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Cain’s 9-9-9 tax plan is simple: most will simply pay more

Cain’s 9-9-9 tax plan is simple: most will simply pay more
By John W. Schoen, Senior Producer

When it comes to Republican presidential candidate Herman Cain’s proposed 9-9-9 tax plan, there’s one thing all sides agree on: it’s very simple.

If you’re a corporation, own a small business or count yourself among the richest Americans, you’ll simply love it. If not, you’d simply pay a lot more in taxes.

Everyone hates the current tax code. A Congressional supercommittee is attacking the mess as part of a broad proposal to balance the federal budget. President Barack Obama wants to pay for his jobs stimulus package by raising taxes on the wealthiest households. Corporations are agitating for a “tax holiday” to being home over a $1 trillion in profits stashed overseas to avoid the IRS back home.

Now Cain, who has recently surged to the front of the pack of GOP presidential contenders, is drawing attention to a radical idea. Rather than slog through the political morass of overhauling the existing system, just scrap it entirely. No more deductions, exemptions, incentives and tax loss carry forwards

In its place, Cain wants the government to pay its bills with three sources of revenues held to single-digit rates: a 9 percent tax on all consumer purchases, a 9 percent “business” tax and a 9 percent income tax.

Cain claims the plan is already generating popular support among voters, which will make it much easier to implement in the political quagmire that has numerous tax reform proposals.

“I can be walking through the airport going through security and a TSA agent will say, ‘Hello Mr. Cain: 9-9-9,” Cain recently told CNBC. “If the public understands it, they will support it and demand it. That is going to be the difference. It is not a complicated piece of legislation.”

But the odds are much higher that, when the public understands it, the vast majority of taxpayers will be horrified to realize they face a huge tax increase. That assessment comes from Bruce Bartlett, a senior official in the Reagan and George H.W. Bush administrations, who described the plan as a “distributional monstrosity.”

“The poor would pay more while the rich would have their taxes cut, with no guarantee that economic growth will increase and good reason to believe that the budget deficit will increase” Bartlett recently wrote in the New York Times. “Even allowing for the poorly thought through promises routinely made on the campaign trail, Mr. Cain’s tax plan stands out as exceptionally ill conceived.

http://bottomline.msnbc.msn.com/_news/2011/10/13/8304334-cains-9-9-9-tax-plan-
is-simple-most-will-simply-pay-more

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