best tax lawyers.  If the rates goes up, everyone will know and vote out the people who raised it.

I do think that the 9-9-9 plan shows a bit of naivity on the part of Cain though.  When asked by the Dartmouth debate moderators how Herman Cain would make sure the rates weren't raised over 9% by Congress, Cain's third reason was that "I will be president and will veto any attempt to raise the rates".  Fortunately the mic was left on when Ron Paul sagely muttered under his breath "Yeah, but you won't be president forever...."  Only someone Cain would make a mistake like not realizing that whatever he does now is not binding on future congresses.

That's what makes Ron Paul the best candidate - he's not only the most conservative of all the candidates up there, with the voting record to back it up, but he has 30+ years of experience in government, reaching across the aisle to make alliances when necessary but NEVER going against his priciples or the constitution.  Herman Cain's experience as a CEO and director of the Fed does not directly translate into ability in government - not even close.  He would have alot to learn, and we don't have time for a student when we could have the Master!

Supporting info:

Ron Paul most conservative: third party analysis: http://voteview.com/Is_John_Kerry_A_Liberal.htm

Voting history: http://www.votesmart.org/voting_category.php?can_id=296

Not Cain, but not because of the reason you stated...

I'm a fan of the FairTax, so while it's true that a national sales tax is something can get abused by congress, it's ALSO something of an equalizer, forcing the 50% of people who pay no income tax (including tourists, and people who work outside of the system like Escalade-driving drug dealers) to start paying their fair share for the infrastructure they use.  Also, a national sales tax can't "hide" - everyone knows what it is and what the rate is, so you won't get companies who can cheat by hiring the best tax lawyers.  If the rates goes up, everyone will know and vote out the people who raised it.

I do think that the 9-9-9 plan shows a bit of naivity on the part of Cain though.  When asked by the Dartmouth debate moderators how Herman Cain would make sure the rates weren't raised over 9% by Congress, Cain's third reason was that "I will be president and will veto any attempt to raise the rates".  Fortunately the mic was left on when Ron Paul sagely muttered under his breath "Yeah, but you won't be president forever...."  Only someone Cain would make a mistake like not realizing that whatever he does now is not binding on future congresses.

That's what makes Ron Paul the best candidate - he's not only the most conservative of all the candidates up there, with the voting record to back it up, but he has 30+ years of experience in government, reaching across the aisle to make alliances when necessary but NEVER going against his priciples or the constitution.  Herman Cain's experience as a CEO and director of the Fed does not directly translate into ability in government - not even close.  He would have alot to learn, and we don't have time for a student when we could have the Master!

Supporting info:

Ron Paul most conservative: third party analysis: http://voteview.com/Is_John_Kerry_A_Liberal.htm

Voting history: http://www.votesmart.org/voting_category.php?can_id=296

8-8-8 Tax Plan.

Question... Will I pay taxes on my social security check at 9%.  Then pay another 9% when I spend the reduced check?  That sounds like a total tax of 18% since I spend all of the manthly check.  Oh, in Illinois, Cook county, we have another 10% sales tax... Something stinks here...

Worst part of Cain's 9-9-9 Plan


 



As presented, the Cain plan allows for the continuation of IRS and the adoption and subsequent ongoing collection of a minimum 9% national sales tax all to support our out-of-control federal government. Given that moderate Republicans are not unlike pervert Democrats and that the total amount of tax money expected to be collected is no less than what is now being collected, all I can see is a continuation of the status quoi, not a correction.


I would submit that an adoption of a national sales tax in exchange for the elimination of IRS, the Department of Education, the Department of Energy and Obamacare with all such employees being sent home instead of being sent to surviving branches of the federal government would be progress made. It would then set a much needed precedent for continued government revision.

National Sales Tax

I agree 100% that the problem is out of control spending.  But what I like about replacing the progressive income tax (now that's discrimination, a constitutional violation in itself) with a sales tax is that now everybody contributes.  They should exclude necessities like food and water, but tax all non-necessities with a flat tax across the board.  And I would prefer no income tax whatsoever so we can eliminate the IRS, and perhaps make that 9% sales tax a little higher, lilke 15%, to make up for it.  But why are 50% of the people not paying any taxes?  They are the problem.  They think the liberal politicians are going to take care of them and keep giving them more and more of our tax dollars.  If they have to start contributing a little to that spending maybe they will wake up and demand spending cuts just like the rest of us.  I think those that do not contribute to our tax coffers should not be able to vote.  Let them put a little skin into the game.

National Sales Taxes

to mikey,,,right now we have a tax system that is not working for everyone and if I had my way there would be no income tax or the IRS needs to be forced not to tax taxes and place penalities on top of that.  The IRS is making a killing with their tax penalities which seem to me beyond legal.  As far as the 999 plan. at least it is a start to possibly something more reasonable.  I live in a state that already has sales taxes that are very near 9% and people here pay it and say nothing.  Evidentely the taxes help with our roads and many other things.  We also have a state tax.  I don't know if you have ever researched how many different business's charge us taxes for their use, such as the phone companies, internet and T.V. etc. etc..  They are also ripping off the public and getting away with it. As for the illegal immigrants not paying taxes to the IRS and State, thats something which needs to b addressed and stopped.  Obama is such a flake with his amnesty solution and wants the wealthy to financial support the illegals, as well as the general public, and all he cares about are the votes.  The tax structure is totally upside down and robbery to say the least.  Give Cain the opportunity to change what rightfully should be and I think he may shoot for more.  He is a thinker for the rights of the people and a true Constitutional believer.  What change meant to Obama was the destruction of America, and he is certainly doing that.  Cain wants to save America and put it back on the right track.  He isn't perfect but he is the best of the best.

