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Herman Cain's 999 Plan Draws Praise, Skepticism – Finance – CBN …

Cain's 999 plan is part of what's propelled him to the front of the GOP field. Although the plan is resonating with voters, it's drawing criticism from economists.

Publish Date: 10/15/2011 2:00

http://www.cbn.com/cbnnews/finance/2011/October/Herman-Cains-999-Plan-Draws-Praise-Skepticism/

Why I Support Herman Cain For President – Forbes

Neon Tommy

Why I Support Herman Cain For President Forbes The author is a Forbes contributor. The opinions expressed are those of the writer. I have decided to support Herman Cain for president of the United States, and have joined his team of economic advisors. Central to my support are Cain's pro-growth … Cain's 999 Plan A Payoff For Koch SupportLez Get Real Interview with Presidential Candidate Herman CainRealClearPolitics Cain's 9-9-9 Plan: A Step In The Right DirectionNeon Tommy Patch.com -Daily Beast -OpEdNews all 5,377 news articles »

Herman Cain Wants To Kill Our Tax Code!

Herman Caine is the only GOP presidential candidate that wants to do it, and he’s rising super fast in the opinion polls!

The 999 Plan Isn’t Perfect

But like they say,

"Good should never be the enemy of the perfect" – Voltaire

and Rep. Paul Ryan just gave the plan a thumbs-up!

Art Laffer agrees and says,

"It would be far, far better than the current system".

*Arthur Betz Laffer is an American economist who first gained prominence during the Reagan administration as a member of Reagan’s Economic Policy Advisory Board (1981–1989).

And Chris Chocola, the president of the free-market Club for Growth, calls it,

"A truly revolutionary tax reform that would amount to a massive job-creating tax cut on investments, savings and income".

What Is Caine’s 999 Plan?

A 9% income-tax rate.

A 9% value-added net sales tax rate on business.

And a 9% national sales tax overall.

The sales tax part has come under attack from both sides of the political spectrum with many conservatives worrying that it will start at 9% and gradually get raised, whilst a good number of Liberals oppose it because they say its regressivity will hurt middle- and low-income people.

* A regressive tax imposes a greater burden, relative to resources, on the poor than on the rich because there is an inverse relationship between the tax rate and the taxpayer’s ability to pay as measured by assets, consumption, or income.

Cain’s Rebuttal Of Sales Tax Criticism

Everybody below the poverty line will be exempt from the sales-tax and the sales of existing goods will be exempt.

The sales tax will pick up revenue and help to lower the rate for everybody, especially the middle class.

And Caine’s economic adviser, Rich Lowrie says that.

"The sales tax is a replacement tax, not an add-on tax like you’d find at the state level. This is a key point. All we are doing is pulling out taxes that are invisible. We’re cutting the rates. We’re putting them back in at lower rates".

Lowrie is referring to the payroll tax, which in the Cain plan will go from 15% to 9% which constitutes a net tax cut and a good deal more transparency regarding costs and prices that are embedded in the current code.

"The 9-9-9 plan will add $2 trillion to U.S. gross domestic product, create 6 million jobs, increase business investment by a third and lift wages by 10%. And if you fold all that growth together, federal revenues go up by 15%", said Lowrie,

Would It Work?

Such a gigantic drop in marginal tax rates for individuals, 35 to 9%, or to 18% including the sales tax, and for businesses also from 35 to 9% would supply an incredibly strong economy-wide growth incentive, and if you’re looking for proof, then you need go no further than the Harding-Coolidge-Mellon tax cuts of the 1920s, the John F. Kennedy tax cuts of the 1960s and the Ronald Reagan tax cuts of the 1980s.

Remember, too, that the Cain tax plan would eliminate the double-tax on saving and investment by removing capital gains, estates and dividends from the tax code.

Given the current economic malaise, which in large part can be traced to the weakened balance sheets and net worths of families suffering from the multi-year slump in stock prices and home values, increasing returns to saving and investment through a much lower marginal tax rate should boost asset values, and might be just what the doctor ordered.

As for businesses, not only would they get a globally super-competitive 9% tax rate, but they’d receive 100% expenses for new purchases of capital equipment.

Gary and Aldona Robbins who once worked at the treasury priced out the Cain plan on a static basis and discovered it to be revenue neutral.

And the models suggests a $26 trillion tax base yielding $2.3 trillion in revenue for a 9.1% overall rate.

No Federal Or State Tax But Just A Sales Tax

I’ve personally yet to have anybody to explain to me why simply having a sales tax instead of ALL the other taxes wouldn’t be fairer.

The rich would spend more than the poor and therefore pay more tax, and what could be simpler than that?!

Tax preparers understandably hate the idea of course because simply having just a sales tax would put around 100,000 out of work.

The Three Biggest Lies the Government Is Telling You by Charles …

lewrockwell.com1/27/12

So I have chosen to focus on lies about each: the Federal Reserve, the orchestrator of monetary policy; the U.S. budget, the accounting of government fiscal policy; and a few of the Empire's war lies. I am sharing just a … The World Bank gets almost all of its money by way of the International Bank for Reconstruction and Development (IBRD),( also not a bank), which gets its money from taxes, the largest share coming from the American people. The IBRD also sells …

In defense of capitalism | RedState

www.redstate.com1/12/12

So all you people defending Mitt Romney's corporate activity as unassailable because by God the business of America is business and what not, remember he once made clear he didn't much care for you guys. …. (Actually it sounds quite a bit like what happened to the banks. …. I have said for months that Rush, Beck, Hannity even Palin keep telling us what our candidate should look like and then we have one and they won't put their money where their mouths are. …

The just released government’s “stress-test” results suggest that ten of the nation’s nineteen biggest banks will need a total of around $75 billion in new capital in order to withstand losses if the recession worsens.

According to the tests, some of the largest banks are stable, whilst others will need billions more in capital.

Meanwhile, government officials are stressing that the banking industry is still viable in spite of its vulnerability, but concur that it will need massive injections of capital if there’s to be an economic rebound.

The official line is, that none of the banks will be allowed to fail, and that it’s hoped that the tests will restore investors’ confidence, that not all the nation’s banks are seriously weak, and that those that are can be strengthened.

Kevin Logan, who is chief U.S. economist at Dresdner Kleinwort said, “Looking at the big picture, you can say that things aren’t so bad for the financial industry as a whole. The banking industry is not going to make a lot of money going forward, and that’s a dilemma for keeping banks solvent and getting them lending”.

The ten banks that need more capital, have until June 8th to develop a plan and to have it approved by their regulators, and analysts say that the test results sketched an encouraging but cautious picture of the banks.