One of the centerpieces of Herman Cain's campaign platform is his "999 Plan," which would eliminate many taxes (the income tax, payroll tax, death tax, capital gains tax, etc.) and replace them with a 9% personal income tax, a 9% corporate income tax, and a 9% sales tax. You can read the plan for yourself here.
So, can it work? In my opinion, our current tax system is so complicated as to be abusive, wasting needless money and time as Americans struggle to comply with it. Cain deserves credit for proposing a bold solution like the 999 Plan and emboldening people to demand not just tweaks to our tax code, but actual substantive reforms.
To be fair, I'm not an economic expert. I double majored in Political Science and German and then headed to law school. I've always filed my own taxes and done my best to be well-read on current events and economic issues, but I'm not the next Milton Friedman. So, that being said, I've gathered up several articles and videos here from people who actually are economics experts, and you can see what they have to say about Cain's plan:
Real Clear Politics | Does the GOP Take Surging Cain Seriously?
...And on Wednesday, the influential Club for Growth, a key player in getting conservative candidates elected in GOP primaries last year, issued a statement urging activists to take Cain seriously.
“A clear message promoting economic growth, like the one Herman Cain is presenting, is essential to defeating Obama. Republican primary voters ought to give Herman Cain a close look. We are,” said Club President Chris Chocola.
Club spokesman Barney Keller added, “His 9/9/9 [tax] plan is bold, intriguing and appears strongly pro-growth -- we look forward to reviewing it in more detail in the future. Any candidate that clearly articulates the pro-growth message should be taken seriously, and I think that’s why you’re seeing his surge in the polls.”
Wall Street Journal columnist Daniel Henninger even brought up Cain’s business experience as compared to Romney’s (which he promotes regularly), writing that, “measured by résumés, Herman Cain's looks deeper in terms of working on the private sector's front lines.”
Put it this way: The GOP nominee is running against the incumbent president. Unlike the incumbent, Herman Cain has at least twice identified the causes of a large failing enterprise, designed goals, achieved them, and by all accounts inspired the people he was supposed to lead. Not least, Mr. Cain's life experience suggests that, unlike the incumbent, he will adjust his ideas to reality.
Herman Cain is a credible candidate. Whether he deserves to be president is something voters will decide. But he deserves a serious look.
Since his win at the Florida straw poll, everyone is taking a second look at Herman Cain and the policies he’s proposing, particularly his ‘999’ tax plan. The Wall Street Journal’s Senior Economics Writer Stephen Moore joined Happening Now to comment on the plan and whether it would work...
It is incredibly bold...this would totally restructure our tax system...a lot of business people I've been talking to are saying this would be great for American business, for American competitiveness...
If you ask economists about what they think about this plan, almost all of them will say, "are you kidding, this would be great for the US economy, to get the tax rates down...
I think what Herman Cain would say, and I've heard him say this in the debates is...this is a plan that gets jobs back, this is a plan that raises people's incomes, so you're going to have a rising tide that lifts all boats and all income groups are going to be better off with those added jobs. I think that's a very persuasive argument...
There's been some new studies that have looked at this very plan by independent analyses and they have found that this actually would raise about the same amount of revenue as our current 35% corporate tax structure and our 40% personal income tax rates...
[It] can't help but bring jobs back to the United States.
In The Washington Times, Herman Cain outlines his tax reform initiative. Reader S. Rao writes in with the following observation:
Herman Cain, whom I didn't think of supporting, had quite a revealing supply-side reference… today: "The capital gains tax is nothing more than a wall separating those with ideas from those with capital."
*Very* similar to Jude Wanniski's (from Laffer) wedge concept. I don't think it is unrelated to Cain's surprising vault to the top of the primary polling.
Another Wanniski concept Cain is implicitly endorsing is the difference between the incidence and the burden of a tax. The incidence of the cap gains tax is on the wealthy, but the burden is on the entrepreneur.
See Jude's thoughts here.
As Wanniski always said: the electorate already knows the best economics.
The Cain rise probably explains the large drop in gold/$ price this week.