Thank You Herman

Herman Cain has found his way to the bright light of contender status. His appeal as a ‘non politician’ is being weighted against his inexperience as a politician. Do not those two things, by definition, go together? Mr. Cain has clearly rattled both the left and right; the left going as far as labeling him a racist. Of course, anyone not fitting the left’s version of acceptability is a racist; eventually. Heck, they even played the race card on Bill Clinton. The right is no better attempting to turn 999 into the devilish 666. You can nearly smell the fear.

The 999 plan has holes in it. Every tax plan on the planet has holes in it. However many holes 999 may have its not even close to the tax system we suffer under now. Commentators, however, fail to make that small bit of comparison; the point should be, would 999 or 909 be better; holes and all?

Commentators have also missed or slid by fundamental points of analysis. In the first case the appeal of 999 is its simplicity as an idea. People did not rally to plan details, they rallied to the idea that tax simplification was, finally, present in the public debate. The idea that 999 throws out the burdensome morass of special interest considerations is intoxicating to average tax payers. Herman may be the messenger, he may be flawed but there is no denying the attraction of the message. The second point of context missing in our ‘expert’ commentary is how we, collectively, feel about government effectiveness. 85% of those polled say the government is not going to “do the right thing most of the time!” 85% cuts across all ideological points of view and all income levels. It helps explain the rise of Mr. Cain and his ideas.

999 or some evolution of 999 limits the influence of money in the political system aimed at impacting tax policy. The liberal left, consumed with ‘fairness’ has had little to say about tax policy apparently content with current complications. The political establishment can and will continue to design criticisms of 999 mirroring the sound of a hammer on an empty drum. To the establishment, the loss of power that the plan would generate is as frightening as the idea they might lose the next election. Where is that power redistributed to? To you! It’s the zero sum game we need.

999 and Herman Cain represent a unique manner of optimism; optimism is based on the fact that new ideas can still be powerful; that simple can be better. It represents optimism that there is a way to eliminate the rampant corruption in the current tax system.

Thank you Herman! No matter what happens from here.

  • I don’t like 9-0-9. It should still be 9-9-9. Why? Because with 9-0-9 we have begun to let politicians pick areas for winners and losers. I understand why Herman did this… there has been tremendous pressure from the MSM and even other GOP rivals regarding 9-9-9 and its impact on the poor. But, he should stick to his guns. He needs to emphasize that 9-9-9 gets rid of all the special interest groups and puts the power back with the people, not with big business/Wall st. If he pushed this idea of getting the corporate world out of government he could even pick up on some of the stupid “Occupy” crowd.

    I find these 9 rebuttals to false attacks on 9-9-9 interesting: http://caindelivers.blogspot.com/2011/10/9-responses-to-9-false-attacks-on-9-9-9.html

    Furthermore, 9-9-9 lowers taxes on all income brackets (excluding current deductions). http://caindelivers.blogspot.com/2011/10/will-my-taxes-go-up-under-herman-cains.html

    The table at the above link shows that each income bracket would have to spend well out of their means for the 9-9-9 tax plan to equal the current tax plan (excluding deductions/credits.) 9-9-9 does hurt the lower income range more because they currently do not pay any income tax. This shouldn’t be the case for a country $14 trillion in debt. TINSTAAFL (There’s No Such Thing As A Free Lunch). If we take the two tax plans (current and 9-9-9) at face value we see that 9-9-9 gives Americans more of their own money at each tax bracket.

    Yearly Salary
    $100,000 $70,000 $60,000 $40,000 $20,000 $10,000

    Tax Bracket (married filing jointly)
    25% 25% 15% 15% 15% 10%

    Yearly Fed Income Tax withheld
    $25,000 $17,500 $9,000 $6,000 $3,000 $1,000

    Yearly Payroll Tax withheld at 7.65%
    $7,650 $5,355 $4,590 $3,060 $1,530 $765

    Yearly Take home pay under current tax plan
    $67,350 $47,145 $46,410 $30,940 $15,470 $8,235

    Yearly income tax withheld under the 9-9-9 Plan at 9% $9,000 $6,300 $5,400 $3,600 $1,800 $900

    Yearly Take home pay under 9-9-9
    $91,000 $63,700 $54,600 $36,400 $18,200 $9,100

  • Nathan

    I like the idea of a flat tax and aggree that we need a new tax code but what I think is a BIG hole in the 9-9-9 plan is the addition of a consumption tax. Why in our wildest dreams would we want to give Washington another source of revenue that they could spend on pork!? Once Washington is given a new source of revenue it is basically impossible to get rid of it and you know they will raise it from 9 percent later. Look at history! A national sales tax is a bad idea!

  • Bill Hedges

    Brian

    What do you think of Governor of Texas tax plan ???

  • Landreaux

    Bill,

    I’ve not looked into Mr. Perry’s plan in detail but the idea of keeping the old tax ‘system’ with an option to adopt the flat tax plan seems like obvious politics to avoid criticism. ‘Hey I’ve got this flat tax plan, but………..I’m not confident enough in it to eliminate the old plan which I don’t agree with but am willing to keep’; seems to defy logic. Are we left with the option to maintain the old plan that we think sucks and the entire universe of corruption inherent in that plan. Will the GE’s of the world opt for the new plan? I think not, so what have we accomplished?

  • Bill Hedges

    Thanks…

  • Bill…

    I agree with Landreaux, why keep the old plan?

    It will reduce criticism from those who like the current progressive tax code because they can keep their taxes the same. But, I thought the reason we need tax reform is because our current system is ridiculous. Furthermore, by having two different tax plans Perry will further complicate the tax system. There will likely need to be more irs employees to figure out the mechanics of both systems. Also, once you opt-in/out can you change your mind? Or are you stuck forever?

    I think Perry’s plan might garner more support from congress. Congressman Tom Cole sent me a letter as a response to my support of the fair tax. In his letter he, like so many others, welcomed the idea of tax reform and is more supportive of a flat tax than the fair tax.

    I do not know how he stand regarding 9-9-9, but one would think there are at least some elements for congress to like.

    Speaking of 9-9-9, I don’t necessarily like the new 9-0-9, but I understand why Cain changed it. He, like Perry, had to do something to prevent his plan from criticism from those who will not benefit from it. 9-0-9 will reduce the criticism about raising taxes on the poor, but Herman’s plan will still receive criticism because of what it will do to the special interest groups in Washington.

    I don’t mind 9-0-9 too much. The poor will likely not contribute a significant portion to the 9% income tax anyway. Furthermore, if 9-9-9 creates such a robust economy that jobs are plentiful, there will be less people below the poverty line because more people will be working. I am more concerned about his empowerment zones. This is the type of thing that allows special interest back into the tax equation. Who gets to be an empowerment zone? Is it permanent? Can companies relocate their HQ there to benefit from taxes?

    You can see the problems with this already. My guess is that as the tax reform discussion continues we will end up with a complicated system that may not be too much better than what we have now. That is simply how politics works.

  • Bill Hedges

    There are advantages to the old tax code. Tax deductions for wanted results. For example home ownership. Another Bill Clinton gave tax breaks for the very expensive deep water oil drilling. Both deductions was good for America and paid for themselves one way or another.

  • landreaux

    Bill,

    We’re we to scrap the old tax code completely we could still find ways to motivate desired results but, it’s a bad idea to do so through the tax code. Direct subsidies have their place and their place should be in direct sunlight with congressional votes, one by one.