Herman Cain's '999 plan': long overdue tax reform or job killer?
Herman Cain's political star is lately on the rise, thanks in no small part to the persistent marketing of his '9-9-9 plan' to reform the tax code. Independent economists say the plan takes us into uncharted territory.
Herman Cain's political star is lately on the rise, thanks in no small part to the persistent marketing of his so-called 9-9-9 plan – the presidential candidate's blueprint for reforming what many see as a complex and unpopular US tax code.
But Mr. Cain, who won a Florida straw poll of the GOP faithful Saturday and who now is tied for third with Newt Gingrich among Republican presidential candidates in a recent average of three nationwide polls of Republicans, promises that 9-9-9 will do much more than simplify the tax code. Cain, the former chairman of Godfather’s Pizza says it represents "a bold solution" for reinvigorating the whole US economy.
The elements of the Cain plan are 9 percent flat tax on household income, a 9 percent corporate tax, and a 9 percent national sales tax. There are no deductions except for charity. It's a graspable concept – and one that increasingly has been getting bursts of applause during GOP presidential debates.
“This is an attempt to shift the tax burden away from production and towards consumption, to balance the load,” says Rich Lowrie, Cain’s Cleveland-based senior economic advisor. “This taxes everything once but nothing twice.”
Mr. Lowrie, who is not an economist, says by “ripping out a whole bunch of taxes” prices of goods will fall, US exports will be more competitive and business will thrive. He claims the plan will create 6 million new jobs as business becomes more competitive.
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