999 = 666?

Like a stopped clock, it turns out that Michele Bachmann may well have been correct when she awkwardly quipped in the most recent Republican debate that “the devil is in the details” regarding Herman Cain’s ludicrous “9-9-9” plan for overhauling America’s tax system.

Hilarious details are now coming to light about the origins of Cain’s brutally regressive plan, such as it being authored by an “economist” but who is, in fact, an investment advisor at a branch of the Wells Fargo bank in a Cleveland suburb and may have drawn his inspiration for the crackpot scheme from the default settings of the computer game SimCity4.

Watching the absurd debate over the American tax system brings a new appreciation for the eminent sensibility of the hybrid system employed in Canada of progressive income taxes and a flow- through value-added consumption tax incorporating reasonable exemptions to curb its most egregiously regressive impacts (e.g., rebates for low income plus zero-rating for basic groceries, rent, etc.)

13 Comments

Filed under 2012 U.S. Election, Taxation

13 responses to “999 = 666?

  1. Brad Dillman (TRN)

    I’ve been playing with some spreadsheets and the 9-9-9 just for fun (yeah, what does that say about me? LOL). There’s just no good in it anywhere I can find.

    But people are eating it up because it’s a simple message that says their taxes will go down. They won’t, but people don’t hear that. Also, people are more concerned with their own taxes than those of the very rich, so they aren’t worried if the very rich are getting a bigger tax break – forgetting that money has to come from somewhere, either their own taxes or from the deficit.

    If you believe reducing taxes on the very rich stimulates job creation, then this is the plan for you.

    I believe demand drives expansion and job creation, so that 9% sales taxes looks like a kick in the job creators’ nuts to me.

    And no taxes on foreign earnings might drive some business out of the country, but I’m not sure that’s not already happening anyway. Hard to predict that effect, I’ll leave those predictions to professionals.

    But Herman Cain seems to get his message out better than the others in the GOP race.

  2. I’ll certainly give the guy a lot of credit for the apparent effectiveness of his pitch but I think that speaks more to the ignorance of the Republican base than the legitimacy of his so-called plan.

    I didn’t have to run spreadsheets (really, you did that?) to know that it would result in a massive windfall for wealthy earners while negatively impacting those who can least afford to pay more taxes. Moreover, the plan is predicated on the elimination of programs such as medicare and social security… once people realize that, Cain is going to be sunk as a viable candidate.

  3. Brad Dillman (TRN)

    I often wonder to what degree is anyone running for the GOP nod… or rather running for the VP-side of the ticket. My thinking is that most of them are worried they can’t beat Obama (though they’d say different in public), and really they’re building recognition for 2016. Chris Christie and Sarah Palin don’t have to worry much about recognition, and are probably try to keep a safe distance from a possible (likely?) loss. In fact, why not tear down Romney so he won’t likely win, if it sets you up in 2016? Running as VP and losing worked out pretty well for Sarah.

    But I’m likely ahead of myself. I’m just speculating here, and I’m not going to defend my speculation at all. I’m just hangin’ out here at RT3.0.03, having fun.

  4. It’s hard to know how “serious” some of the people running for president really are, but I don’t think any of the current GOP field are positioning themselves for 2016 as they barely seem credible in this race. For example, should Perry flame out (as he seems to be doing at the moment), it’s hard to imagine that he would be any more appealing in another 4 years. Cain, on the other hand, could be a strategic asset for Romney in the role of veep. As for the cadre of no-hopers, some are running to advance very legitimate grievances (e.g., Ron Paul, Buddy Roemer) and some for their own egotistical vanity (e.g., Bachmann, Santorum, Gingrich).

  5. Dan Pangburn

    By reducing the cost of U.S. manufacturing labor by 15.3% and increasing the price of goods manufactured outside the U.S. by 9%, 999 is a jobs plan.

  6. By not allowing for most normal business expenses to be deducted the “999” would kill off a good percentage of manufacturers, and in fact, businesses in general. Not to mention that the “999” would be in complete contravention of U.S. commitments under the WTO and all existing trade deals. It’s not a “jobs plan” it’s a joke plan.

  7. Craig Chamberlain

    (The scary part of it all is it will be rejected — but not without somehow influencing future direction.)

  8. You may well be right there. Already some “conservatives” are suggesting they’d like to take the first two 9s of Cain’s “plan” — i.e., reduce the corporate tax by 24% and ensure the working poor and lower middle class not currently paying federal income tax pay 9%. They’re not quite clear on the details of how it all works, but the gist is clear…

  9. Craig Chamberlain

    Immoderate times, for sure.

  10. Not only immoderate, but strangely unserious, at least when it comes to discussing sensible proposals for tax reform that could actually help to address many of the systemic problems with the American economy at the moment. Apparently, when push comes to shove, they are more swayed by ideological fantasy than economic reality.

  11. Craig Chamberlain

    (And yet they propose the fantastic as a means to regain their credit rating!)

    On the subject of fantancies, what a hoot it would be for some credit rating outfit to come out and say, given what we are seeing coming out of the US, we are looking at down-grading that country’s rating. Oh wait, that already happened. Perhaps in light of what we are seeing with the 9-9-9, another downgrade is in order.

    But really, Americans have their serious edge — but where is it? It would seem they are just standing by and watching this in a manner not unlike trainwreck trauma victims.

  12. Gawping trauma victims in the wake of a train wreck is actually a pretty good description of the situation currently taking place in America. Unfortunately, when they need the government to intervene in a commandingly decisive manner, they’re paralyzed by a “free market” ideology that demands the exact opposite.

  13. “I believe demand drives expansion and job creation, so that 9% sales taxes looks like a kick in the job creators’ nuts to me.”

    The problem is that it isn’t a 9% sales tax. 9% would only be a federal sales tax alone. State sales taxes tend to be 5-8%, and local (city, county or township) sales tax may be another 1-3%. 45 state collect sales taxes; those that don’t tend to be excessively reliant on Federal money to make up the difference (like Alaska.)

    I suppose he could advocate getting rid of state and local taxes, but those are the principal taxes that drive state and local services (which aren’t those nasty evil Medicare or Social Security entitlements that conservatives hate.) State and local sales taxes drive necessities like state and country police, and highway patrols, prisons, jails, fire, state colleges and universities, city and county roads and state highways.

    So either sales taxes would go up (to over 20% here in New York City) on everything, including food and clothing, or Cain could eliminate these taxes yet preserve these services is by federalizing them, which is anathema to conservatives.

    Yet people don’t read the fine print. It’s just bizarre.

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