Herman Cain's tax plan brought to you by the number 9. 9. 9 percent sales tax. Ha..ha..ha!

I must admit, Herman Cain’s so-called “999 Plan” is a hell of a gimmick.  It might not win him the nomination (keep in mind that at this time in the last election cycle, the Republican nomination looked like it was going to come down to Rudy Giuliani, Fred Thompson, or Mitt Romney while it was a foregone conclusion that Hillary Clinton was going to win the Democratic nomination), but it has at least put Cain on the map.  If everyone is talking about your proposal, and I mean everyone, that has to be a whole heck of a lot better than getting no attention at all.

But is it an actual good plan, or just a good marketing tool?

  • It has the looks of being way too regressive.  Sales taxes by their very nature are regressive (and some states already use sales taxes pretty aggressively, in Alabama under the Cain plan, sales taxes would be a whopping 19%).  Also taxing wage income but not investment income is also a regressive component.  In fact, the director of the tax and budget policy at the Center for American Progress Action Fund estimates that almost everyone making under $100,000 will see a tax hike while the richest 1% would see their taxes cut by over half!
  • It’s also important to know that Cain would use this plan as a stepping stone to what he actually wants, a national sales tax in place of all other taxes.  So ultimately we would have just a regressive tax system.
  • Did the 999 plan come from a video game?  SimCity 4 has a default tax plan of 9% for residential taxes, 9% for commercial taxes, and 9% for industrial taxes.  It’s one of those things you want to be true, but you know it’s just coincidence.
  • Why 9%?  To borrow from a movie, I want somebody to just say, “999 plan?  That’s good.  Unless, of course, somebody comes up with an ‘888 plan’.  Then you are in real trouble, huh?”  Only just so we can see if Cain becomes flustered.  “No no no!  I said 999!  Nobody’s coming up with an 888 plan!  You can’t provide service with 8!  You can’t even feed people pizzas at 8%!  9’s the number!  9 baseball players.  9 Supreme Court justices.  9, man, that’s the number!

All of that said, the man has clearly struck a chord.  I think it’s because most people believe (and correctly in my opinion) that the current tax code is WAY too complicated.  And while other politicians mention tax reform, only Cain has actually laid a plan out on the table.  So if Cain’s “999 Plan” forces tax reform to become an election issue and forces others to develop their own plans, then perhaps the “999 Plan” could be considered a success after all.

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