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Memo to Snyder: Don’t stop the radical reforms now!9 responses to 9 false attacks on the 9-9-9 plan
October 16th, 2011 | 
Author: 
Herman Cain
Do you know why candidates for office tend to be reluctant to propose detailed plans? Because they know the plans will be flyspecked and picked apart by just about everyone. Inviting criticism doesn’t help you to get votes.
But fear of criticism prevents you from conceiving solutions to problems. So even if avoidance of criticism helps in propelling you to an election victory, how are you supposed to effectively govern? How are you supposed to fix the problems you told everyone you were going to fix?
That’s why I’m happy to see so much criticism of the 9-9-9 plan I’ve proposed. It shows that people are thinking seriously about a substantive idea. When people stop obsessing over “gaffes” and campaign strategy, and start honing in on fixing the country’s economic problems, we are getting somewhere.
This is not to say, of course, I’m going to leave poorly founded criticisms of the plan unanswered. Certain objections to the plan are circulating in the usual places, driven by the same kind of thinking that has left us with a stagnant economy, $14 trillion in debt and mounting entitlement obligations. These criticisms deserve responses, and here they are:
Claim 1: The 9 percent sales tax, which is one third of the formula, is regressive and hurts the poor, many of whom pay no federal income taxes now. Response: This claim ignores some important aspects of the plan. One is that we eliminate the 15 percent payroll tax, which allows for no deductions at all – not even for charitable contributions. Some critics have argued that the poor still come out behind because employers pay much of the payroll tax. That demonstrates a basic misunderstanding about how compensation works in the business world. An employer decides to accept a certain cost-of-employment for each employee, and the employer’s share of the payroll tax is part of that cost. It comes out of your compensation whether you realize it or not. Also, a flat tax is not – by definition – a regressive tax. Everyone pays the same rate. And it is not an added tax, but a replacement tax, whose total burden is determined by the consumer’s spending decisions.
Finally, the best way to help the poor is by spurring economic growth, which the current tax code will never do, and which the 9-9-9 plan is specifically designed to do.
Claim 2: Creating a new tax is merely setting the stage for higher rates on all taxes, as untrustworthy politicians will surely raise them. Response: First of all, that is not a criticism of the 9-9-9 plan. It is a criticism of politicians. If you don’t want the rates raised, don’t elect politicians who will raise them. Even if we repealed the 16th Amendment and eliminated the income tax, as some demand in return for establishing a consumption tax, politicians could raise that rate too. What’s far more important here is the fact that the very simple, flat-rate structure of the 9-9-9 plan, which allows no deductions, loopholes or exemptions (with the exception of charitable contributions for the income tax), is a far more growth-friendly tax structure than the mangled mess of rates, taxes, exemptions and ill-conceived incentives we have today. It virtually eliminates the massive compliance costs of the current tax code, and it restrains the size of government.
By taking away the politicians’ gateway drug of loopholes and deductions, we make it much more difficult for them to mess with the tax code. Having said that, any plan could be criticized for what it would look like if someone messed it up. The plan as I’m proposing it is a huge improvement over the status quo.
Claim 3: The plan redistributes wealth from the poor to the rich. Response: It does no such thing. It is fair and neutral, taxing everything once and nothing twice. What’s more, we are getting ready to propose empowerment zones for economically struggling areas in which the rates will be even lower. That will allow the poor to benefit even more from the plan than they already would.
Claim 4: The plan should have included a pre-bate to offset the sales tax. Response: The last thing we need is to establish another federal entitlement, which the proposed pre-bate would quickly become. And it’s not necessary. The consumption tax replaces ones already embedded in prices. It’s not the prices that would increase, but the visibility of the taxes being paid. Right now, money is deducted from your paycheck and you never see it, so it doesn’t feel like you paid a tax. But you did. With the 9-9-9 plan, you feel it, and I suspect a good many people who clamor for higher taxes will start to feel differently as a result. But they won’t be paying more than before. They’ll just be more aware of it.
