Below is my letter that was published in Tuesday's WSJ that was written in opposition to Herman Cain's recent op-ed in which Mr. Cain presented his tax plan (9-9-9) as part of his program for reviving economic growth – a 9% corporate income tax, a 9% individual income tax, & a 9% national sales tax. It is most disheartening that one of the (former?) biggest proponents of the FairTax would not only abandon the FairTax but that he would come up with a plan that has so many flaws. I describe many of these flaws in just two sentences below.
Dear Editor,
Herman Cain's September 15, 2011 op-ed entitled My Plan To Revive Economic Growth brings about one of the scourges of any tax plan that should be feared – both an income tax & a national sales tax simultaneously in effect. Mr. Cain's plan has all the potential to make his 9-9-9 Plan a 29-29-29 Plan following the European welfare state.
How disappointing. Mr. Cain was the only candidate that was championing the Fair Tax and it looks like he has abandoned it. The idea of retaining the income tax and adding a sales tax is repugnant. Add that to the state income and sales taxes and we will be in worst shape, and we have no guarentee the rate will not go up in time or that the loopholes will be removed.
ReplyDeleteI, too, am disheartened that Cain abandoned the Fair Tax. However, the 9-9-9 plan is still a far better solution to what we currently have. I believe the anti- Fair Tax crowds, on both sides of the isle have poisoned the concept to a point where it does not stand a chance. Not unlike the unending assault on Palin. For the Fair Tax to be viable, it would require the repeal of the 16th Amendment. It would be virtually impossible to get the necessary support in Congress to pass, not to mention the 2/3 of the states. There are too many vested interests in government. Even if you could, it would take years to pass. I don't think we have that long to wait. Cain's idea would be a great first step towards Fair Tax without having to take the 'leap of faith' it would require. Might it go to 29-29-29? Possibly. Would the 30% get bumped to 40 or 50%? Possibly, depending on circumstances. Once you raise it, it won't come back down.
ReplyDeleteDoug - Happy to see you letter today - short and spot on. Yes - no precursors to High European income tax - consumption tax debacle.
ReplyDeleteIt is difficult to criticize Herman and his 9-9-9 tax reform plan when no numbers are yet available. 9% of Corporate what? Profits? 9% sales tax on what? Everything? New goods only? 9% income tax on what? Gross income? What deductions/exemptions? Too many unknowns so far.
ReplyDeleteWhy do all of you seem to have your shorts/panties in a wad over multiple,complementary tax systems? The States/Local governments are all funded with several types of taxes. The VAT is in use by over 130 nations worldwide. There are no unknowns with a VAT, but a broad based national sales tax has never been successfully implemented anywhere. A small VAT and a simplified income tax seems to be a reasonable fix. Stay tuned!