I really like Herman Cain. He’s smart, successful and charismatic, everything we look for in a president. When everyone else is squabbling and getting underneath one another’s skin at debates, he remains above it all. He looks like he’s genuinely having fun. He wears like a pair of old sneakers — not the flashiest, newest or most polished in the closet, but squeak-free, silky smooth and oh-so comfortable.
At every Cain appearance, his speech will inevitably lead to his bold new tax plan. He only has to get out the first word, “Nine,” and the crowd will enthusiastically shout out the finish, “Nine! Nine!”
Other than a few nagging concerns, I’d never given 9-9-9 much thought before. I knew it entailed a flat 9 percent tax on personal income, business income and consumption, but that was about it. All this changed when a Facebook friend insisted that the business portion of the plan taxed gross sales. Given the fact that both U.S. Rep. Paul Ryan, R-Wisc., and Art Laffer, author of “supply-side economics” and the “Laffer Curve,” endorsed 9-9-9, I didn’t bother investigating. So I told my friend she had to be wrong. I insisted that only net profit could be taxed as income, not gross sales, and I left it at that.
Several days later, however, another friend (a Cain supporter) said 9-9-9 did indeed tax gross sales. Now I had to get to work.
According to Cain’s website, the 9 percent tax on business income would apply to “gross income less all purchases from other U.S. located businesses, all capital investment, and net exports.” In other words, items being sold for export are 100 percent tax-free, giving American businesses a better footing in the world market. Giving only domestic purchases tax-deductible status gives a leg up for American suppliers. However, some businesses can only rely on foreign markets for their raw materials. Stringed musical instruments that require exotic woods for their manufacture come to mind.
Conspicuously absent from Cain’s list of tax-deductible expenses are labor costs. If labor expenses are not tax-deductible, the result is that businesses would be taxed 9 percent on wages and salaries. However, 9-9-9 would eliminate all payroll taxes, which currently stand at 7.65 percent. That fact, combined with a new, lower tax rate for most businesses, should be a much-needed boon to the private sector.
On its face, 9-9-9’s simplicity, like Cain himself, is a breath of fresh air. As a kid, I used to laugh at Rube Goldberg cartoons, which, as described by Wikipedia, “depicted complex gadgets that performed simple tasks in indirect, convoluted ways.” Goldberg would have appreciated our U.S. tax code. It’s right up his alley, and could have easily been designed by him.
At a recent debate, former Massachusetts Gov. Mitt Romney applauded 9-9-9’s simplicity, but said that simple plans are often inadequate. My reservations are the exact opposite. Perhaps the plan isn’t simple enough. The danger in taxing both income and production is that we could end up with a European-style value-added tax. My other concern is that it may turn into a 15-15-15 plan.
U.S. Rep. Allen West, R-Fla., recently echoed my reservations at a town hall meeting. Our fears are based upon Congress’ insatiable appetite for ever-increasing tax revenue. No matter how much Congress receives, it stands before us each year Oliver Twist-like with bowl in hand, imploring, “Please sir, may I have some more?”
One thing 9-9-9 would accomplish is it would broaden the tax base. Almost half of Americans pay no taxes at all. It’s long past the time that more people have a stake in our country’s future.
So which is it, panacea or problem? The plan, like its No. 1 proponent, could fit like a comfortable pair of old sneakers. Perhaps it just needs a bit more breaking in.
DONATE TO BIZPAC REVIEW
Please help us! If you are fed up with letting radical big tech execs, phony fact-checkers, tyrannical liberals and a lying mainstream media have unprecedented power over your news please consider making a donation to BPR to help us fight them. Now is the time. Truth has never been more critical!
- ‘Act like a grownup’: Drunk driver sobs when she loses plea deal by coming 4 hours late to court - July 23, 2017
- ‘I would’ve fired her the day I met her’: Glenn Beck reveals more about Tomi Lahren mess - July 23, 2017
- Canadian thug beats 74-year-old cyclist bloody with a club in road rage fit– and they say US is more violent? - July 23, 2017
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.