9-9-9 CAN SAVE OUR COUNTRY
By Dick Morris, The HILL
In 1980, facing a terrible economy, Ronald Reagan called for a new tax program: 10-10-10. Based on the Kemp-Roth bill, he called for 10 percent cuts in income taxes for three years. He got it, and it kindled 20 years of prosperity.
Now, Herman Cain understands that we need fundamental reform to get our economy moving. He calls for replacing the current system with just three levies of 9 percent each on personal income, corporate income and consumption. There would be no capital gains tax, inheritance tax, Social Security tax or Medicare tax. Just 9-9-9.
His proposal is breathtaking. Currently, the lowest top tax rate is Poland’s 18 percent. And Poland is the only European nation that had no recession. If Cain passes 9-9-9, we will thrive and become the destination of choice for every business and businessman. Look at what Reagan’s tax cuts achieved, and at the best-performing state economies, where there is no income tax.
The proposal, naturally, attracts critics and skeptics.
Some worry that it will add to the deficit. But that’s not likely.
· Americans now earn $12.5 trillion of personal income. Tax it at 9 percent with no deductions and you generate about $1.125 billion.
· We spend $10.3 trillion. A 9 percent tax would yield about $927 billion.
· Net corporate income (after dividends) is $1.1 trillion. A 9 percent levy would generate $100 billion.
· That comes to $2.152 billion, about the same as our actual revenues of $2.162 billion for fiscal 2010.
And then, when you factor in the economic growth this plan will engender, the scenario becomes even better.
Liberals worry that the tax would shift the burden from the rich to the middle class. No, sir. Americans making $50,000 to $60,000 a year now pay an average of 6 percent of their income in income taxes. But they also pay 6.5 percent in FICA levies and 2.9 percent in Medicare payroll taxes (a total of 15.4 percent). The Cain proposal would replace these with a flat 9 percent, saving them 6.4 percent.
Of course, the middle class would also have to pay a 9 percent sales tax, but it would be largely offset by the savings in their payroll taxes.
Cain says that competitive pressures would hold down prices and force businesses to eat much of the 9 percent sales tax. Employers would not have to pay their 6.5 percent share of payroll in Social Security taxes, and their corporate taxes would be cut. For commodities with high price elasticity — like cars — competition will hold down prices. But for inelastic purchases — like food and drugs — some of the tax would probably be passed on. For the middle class? It’s a wash.
More compelling is the possible impact on the poor. A family making $20,000 to $30,000 a year pays only 3 percent of its income in taxes (much of it more than offset by tax credits). But it still pays 6.5 percent in FICA and 2.9 percent in Medicare taxes. So the requirement that such a family pay 9 percent in personal income taxes would probably be fully offset by the cut in payroll taxes. But the poor might face higher prices. Cain plans to spell out how he can mitigate the impact on the poor through special empowerment zones. We need to see the details. Certainly, the poor would benefit from the increased employment, wages and growth the Cain tax cuts would generate.
Conservatives worry that 9-9-9 will open the door to a European Value-Added Tax that starts at 9 percent but goes up each year. Cain proposes that a two-thirds vote be required to raise rates. But a simple act of Congress could change that.
The real answer is political. If the Republican Party surges back to power in 2012, captures the Senate, keeps the House and takes the presidency, it can make sure the rates don’t go up. Republicans usually can count on 40 votes in the Senate; we just have to use them.
The 9-9-9 is a good, good plan that can save our economy.
Yes I understand there has to be changes or social security will eventually go bankrupt the same with medicare, as 4 medicaid there needs to be an overhaul with medicaid.
And change is never easy it is always hard especially when we are trying to better the system, I dont want America becoming another Greece.
I understand Dweller, and as I said I am open to some changes and willing to listen and am open to a system that is workable, attractive, available, and reliable as long as they keep getting there monthly checks every month.
It won’t happen all at one time, Clinton; it will happen only as — and WHEN — the People see that some other arrangement is more attractive and reliable and workable
— and available.
I favor some changes to shore up social security 4 years to come, but I am dead set against an outright elimination of social security, the American people wont tolerate an outright elimination of social security
Lots of people have proposed eliminating Social Security — but NOBODY (including Cain) wants to get rid of it for those who are presently eligible for it (or who will be eligible for it any time soon). The idea isn’t to leave anybody in the lurch who has reasonable expectation of being able to rely on it. The idea is to switch over to something better before the system collapses under its own dead weight and becomes of no use to anybody.
