Why 9-9-9 Is Even Worse Than Herman Cain's "Fair Tax"
If you gave ear to last night's Republican debate and are not sure what all the "nein-nein-nein" business was about, former Godfather's Pizza executive Herman Cain explains it all in the text of a campaign video:
Our tax code is the 21st century version of slavery
The I.R.S. has become the overseer of the American people.
In a Herman Cain Administration, April 15th would no longer be a day to be dreaded.
My 9-9-9 economic growth and jobs plan is a major step towards tearing the chains off the backs of the American people.
Graphic:
9%—Corporate Flat Tax
9%—Personal Flat Tax
9%—National Sales TaxWe have got to supercharge the growth of this economy.
Take the current tax code and replace it with a nine-percent tax on corporate profits, a personal flat tax of nine-percent – the tax code goes away; you don't have to fill out all those crazy forms – and a nine-percent national sales tax.
We will all be able to say, "Free at last! Free at last!"
We will replace oppression with prosperity.
Card:
If 10% is good enough for God,
then 9% should be just fine for the
Federal Government.
-Herman Cain-
08/18/2011
Earlier this year, Cain was still describing his plan for a national sales tax as the "Fair Tax." At that time he made no mention of supplementing the Fair Tax (which he then calibrated at 23 percent) with corporate and personal income taxes.
Earlier this year I gave unenthusiastic assessments of the Fair Tax. I received about 30 emails in addition to hundreds of comments about my assessments of the Fair Tax. The most frequent objections to my view seemed to be:
1) My complaint that the Fair Tax bill H.R. 25 is more than 100 pages long was superfluous because the 30-word Sixteenth Amendment went on to generate hundreds of thousands of pages of tax code.
2) I am letting the perfect be the enemy of the good by objecting that neither H.R. 25 nor any other versions of the "Fair Tax" in public actually repeals the Sixteenth Amendment.
3) Who cares if "prebate" isn't really a word, Prof. Smartyboots?
Cain mercifully eschews talking about the prebate these days, but if 9-9-9 is the current iteration of the Fair Tax, I was too kind in my earlier assessments. Not only has Cain avoided tying his national sales tax to even a vague promise of future repeal of the 16th Amendment (as H.R. 25 does); he doesn't even want to suspend, let alone repeal, the income tax.
In fact, 9-9-9 is a significant step back from the Flat Tax proposals Republican business candidates used to offer in the Clinton era. In 1996 Steve Forbes got attention for supporting a no-exemptions income tax pegged at 17 percent. That wasn't perfect, but at least it would have reduced the number of distortions the IRS causes in the private economy.
Now Cain would have you believe that in exchange for a near-halving of a flat tax target that was vaporware when Steve Forbes proposed it, we should agree to give Congress the same power of taxing all business transacted in its jurisdiction that now belongs to your local city hall or governor's mansion? (And yes, Fair Taxers, I know that the Fair Tax proposal is to give the states the taxing authority and make them responsible for kicking up national sales tax revenues to D.C. I say D.C. has the power and I say the hell with it.)
I know our commenters often feel unappreciated, but I think we have a pretty intelligent group. Please tell me I'm not the only one who sees what can possibly go wrong with this plan. I've tasted Godfather's pies and I already know I wouldn't buy a pizza from Herman Cain. I sure as hell wouldn't buy a national sales tax from him.