Herman Cain Dial 9-9-9 for nonsense

Herman Cain Dial 9-9-9 for nonsense
Oct 17th 2011, 20:52 by W.W. | IOWA CITY
Economist

HERMAN CAIN is riding high in the polls. Among other things, his ascent is based upon a charming sense of humour, rousing oratorical skills, a story of moderate achievement in business, zero experience in elected office, which has allowed him to mould a perfectly zeitgest-matching conservative platform untainted by a record of no-longer zeitgest-matching political decisions, and, finally, the bold, clear proposition of the 9-9-9 tax plan. Now that Mr Cain is having a moment in the sun, what had seemed a gimmicky ploy is undergoing serious scrutiny, and we can expect Mr Cain to get hammered on the details of the 9-9-9 plan in tomorrow night's Republican debate.

Mr Cain touts the simplicity of the 9-9-9 plan, but it is anything but simple. Even after reading about it on Mr Cain's campaign site, I'm still not sure I understand it. I thought I knew that the plan proposed 9% income, sales, and corporate tax rates. But the corporate tax is not a simple reduction in the corporate tax rate, as I had thought, but a value-added-tax on "Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports." Anyway, the 9-9-9 plan is not what Mr Cain ultimately has in mind for American tax policy. It is but the first step of a two-step process to replace most federal taxes with a 30% national sales tax, a version of the so-called "Fair Tax". Why not go directly to the Fair Tax, then? Why the transitional step? Mr Cain's statement doesn't really say, though it does seem to imply that the Fair Tax is at present too unpopular to implement. "Amidst a backdrop of the economic renewal created by the 9-9-9 Plan," Mr Cain says "I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax."

Mike Huckabee, a Fox News presenter and former governor of Arkansas, plumped for the Fair Tax during the 2008 race for the Republican nomination and the plan came in for a lot of abuse by economists and commentators across the ideological continuum. Perhaps Mr Huckabee's failure to get far with the Fair Tax explains Mr Cain's choice to campaign on an altogether different tax plan. Perhaps the idea is that he can capture the allegiance of the Fair Tax's many conservative fans while ducking the criticisms of the Fair Tax by pushing a fresh plan with a catchy name implying super-low rates. But this can only work if (a) the media and Mr Cain's competition let him get away with advocating the Fair Tax while running on his transitional plan, and (b) the transitional plan stands up to scrutiny better than the Fair Tax has. And this seems unlikely.

The National Review today ran a blistering critique of Mr Cain's 9-9-9 plan. A selection:

This tripartite scheme makes for a succinct slogan but has little else to recommend it. In particular Cain’s inability to choose between a sales tax and a VAT is puzzling. The two are very similar in their economic effects. The chief advantage of the sales tax over a VAT is that the latter is considered easier for governments to raise, because it is hidden. The chief advantage of the VAT over the sales tax is that it is easier to enforce without stimulating black markets. (Another is that it reduces the risk of taxing business-to-business purchases.) Opting for both as a transitional step means courting the danger of a VAT with none of its rewards: In the first stage, the government would get a new money machine, and in the second it would supposedly destroy that machine and opt for something hard to enforce.The two-stage scheme is self-defeating in another respect as well. The 30 percent national sales tax, whatever its other merits, would be significantly softer on the poor than the 9-9-9 transitional step, since the larger sales tax includes a “prebate” check to all Americans to exempt the basic necessities of life from being taxed, while 9-9-9 includes no similar provision. Leaving aside whether a major tax increase on people at the bottom of the income scale is a good idea, what is the point of first raising their taxes and then cutting them?
In the last debate, only Rick Santorum noted that Mr Cain's plan involves the danger of even temporarily handing the government "a new money machine", a point one would expect to resonate with conservative voters. I expect we'll hear a lot more of this line of argument in upcoming debates. More generally, the fact that Mr Cain apparently believes it is politically feasible to wipe out the entire status-quo federal tax system in order to move to the 9-9-9 scheme, and then wipe out the entire 9-9-9 scheme in order move to a 30% national sales tax seems to me to draw attention to Mr Cain's policy inexperience and dazzling political naivete.

That the 9-9-9 plan would cut taxes on the rich while raising them on the poor led Bruce Bartlett to call the proposal "a distributional monstrosity", a phrase you could imagine Barack Obama using to good effect in a general election. Why would you propose to raise taxes on the poor, making yourself vulnerable to charges of monstrous callousness, when, as the NR editors note, your ultimate plan would only cut them later? Well, you wouldn't, if you knew what you were doing. It requires only superficial examination to see that Mr Cain's 9-9-9/Fair Tax scheme is more an ill-considered, hand-waving improvisation than a serious plan from a serious policymaker. He's winging it, which I supposed makes it all the more impressive that he's been able to wing it all the way to preeminence in a few polls. But now he's made himself a target, and an easy one at that, so I doubt Mr Cain will wing it all the way to the nomination.