Claim 5: The business tax represents a new tax on labor. Response: Paul Krugman of the New York Times makes this claim because we do not allow businesses to deduct the cost of labor from their taxable revenue. But the claim is bogus for several reasons. First, we are reducing the corporate tax rate from 35 percent to 9 percent, so the tradeoff is a much lower rate paid on more of a company’s income. Second, we treat capital and labor the same, both with the corporate tax and with the income tax. That is fair and neutral. What’s more, the current system taxes both capital investment by business and capital gains by individuals. That’s a double tax, and the 9-9-9 plan eliminates it.
Claim 6: The numbers don’t add up. The 9-9-9 tax wouldn’t generate enough revenue. Response: Several groups apparently “ran the numbers” and came to this conclusion, including Bloomberg News and the Center for American Progress. Our report, which they do not appear to have read, demonstrates that it generates the same revenue as the current tax code, and our methodology is visible for anyone to see. Those who are making this claim should release their scoring so their methodology is as visible as ours.
Claim 7: The 9-9-9 plan is a really an 18 percent value-added tax plus a 9 percent income tax. Response: That’s an argument? That some might be able to give it a disagreeable label? What we have done is split the incidence of the tax so it is harder to evade – since you’d have to dodge two taxes, not just one, to save the 18 percent. And by eliminating loopholes we’ve made that virtually impossible to do anyway. I don’t really care what people call it. What matters is how it works.
Claim 8: Some people (like Herman Cain) who may live off capital gains, would pay no income taxes. Is that fair? Response: First, one of the benefits of the 9-9-9 plan is that, even if someone doesn’t pay much or any of one of the taxes, he or she is still likely affected by the other two. More to the point, though, everyone has the same opportunity to work hard, earn capital and put that capital at risk. Whatever I have earned has come from hard work, good decisions (and some bad ones), a willingness to take risks and a constant honing of strategy. Nothing is stopping anyone else from doing the same thing. I realize many are being told there are no opportunities available to them, but that is not true and I wish people – for their own sakes – would stop listening to such doom and gloom and come to understand all the opportunity that truly exists, and learn how to access it.
Claim 9: It won’t pass. Response: Politicians propose things that can pass. Problem-solvers propose things that can work. One of the worst instincts of Washington types is to judge an idea not on its substantive merits, but on their perception of its political viability. I do not underestimate the challenge of getting any good idea through Congress, but I have said all along that if you propose a good idea, and the people understand the idea, they will pressure Congress to pass it.
So there. I welcome the robust discussion and the many questions that are being raised about the 9-9-9 plan. Asked and answered. What else do you want to know?
© 2011 North Star Writers Group
Posted in Herman Cain
134 Responses to “9 responses to 9 false attacks on the 9-9-9 plan”
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How would IRA Distributions be taxed?
I like the 9-9-9 plan, but I have a better idea. There has been a lot of negative press about the “9-9-9″ numbers.
Here’s a suggestion – do 10-10-10. It works just as well, but it is a lot easier for people to figure in their head when trying to figure out taxes and such. 10% is a simple math problem for anyone whereas to compute 9% most would have to pull out a calculator.
Another point, which some will find amusing – 101010 is binary code for the decimal number 42. In the Hitchhiker’s Guide to the Galaxy by Douglas Adams, a “computer” was built to find the “Answer to the Ultimate Question of Life, the Universe, and Everything” which computed that the answer was “42″.
So maybe 10-10-10 IS the answer.
And for the idiots out there who like to turn numbers upside down, 010101 is 21 in decimal, a fairly safe number being made up of 3 times 7, both of which are considered lucky numbers.
All joking aside though, I think that 10% is a number that people can understand a lot better and if they know that they are purchasing something for $15.00 that the tax will be $1.50 rather than not really knowing how much they should pull out of their pocket at the register until the clerk tells them.
All the best!
Would anything change regarding our taxes for Social Security and Medicare funding (FICA)?
‘up twinkles’ to you Herman Cain. I love the fact that it takes the power away from the politicians and into the hands of the people. 9-9-9 will require a balanced budget and pet projects will be eliminated, like ‘the Cowboy Poetry Festival.’
I came up with this four years ago.