I disagree, nominate Cain Obama wins not by a landslide but Obama gets relected, Its more important we nominate someone that can beat Obama and I honestly dont believe Cain can do it. But Romney can beat Obama. And today I read some stuff that turned me off to Cain, I read that Cain wants to eleminate social security, if thats true Cain lost my vote, what about elderly that worked all there lives 4 social security I also read that Cain said all poor people are poor cause they chose to be poor, if Cain realy said that I would tell Cain right to his face hogwash not all the poor are poor cause of there own doing, I want Obama out to, I have made up my mind I am voting 4 Romney period
Not by the Tea Party folks, it’s true, but he does seem to be the favorite of the GOP establishment — who (rightly) fear a hostile takeover by the Tea Party (something I, for one, would welcome). The only way I can see him getting the nomination, however, is if he repudiates Romneycare (which seems unlikely). If he doesn’t repudiate it, then not only does he thereby throw away what is perhaps the strongest issue the GOP has going for it in 2012, i.e., Obamacare — but he even gives a campaign boost to BHO: who can then claim that he drew “inspiration” for Obamacare from Mitt’s experience in Massachusetts!
I can almost hear fingernails on chalkboard even as I contemplate it. . . .
Could be, but if he’s to be elected, he needs to gather to himself a team that can SPAR with him: practice throwing everything-but-the-kitchen-sink at him (yeah, yeah, metaphorically speaking, of course), because he’s going to have to be good on his feet (like Romney’s learned to be) — and while Cain IS a quick study (and that’s all to the good), you can’t DO your studying while you’re in the ring.
Agreed
Arnold,
Good analysis. And indeed, even if a turd run against Obama, I’d vote for the turd.
And to answer my skeptics yes I would gladly vote 4 Cain over obama, any repulican is better than Obama, I just think Romney has the best chance to beat obama
I will vote 4 any republican over obama, but sorry to say if it comes to Obama and Cain Obama gets relected, My gut feeling tells me Cain cannot beat obama, I may be wrong but time will tell.
Most of us here in the USA are looking for fundamental changes in the way government is funded and the degree to which we want government to interfere with the private sector. That, plus the fact that Herman Cain seems to communicate better with most people than all his competitors, has led to him now being the leading Republican candidate for the presidency in the 2012 national election. Irrespective of whatever happens in the New Hampshire primary election, its counterpart in Iowa, South Carolina and most of the other early-voting states will be solid winners in the Republican primaries in those states. People here are tired of lying politicians falling back on the same damned excuses of why, out of every dollar spent by government, 50 cents is borrowed. I think it is to Cain’s credit that he never has been involved in this before.
In any case, the only viable Republican candidates are now Romney and Cain. Perry has fallen impossibly behind, along with Bachmann. Paul is too old. Gingrich is just warmed-over 1990s. Cain has the momentum, which is everything in American primary election cycles. Romney had a built-in lead right from the get-go. But he has not been accepted by the Republican Party folks who actually vote in the primary elections. Partly it’s because of Romney’s flip-flops on issues important to them. Partly it’s because of his Mormon religion, which is utterly unacceptable to many of the Evangelical Christians who make up a hard-rock Jeffersonian core of the Republican Right. But most of all, I think that a major core of his vast attraction is his utter candor, with none of the wrappings of fakery about himself, his background, or his ideas for running the USA. I think Herman Cain now has the edge, and that it is his campaign to loose.
One amazing aspect of this election has been the way Cain has been picking up some of his strongest support from deep=South white Christians whose fathers and grandfathers less than 50 years ago would have rioted over the thought of Cain or any other black American just sitting down at a cafe counter with them and trying to order a cup of coffee.
In any case, for those of you who like me vote in US elections, the choice of candidates on that first Tuesday of November 2012 is now likely to be Barack Hussein Obama Jr in one corner and either Mitt Romney or Herman Cain in the other. Speaking for myself and I think most other voters here, I would vote against Obama no matter who is running against him. That’s how bad matters have developed. And I think that if Cain is elected, he will operate a lot like a Republican version of Harry S Truman.
Arnold Harris
Mount Horeb WI
Nova Cain’s 999 plan entails a 9% tax on groceries. Who’s that gonna hurt? What did this clown do? He ran a fifth rate pizza chain. The Presidency is not an entry-level position. All he wants to do is raise his speaking fees and sell his garbage books. We used to have quality candidates vying for the Presidency. Now, we’ve got the likes of this schmuck.
Cain’s plan taxes the poor and middle class more so as to tax the rich less. It’s just a buncha bull.
I guess we really don’t understand the tax system. I was listening Mark Levin the other night and he wasn’t endorsing the plan but rather said Cain was attempting to keep the tax simple. The government never does anything simple.
We certainly need more information. Like the old saying “figures don’t lie, liars figure”.
I believe Cain is a principled conservative.
A contrary opinion
READ MY LIPS — “NO NEW TAXES.”
— George H. W. Bush, in his run for the Presidency. Once in office, he raised taxes.
Cain talks a good talk, as do the rest. Let’s see what they do after one of them is elected.