(Photo credit: AFP)

Rising Cain
Herman Cain is the latest challenger to Mitt Romney’s position as front-runner
Oct 15th 2011 | from the Economist print edition

EVERY few weeks, the race for the Republican presidential nomination acquires a new leader, or at least a new challenger to Mitt Romney, the steadiest force in the field. First there was Donald Trump, a businessman-cum-impresario with a fascinating hairdo. In July Michele Bachmann, a shrill congresswoman, had a moment of ascendancy. August and September saw the rocket-like rise and fall of Rick Perry, the governor of Texas. At the beginning of this month all eyes were on Chris Christie, the wavering governor of New Jersey, who ultimately declined to run. The latest excitement, however, is perhaps the most unexpected of all: Herman Cain, a former pizza mogul and talk-show host.


A few polls, including our own Economist/YouGov one, show Mr Cain leading Mr Romney, with roughly 30% support. In most, though, he is nipping at Mr Romney’s heels. All this is a startling change from a month ago, when he rarely made it into double digits (see chart).

Mr Cain has an impressive and uplifting resume. Despite coming from a poor black family, he earned degrees in mathematics and computing, and worked briefly for the navy as a rocket scientist. He had successful stints as a manager at Coca-Cola and Pillsbury, a food group, before leading a buy-out of one of its subsidiaries, Godfather’s Pizza. He served on, and ultimately chaired, the board of the Federal Reserve Bank of Kansas City. More recently, he survived a severe case of colon cancer.

Until recently Mr Cain’s political career had been less triumphant. He first got involved in politics in opposition to Bill Clinton’s proposed health-care reforms in the 1990s. He has never held elective office, although he ran for president in 2000 and for the Senate, from Georgia, in 2004. A conservative pressure group he started, the Hermanator’s Intelligent Thinkers Movement (HITM—get it?), has not had much of an impact.

Nonetheless, Mr Cain is a stirring speaker. He got the conservative faithful much more fired up at a recent conference in Washington than Mr Romney, or indeed any of the other candidates. He has an appealingly simple economic platform, of massive tax cuts, complete with a catchy slogan: 9-9-9 (the tax rates he would like to introduce on personal and corporate income and sales). In the latest debate among the candidates, admittedly on economic issues, he managed to advertise this scheme in almost every answer.

The 9-9-9 plan has won Mr Cain lots of attention, but also presents his rivals with their most obvious line of attack. One of them, Jon Huntsman, quipped that he mistook it for the price of a pizza. Mrs Bachmann points out that it would institute a national sales tax, which would come on top of state sales taxes, giving the federal government a whole new revenue stream that would inevitably be increased. Other critics dismiss as far-fetched Mr Cain’s claim that his dramatically lower rates would unleash such rapid growth that they would bring in as much revenue as the current tax code. Another common complaint is that Mr Cain’s plan would be hugely regressive, slashing effective tax rates for the richest while actually raising them for the poor, who would pay 9% on their food bills.

Mr Cain shrugs off all these criticisms as misguided, with little explanation. It does not help that the only economic adviser he has named so far is a certain Rich Lowrie, a lowly Ohio banker without a degree in economics. The voters, Mr Cain insists, like his plan—although they may get misgivings the more they hear about it.

Moreover, there is not much more to Mr Cain’s campaign beyond the 9-9-9 plan. He admits to being a neophyte on foreign policy, and joked with an interviewer about all the reporters who will try to catch him out by asking him to name the president of “Ubeki-beki-beki-beki-stan-stan” and other “small insignificant states”. He often gives the impression of being out of his depth, and admits, quite winningly, that he has a lot to learn. He has only a small staff, and interrupted his campaign for a book tour, which took him away from the early-primary states less than three months before voting begins.

It is perhaps telling that Mr Romney did not attack Mr Cain in the most recent debate when offered the opportunity to question another candidate. As the fortunes of his various potential challengers have waxed and waned, Mr Romney has maintained a statesmanlike indifference. He has released a 59-point economic plan, named dozens of prominent advisers on economics and foreign policy, and attracted endless endorsements from party grandees—most recently Mr Christie.

Mr Romney’s support, at just over 20% in most polls, remains quite feeble. By this stage in most Republican campaigns, a clear front-runner has normally established himself (Democrats are more fickle). Many Republicans appear to mistrust Mr Romney’s conservative bona fides, thanks to the relatively liberal policies he pursued as governor of Massachusetts—chief among them a health-care scheme that bears a strong resemblance to Barack Obama’s despised reforms. Some voters are put off by Mr Romney’s Mormonism. A pastor with close ties to Mr Perry denounced the religion as a cult recently, to only half-hearted criticism from the other candidates.

If conservatives were to rally around a single alternative candidate, they could quite probably supplant Mr Romney with one of their own. But Mr Perry, who has lots of money and a robust campaign machine, will not surrender that niche willingly to Mr Cain. Even in a state like Iowa, where roughly half of Republican caucus-goers identify themselves as born-again Christians, Mr Romney is leading in some polls because the right-wing vote is so fractured.