Claims 1, 2 and 3 are all true and enough to dismiss the super insider, elitist and formers Federal Reserve Chairman’s plan altogether. ███ ████’s plan is a real plan that will save the economy and the country. ███ ████’s plan is not just a pizza marketing gimmick but a real plan with real numbers, real calculations and real substance. You can read the full plan here http://c3244172.r72.cf0.rackcdn.com/wp-content/uploads/2011/10/RestoreAmericaPlan.pdf
it would be an easier plan. easier for the IRS to collect taxes. i could not trust a man who worked as a past chair for the federal reserve bank – the very private institution who’s policies have bankrupted this country.
I like the 999 plan except for one thing – There should never be any tax on food. In the state of MI we have sales tax on everything but food products and that is fine. Works well here.
There never should be a sales tax on food products as this would be too hard on the poor.
Are you serious? A SimCity plan is the solution for this mess?
Why should we trust you knowing your support for the bailouts, your strong opposition to the Fed audit, your dissmissal of the housing bubbel when it was right front of your face, your connection to the Koch bros and other coporations, your past job as Fed chairman in kansas city and knowing how much damage this institution did to the american economy!!! Are you serious?
“Nothing is stopping anyone else from doing the same thing.”
Has this guy ever been to compton? or detroit?
Herman you are getting the attention now. That is the best news! And, your 9-9-9 plan is comprehensive. When seen as a whole it is much greater than it’s parts – that’s the point folks are missing when they disect it. This is a whole plan that promotes growth for our nation and that leads to more jobs, less debt, less government and more FREEDOM AND SECURITY FOR OUR CHILDREN AND THEIR CHILDREN, ETC.
There is no authority for a national sales tax, therefore we don’t have a national sales tax.
I am afraid to open the door to a NEW TAX MECHANISM.
First repeal authority for an income tax, then we can discuss a new tax on national sales.
Mr. Cain,
I have been an advocate of the Fair Tax Proposal since it’s inception by Neal Boortz and Congressman John Linder. I would like to see you get elected as President or Vice President. If you can convince all of us Fair Tax people that the 9-9-9 tax is as good as, or better than the Fair Tax, I know that I will vote for you. I think that many others would do the same. We need someone with guts and intelligence. You have been blessed with both. Please explain your 9-9-9 tax plan to the Fair Tax. Then let me know how I can help you get elected…P.S. I think your $5 on Friday is a super idea…it lets us folks on a limited budget feel good about supporting the candidate of our choice without feeling intimidated by the RNC.
er, a federal sales tax is unconstitutional. the constitution is very clear on the types of taxation allowed. A federal sales tax would require an amendment to the constitution, just like the income tax required.
This gives all the power to the government and does nothing to help this country… Cain knows nothing about the economy or are all the other economists wrong… Look and see where this plan came from…! It was proposed by a big business man…! Duh….! Why are Americans so slow to see the truth…!?
I find it incredible that Americans so compliantly take the outrageous tax and spending as a given and debate ways to fund it.
The PEOPLES’ response should rightly be, STOP SPENDING! Kill the alphabet soup agencies, the overregulation, the spending on the phony wars, most of the 700+ American military bases all over the wold, gov’t. officials salaries, perks and pensions, BAILOUTS
Can you explain your “empowerment zones”….I agree with several others that there should not be a tax on food and medicines but everything else should be fair game. What is your response? I am for you Mr Cain!
You have our vote!
I do like the persons suggestion of it being 10-10-10. I love the concept anyway, but I love more that its a plan…and it’s being proposed by a man who can explain it and fight for it. I know that President Cain can make this work with some compromise maybe needed but we cannot have any HOPE without a CHANGE that makes sense! Obama had the possibility of doing this – but blew it when his CHANGE made no sense at all.
The more I try to find fault in your 9-9-9 plan, the more I tend to like it. Unlike the healthcare reform and Dodd/Frank financial reform bills that have business in fear of how they will negatively effect commerce moving forward, this plan plan does not cause harm in expense and labor costs to business as they move forward. It will relax the choke hold fear factor that government programs have on business operations. If it is half of the pro-growth tax policy change that I see it to be, our new economic problem might be a lack of workers to do the new jobs created by a growing economy. It would be nice for our national immigration problem to be how to get illegal immigrants registered to handle the labor needs of new industry expansion caused by a good “gloves-off” handling by the government.
