Blogs » Politcs Plus » 9-9-9...A look under the hood



Now that Herman Cain has become the fifth Republican presidential candidate to be either in first or second place; it's time for him to be put under the national spotlight. After much discussion, the pollsters of the recent New York Times/Wall Street Journal poll went back asked the responders why they chose Herman Cain. They found out that most of them liked the fact that he was a businessman not a politician. They also liked, a message they can understand, which is catchy and simple; 9-9-9. The results of that poll are interesting because the percentage points Herman Cain won are the exact amount that Rick Perry lost. It's still early but even thou Mitt Romney has not faltered,his poll numbers are flat lined at about 23%. He's like that wayward son- in- law, as long as my daughter likes him, I hope that he will turn out to be a winner, but it won't break my heart, if she finds someone much better.

According to Trip Gabriel and Susan Saulny, of the New York Times the 9-9-9 policy idea came as Herman Cain, Rich Lowrie(Cain's economic adviser) and Clark Barrow, a research assistant, were aboard a flight flying at 58,000 feet this summer, between Atlanta and New Hampshire. They wanted a simple plan where Cain could utter the three digits repeatedly. This strategy fits businessman Herman Cain, because he's an excellent retail politician. Herman Cain likes to portray himself as a non politician, but he was the co-chairman of the failed Steve Forbes campaign of 1996. This plan falls right in line with Cain's past support for the Fair Tax or a single rate for all taxpayers. The formula was simple because Cain wanted his economic adviser to do a “regression analysis" that would allow the government to eliminate all existing taxes, including capital gains and the estate tax but collect revenue from just three streams. Mr. Cain's economic adviser doesn't think his lack of understanding of economics' is limited because he doesn't have a Ph.D. The plan has drawn fire from both the right and left because conservatives are wary of a national sales tax. I found Mr. Cain to be a little loose with the truth because he said an independent analyst found it would raise the same revenue as the existing structure. The analyst Mr. Cain was referring confirmed that it was revenue neutral if it had been in place in 2008. That analyst when onto say that it's not a plan that he would do, but the numbers are more like 9.1 but the triple digit 9.1 just doesn't sound the same.

As I have stated before, Mr. Cain may not be a politician, but he answers questions like one. He keeps saying that payroll tax for an individual is 15.3%. He's adding what the FICA tax will be when it goes back up to its normal rate of 6.2% and the current rate 1.45% for Medicare, but he's also adding, the portion the employer pays to arrive at the 15.3%. When discussing his proposal, he won't deviate from the $50,000 example because it won't take much to show how his plan is disproportionately unfair to the working poor and the middle class. He knows that, but according to his website, he wants to eventually abolish Medicare and Social Security and replacing the latter with a Chilean model, which is privatizing it.

Herman Cain has been at the bottom tier for a while, so his 9-9-9 plan wasn't catching fire but now Bruce Barlett, who held senior policy roles in the Reagan and George H.W. Bush administration and served on the staffs of Jack's Kemp and Ron Paul, has given the plan a closer look.

The 9-9-9 plan will benefit those making over $1 million dollars a year because they count for 98.7 percent of all receipts by C corporations and shareholders ‘pay taxes individually on their gains. The plan would further eliminate all taxes on profits earned by multinational corporations outside the United States. According to an economist with Tax Analysts, that would include the 50th largest corporations in our country.

Mr. Cain would abolish all taxes on capital gains depriving the federal coffers of $100 billion, According to the Tax Policy Center. Despite the spin that it would benefit average Americans, 2/3 of all capital gains are reported by those with incomes over $1 million. Eliminating the Estate Tax or as conservatives like to call it the "Death Tax" would be just another tax cut for the wealthy.

I think most people are more interested on the individual tax rates. Individuals need to know that the 9% will be applied to gross income because the standard deduction, and the exemption allowance would be eliminated leaving only the deduction for charitable contributions. The Earned Income Tax Credit, Child Tax Credit, education credits, and all other adjustments would be eliminated. That means that 47%, that don't pay federal income tax will now pay a 9% rate. We all know that the states will not give up their sales tax, so the national sales tax of 9% would be added to the state amount. I might add that the 9% will not be applied to old items. Will this discourage purchasers from buying new homes and cars since the 9% national sales tax won't be applied to those items? I believe that we will hear from the automotive and real estate lobbyist sooner rather than later. I do see some possible new tax shelter's spring from this vague plan.

I don't think 9-9-9 will ever become a reality because in about two weeks, Herman Cain will take its rightful place as a second-tier candidate. He's enjoying it for now, selling more books, shaking hands and enjoying the spotlight. Grover Norquist, in speaking for his wing of the Republican Party told Joe Scarborough this morning, that it doesn't matter who gets the nomination because all he wants them to do is sign legislation passed by a Republican Congress. I guess Mr. Norquist doesn't care what they do as commander- in- chief. In that role the president often has sole discretion.

As long as we have our huge income inequality, where just .01 % own 6% of the wealth; a flat tax or anything similar to that, will always be disproportionately unfair to the working poor and the middle class. As the old saying goes, “the rich will get richer and the poor will get poorer. “ That's not saying that we could never have a flat tax, we just have to wait for a more level playing field.