The more challengers who threaten Mr Romney’s lead, only to fall back again, the more inevitable his ultimate victory begins to appear. The most daunting potential late entrants to the race, Mr Christie and Sarah Palin, the former governor of Alaska and tea-party darling, have now officially demurred. Most importantly, Mr Romney can plausibly make the case that as a less polarising figure than most of his rivals, he is best placed to defeat Barack Obama. Even the most doctrinaire primary voters ought to be able to see the sense in that argument.

I was just 2 paragraphs in and the first lie sprang right out at me. And it was the same old tired lie that has been disproved repeatedly! The effective rate of the Fair Tax.

The author is immediately discredited.

There's two articles...

BubbleBliss wrote:
There's two articles...

And with adjectives like "impresario" "shrill" and "wavering" the author of that second article makes it quite clear that he's biased to the left.

It's a clear example of the media trying to push the least conservative candidate forward and to foist that candidate onto the people. The media love trying to select Republican's candidates, always picking the weakest ones, usually a RINO.

I'm sorry, but I didn't buy it in 08, and I'm not buying it now.

The Economist is hardly a leftist media outlet. If anything, they lean more to the right.

BubbleBliss wrote:
The Economist is hardly a leftist media outlet. If anything, they lean more to the right.

They might be considered to lean right in the UK, but what the UK calls a conservative there would be a moderate liberal here - which is what Romney is.

And I hardly think standing for the status quo with respect to our broken tax code is a "right leaning" position.

Sorry my friend, I aint buying it.

BubbleBliss wrote:
The Economist is hardly a leftist media outlet. If anything, they lean more to the right.

How can The Economist be unbiased? They endorsed Bill Clinton in '92 and '96 and John Kerry in '04. I'm not saying that they're some Marxist outfit. I'm just sayin'. In my opinion, newspapers or magazines should stay out of the business of endorsing candidates.

So, here's a couple screen shots from way back in 2008 to prove a point in a discussion exactly like this. Ready? Of course you are.

Ah yes... those right-leaning folks at the Economist. They're the kind of people I want selecting our conservative candidate.

NOT!!!

Bubbles, we're picking on you, ya know.

But seriously, the Economist is okay but not what I'd call right-of-center. The thing is that when I post something from a righty source, I expect (and encourage) someone to pick apart that persons work. Dbl did and didn't all at the same time.

Those pictures prove nothing. Those Chinese are hanging up a McCain poster and it's not about the fact that there's an obama poster but the fact that people in China are hanging up posters for the US Presidential election.
The second picture just shows a screenshot of what people voted for on the Economist website.

Also, the Economist is not a British newspaper, it's as international as it gets.
And not to mention, what the columnists write in the Economist has nothing to do with the actual articles. that's the same argument you guys always bring for FOX News... besides the fact that there are actually several pro-business columnists at the Economist.

Just because the author opposes the 9-9-9 plan doesn't mean they support the current tax code...

Don't get so butt hurt. I was razzin' ya.

BubbleBliss wrote:
Those pictures prove nothing. Those Chinese are hanging up a McCain poster and it's not about the fact that there's an obama poster but the fact that people in China are hanging up posters for the US Presidential election.
The second picture just shows a screenshot of what people voted for on the Economist website.

Also, the Economist is not a British newspaper, it's as international as it gets.
And not to mention, what the columnists write in the Economist has nothing to do with the actual articles. that's the same argument you guys always bring for FOX News... besides the fact that there are actually several pro-business columnists at the Economist.

Just because the author opposes the 9-9-9 plan doesn't mean they support the current tax code...

The fact remains, they endorsed Clinton and Kerry. Even more damning in my mind is that this was Woodrow Wilson's favorite newspaper. The same Wilson that gave us the income tax.

I'm sure the paper does a fine job on a wide variety of topics. But when I see a blatant lie on the tax rate of the Fair Tax, in that a paper that calls itself The ECONOMIST no less, then it's only fair to question their objectivity.

Oh, and by the way, The Economist is a British newspaper. Just because they cover the world and have stringers in other countries doesn't change that fact.

BubbleBliss wrote:
Mr Cain touts the simplicity of the 9-9-9 plan, but it is anything but simple.

I don't get this Cain guy.
He claims that he is not a politician yet he has political-based solutions to solve issues. If you're not a politician but use politics to solve things, doesn't that make you a politician?

TheNextPrez2012 wrote:

BubbleBliss wrote:
Mr Cain touts the simplicity of the 9-9-9 plan, but it is anything but simple.

I don't get this Cain guy.
He claims that he is not a politician yet he has political-based solutions to solve issues. If you're not a politician but use politics to solve things, doesn't that make you a politician

Cain has never held elected office - thus he is not a politician. A politician is someone elected to public office.

He is not "using" politics to solve anything because he is not yet in public office. He is telling us what solutions he would propose should he actually win public office - at which point he will be a politician.