I think most people, from both left and right, want to stop the special interest influences on our politicians. By enacting a tax code without loopholes and deductions, except for charitable contributions,this puts us on that road. By allowing only individual contributions to campaigns and parties,it would march us further down the road. If groups,pacs,unions,businesses or corporations want to involve themselves in the election process, they could sponsor a debate. Crony capitalism has corrupted our elections and Washington. It needs to stop.
I will be voting for Mr. Cain because he is an honest man who has the skills to solve problems with common sense solutions. Imagine managing our government as a successful business. I think we will get more bang for our buck when we vote Mr. Cain into the Oval Office.
As far as getting this 9-9-9 policy passed, I would expect you to get it passed when it is your platform. I don’t remember stimulas or obamacare being any part of the platform of HOPE and CHANGE that the current administration gifted us with.
If these policies had been proposed by Mr. Obama, we would have a Pesident McCain. Sometimes we have to take a step backwards before we can take a step forward.
If we had gotten a President McCain, we wouldn’t have gotten a 9-9-9 plan. or a POTUS Cain.
GO HERMAN! GO HERMAN! GO HERMAN! gO HERMAN!
the 9-9-9 plan sounds inteeresting. But a national sales tax on top of state and local sales taxes will kill retirees and pensioners living off savings and on fixed incomes that will not be adjusted for COLA. Particularly deadly during incresing inflatioon.
Love the 9-9-9 plan! And you’re right Herman! Anybody can make it with just hard-work and dedication!
Mississippi’s gov Haley Barbour is fond of quoting a corporate exec as saying “The main thing is to keep the main thing the main thing.” Selling the absolute need to replace the federal tax code without scaring the bejesus out of seniors, invalids and the truly poor is a main thing that cannot be avoided. 999′s achilles heel is state taxes, the impoverished and the retirees. “Simple and transparent” means you can’t run as a problem solver by ignoring serious problems. This is an opportunity for our candidate to acknowledge that his responsible 999 program at the federal level creates implementation problems at the state level, and to proceed to prove his problem-solving acumen by suggesting solutions involving state-federal cooperation. For instance, much as a TIF freezes government tax collections at the pre-development level and invests taxes generated post-development to fund improvements, the federal government could allocate new tax revenues generated by implementation of the 999 plan toward,first, the current deficit, next, the national debt, and finally, grants to the states that would be targeted to lower state and municipal taxes or, in their absence, lower medicaid premiums. For campaign purposes, this could be called something like the 333 plan, designed to complement the 999. The real point though, is that these concerns common to both the 999 and the Fair Tax will need to be addressed, or they threaten the entire campaign. The ‘main thing’ is winning one for the founders.
[...] in America. NRO bashes his 9-9-9 plan. Economic collapse takes a shot at the plan too. Herman Cain responds. Talk upon the plan in relation to the “99%“ Share this:ShareTwitterLike this:LikeOne [...]
Mike P.
There is “authority” for a national sales tax. It is called the Constitution of the United States. Read Article 1, Section 8 and find the word “excise” and know that it is defined as a tax on revenue. Excise Tax: A tax that is measured by the amount of business done (not on property or income from real estate)
When you sell something you receive revenue and when taxed that is in keeping with the constitution.
The best thing about Herman Cain is he is not Mitt Romney, Rick Perry, Newt Gingrich, Rick Santorum, etc in that Cain is not an “establishmnet” Republican. We don’t need any more of these ‘establishment’ politicians in Washington. Every one of them will have to sell their soul to get the help from the RNC. I don’t believe Cain will do that. He is his own man.
So then what about states sales tax? Washington state is .0847 to .09, is that added to the 9 percent. Holy crap that would be an 18 percent sales tax on everything you buy? I think that capital gains should be taxed also. all this corporate greed is hidden by capital gains. Lower to middle income really has not capital gains to make up for all this tax. What say you herman cain? I love your direct attitude but this 999 thing is making me nervous. I am a business owner and if the taxes are too high my client base goes away.