Without Jobs We CAN'T Pay Taxes

I was educated entirely at taxpayer expense (subsidized by financial aid and scholarships 100%) to the level of a B.A. but then the DRS which helped me to get started in that endeavor (presumably to become self-supporting) did absolutely NOTHING to supply the necessary placement assistance once I graduated magna cum laude back in 1999.  My whole point in studying to end up graduating in the top 10% of my college class was in order to be deemed prepared and wortrhy of hiring in an office position.  Sadly, that never happened.  Do not blame me, then, for being among the over forty percent who do not pay taxes.  I wanted to be in that category but, thanks to a slight mobility impairment and a government bureaucracy which pretends to help the disabled into self-sufficiency but in fact does little other than provide the avenue to education, I have not been able to secure a permanent full-time job in the twelve years since graduation.  It is a crime, but that was not of my choosing.  Maybe someday the discriminatory practices known in the disabled community as ableism will have been tackled and overcome - that day has not yet arrived.  Statistics show that only 3% of the disabled community is in fact self-supporting and only a third of us are even working on the part-time basis.  That is definitely NOT due to any lack of talents, skills or abilities.  In addition to the degree attained magna cum laude, I am fluent in Spanish as a second language.  Maybe someday that will change but right now while those without disabilities are struggling to find jobs,  this is clearly not yet the time for that.  May God save America. 

The 9-9-9 tax plan

The plan put forth has many merits. First, the national sales tax levies the same tax on all citizens, as well as taxing the folks that would not otherwise pay taxes...i.e. folks that are in illegal pursuits or foreign visitors. These people use the infrastructure and services that we are paying for. The national sales tax cannot be avoided through loopholes like the income tax can. Also, if the government wants to raise the tax rate, they would be raising the rate for all taxpayers, which would cause an outcry from everyone, not just the ones that are receiving the tax hike, therefore it would severly curtail the class warfare that is being created by using the income tax system. Yes, spending is out of control, but that is not going to be changed by the way we fund the government. At least Mr Cain has the courage to put a plan on the table that would be a huge step towards making the tax structure more simple and eliminating the onerous burden we now have for reporting and collecting the income tax.  

9-9-9 and the Fair Tax

Mr. Cain's 9--9-9 plan is the precursor to implementation of the Fair Tax, as is quite plainly set out on his website.Your commentary misses the point of the approach taken, quite intentionally, by the Fair Tax advocates.

Confronted with developing a plan to change the tax system and/or to attempt to reduce government spending, the Fair Tax advocates decided to focus on the tax system first and defer the spending issues. Why? As the Fair Tax book notes, "Tearing out the American tax code by it roots and replacing it with something simpler is a big enough challenge without reforming government spending at the same time." You have to get a foot in the door. The 9-9-9 plan is that foot.

However, implementing the 9-9-9 plan does not exclude making government spending cuts at the same time. They are not mutually exclusive.

Your final point is well taken. Regardless of the tax system, citizens need to keep on top of Washington's spending.

Mr. Viguerie, It is my

Mr. Viguerie, It is my understanding that the 9% personal sales tax will REPLACE the approx. 15.6 income tax. Did I miss something, or did you?

Without Jobs We CAN'T Pay Taxes

One last comment.  Obviously, a huge hike in sales taxes such as that is going to hurt the poor more than anyone else - it should not be done.

Lack of exemptions just one of 9-9-9's many problems

That is the other problem with Cain's plan. If you are going to replace the income tax with a national sales tax -- which I favor, both for economic and philosophical reasons -- you would need to include exemptions for food, medicine and other basic necessities. The exemptions would be available to everyone, but they would obviously mean far more to someone making $20K a year than to someone making $200K a year. That would address the objectives about the regressive nature of a sales tax without basing any determinations on income or other class considerations. Once again, though, Cain does not propose replacing the income tax with a sales tax -- at least at first. What he is proposing instead is adding a sales tax to the existing income and corporate tax. That creates an entirely new revenue stream for the federal government, while leaving in place the IRS and a corporate tax that does nothing but make the U.S. less competitive. Nor is what he is proposing a tax cut. He has made a point of saying that it would be revenue neutral. In other words, it would keep feeding the government at the same voracious rate it is currently eating private earnings and do nothing about its size, scope and reach into our personal lives. Having made a point of selling the program with the alliterative "9-9-9," it would be virtually impossible to reduce it below that level, although there would be almost immediate demands to raise it to "10-10-10" or "20-20-20" or who knows what eventual number. The top income tax rate started out at 15-percent. A year later is was 67 and a year after that it was 76. The conservative critics are right. What you need to do first is cap the government's rate of growth and its tax bite relative to the size of the economy, reduce it to fit those parameters and then come up with a tax system that does not punish success or pry unduly into our private affairs. Cain's proposal does none of those things and only takes the focus off what should be the primary objective -- reducing the size, reach and influence of the federal government.

Cain's 999 Plan

Please Group get a grip. The plan will work only if the 16th amendment is repealed. If the 16th amendent is no repealed then your argument will hold watew.

 

Rick

Cain's 9990 Plan

Rick has noted the most important issue with the 999 plan. It takes a lot more than Cain to see the 16th amendment is repealed. Cain may not have been elected to office before but he is a politician. He knows he will not be in office the 10 years it takes to complete the repeal of the amendment. The 999 plan is just another bunch of Hot air put out by a wealthy BSer.