I would like to see you take on the critics more directly, rather than just defending the plan. I suggest focusing on the fact that we’ve been subjected to the expertise of these same economists and politicians for years, and take a look where that has gotten us! Yet, they deride your 999 plan and we’re supposed believe that they got it right this (one) time? The way I see it, if everyone inside the beltway is against it, you’ve probably got a winner!
This plan is the best that is out there. People will keep complaining all they want but its better than anything they can come up with. People say this will hurt the poor but it could actually help some poor. The consumtion tax will cause people to think on what they really can afford and not just they want. You see people who claim they cant afford food for their family but drive a car that many middle class families cannot afford to own. With 9% sales tax on that item they might think again about buying the expensive car and provide food for their family.
I think the 999 plan sounds interesting and like the fact you have put your plan out there and can defend it. However, my concern is with eliminating all deductions. Our housing industry is in the toilet and if the deduction for mortgage interest is eliminated, will that discourage home purchases and delay a recovery. Also, if the deductions to charities is eliminated, won’t that severely reduce contributions to worthwhile charities?
Herman: Pls compose three ‘programs’ that
citizens [below middle class, middle class,
and above middle class] canadopt and plan
upon to make the best under 9-9-9: While
trying to apply the 9-9-9 plan to existing
individual and family cases, what can–what
shud–these people do to receive the benefits of 9-9-9? What can a family do to
live a better, more secure life than now?..
Perhaps this ‘proposed strategy for citizens’ can be added to any existing materials you already have which show what
will likely happen to citizens? What oppor-
tunities will arise that allow people to
best take advantage of yopur reforms?..
Aaron Allen…
How would retirees on a “small” fixed income be affected? Food should never be taxed.
It is my understanding that many tax deductions that are now used will be eliminated.i.e. labor costs for example. This seems to me to be a negative job creator.Can you explain the argument or exclusion to this?
Folks, before you bash the 9-9-9 Plan, READ THE ARTICLE.
Two questions:
1. Is the 9% National sales tax in addition to State and Local sales taxes?
2. There have been claims that “Phase 2″ eliminates the income tax, and directly replaces it with a higher national sales tax rate (some articles claim up to 40%). Is this true?
[...] From North Star Writer’s Group comes this response written by Mr. Cain regarding questions and the like about his 9-9-9 Plan. [...]
Upfront, I will say I like Herman Cain personally. But I’m not thrilled with 9-9-9. My main concern is how it’s going to effect lower income people, like me. And how it’s going to increase both my income tax, and then double my sales tax (as a California resident). These are some serious considerations that need to be made.
The taxes of the corporation I work for may go down. So, they may raise my salary, or I may find work at another corporation for a higher salary. But these are not guaranteed, and will take time before those options are available to me.
As I see it, we don’t have a tax/revenue problem, we have a spending problem! Cut the fraud and waste in medicare, reform/privatise Social Security, quit building shopping malls in Iraq, gut the Dept of Edu, EPA, and repeal Obamacare, I’m sure we’ll find lots of money without raising a dime of new taxes.
If after doing this, you feel there’s not enough money from taxes, then institute a fair/flat tax on income. Or, abolish the IRS/income tax all together, go for a national sales tax. But doing both, right away, is a bad move, in my opinion.
I do hope that dropping one of the 9′s comes up in debate, even if it means raising the other two to 12.
Mr. Cain, Your plan is brilliant but frightening to people with less than average knowledge of tax policies and economics. If you want to sell your plan, people will need to see their own numbers compared side by side with both tax systems. I have crunched my own numbers based on my 2010 tax returns and compared them to the 999 calculations. This makes 999 look good. But not everyone can figure out how to calculate their own taxes with both plans. I believe your campaign needs to provide a web site where people can plug in their own numbers and view a comparison of 999 calculations Vs. current tax code calculations. This would sell your plan for you. You have my vote.
It figures the Ron Paul communitty would be surfing the web trying to get the most unelectable man into office… As for the 9-9-9 plan, home run! Sort of a hybrid FairTax / income tax. I dig it. The name makes it resonate among the people and they are singing it’s praises. Herman, bring this fruition and let’s bring the nay sayer’s along kicking and screaming if we have to. They probably don’t want it to pass because they are so used to their “thousand month” unemployment check string that they forgot what an honest days work was. Heck, I’d consider hiring some if I knew the tax code was going to be stable (It would be the first in the country in a long time).
I think what Mr. Gates wrote is spot-on. Most people do not have the wherewithal to do their own calculations to see the changes that 9-9-9 will cause, be it positive or negative. Some sort of web-based calculator with easy to understand fields to populate is a tremendous idea!
I like the 999 Plan and I like it more when it is explained, especially in light of the objections. But there is one objection I have heard that is not addressed here. Michael Medved suggested that the sales tax being only for new goods, not used, will cause there to be an underground market for used goods, where people will obtain new goods and then turn around and sell them as used goods. But the objection is obviously absurd because, how will people obtain new goods other than buy them? (And if they are stealing them, that is a case for the police). So if they are buying them and getting charged for the 9% tax, the only way they can sell them and get a profit is to sell them at a higher price. Unless everybody is stupid, they can’t win doing that.
I like that herman cain has a plan and i like a flat tax but to do way with deductions for chartible donations will hurt hospitals and other good org.that are helped by these donations,and putting a consumption tax on new goods will certianally hurt all industry we could end up in a real pickle so herman please re-think your ideas because this just wont work.
Strangely enough someone worked my numbers with your plan and I LOSE money. I only make $13k a year and break even every month all while not receiving any government assistance. Your supporters claim my employers will pay me more since they won’t have to pay the payroll tax, but they are sadly mistaken. My employers have many other things to use that money on, and it’s not me.
So the claim that this won’t hurt the poor is an outright fabrication. Your own supporters worked the math and found me paying more. No to 999!
I quite like the 1 trillion saved with ███ ████’s plan that he unveiled yesterday.
It is refreshing to hear and see someone who has a plan .Thank You Herman Cain for a least putting something out that has started people thinking about the problems. Most of the other candidates and the present administration are only thinking of ways to gimmick the present system which is great contributor to the present problems. The only detractor visible is the 9% Federal Sales Tax along with state and local taxes the combination would burden the average tax payer even with the income tax load being lighter . Hope that with the 9-9-9 plan there are some wiggle room to help those people who share a lot of the tax burden now without big tax write offs that the Buffets and large corporations(GE) have.
Remember that 9-9-9 is the transition phase to Cain’s Phase 2: The Fair Tax.
With all the talk about the Federal government being confined to the limited powers granted by the Constitution, shouldn’t the first question be: Is any of the 9-9-9 plan within the powers granted to Congress in the Constitution? See The FairTax and the Constitution
Tennessee has 9.25% state sales TAX,now add 9%
NATIONAL sales TAX, that = 18.25% TOTAL SALES TAX. If SOCIAL SECURITY is your only income, than it would seem to me you LOSE! One other thing how many people buy USED? The junk that comes from Foreign countries isn’t even worth buying new, let alone used. I think if people start buying used, jobs will be lost! The auto & housing Industry won,t be too happy!
You have my vote Mr. Cain. Your 9-9-9 is at least a step in a better direction. Obviously it isn’t the best direction, but its a start. I’m all for getting the ball rolling. I hope you are elected sir. You wouldn’t believe how many of my friends and colleague’s support you whole-heartedly. It will also be great to see whiny liberal losers crying because they can no longer call Republican’s racist. If I ever say anything critical about Obama around african american’s or liberal’s the first response is usually “you are racist”. This mentality is ridiculous and I can’t wait to shove it in their faces when you are elected. I truely hope you help us turn this country around. I’m tired of being ashamed of America because of the idiots we elect. There are great people in this country and we need a great leader to follow. Good luck on the campaign trail and if there is anything I can do to get involved and help, please let me know.
Regards.