Will 9-9-9 work?

F

FridayNiteLites

500+ Posts
Herman Cain has his 9-9-9 plan, and I've looked for specific info to see if any group, non-partial of course, has scored his proposal to see if it would work. Any of you econ guys out there care to share thoughts on the good, the bad, or ugly of it?
 
Anyone? I have yet to see anything in print or media either praising or blasting the plan with specifics on if it would work, or if it won't work. WSJ had a great article about Cain, but nothing specific about the plan.
 
The Washington Times looked at the revenue side of it,The Link According to them, with the current economy, it would generate about 1.8 trillion, which is short of current revenue and well short of closing the budget deficit -- even with significant cuts. The Washington Times further claims that the economic growth generated by the plan would get the revenue to 2.17 trillion -- in line with current revenue. But current revenue is shrunken due to the recent recession and slow recovery, so if all it can come up with is 2.17 trillion with projections of strong growth, then it will be inadequate revenue wise. Though we must consider this isn't based on rough estimates and projections, not proper analysis.

Based on what I've seen, while the 9-9-9 works for a good slogan, it would not work as good policy due to its revenue shortcomings. It would also make for a highly regressive individual tax structure, which makes it unreasonable for me.
 
People want simple answers to complex questions, so yes it might work-to get someone elected. No, it wouldn't work otherwise, not in the real world.
 
I liked Cain until he put out the 9 - 9 - 9 plan. For me a national sales tax is the best way for the government to raise revenue. However, before I'd support it, it would have to be coupled with a repeal of the 16th Amendment. In fact, it really should be coupled with an express constitutional ban on an income tax. (The Supreme Court decisions that prohibited a national income tax as we know it today were rendered before legal scholars viewed the Constitution as a "living document." Modern scholars would probably "interpret away" the former constitutional protections against the current income tax system.)

If Cain gets elected and enacts 9 - 9 - 9, then in 20 years, we'll have a high national income tax and a high national sales tax. Worst of both worlds.
 
We need an asset tax with a $5 million exemption. A sales tax is way too regressive and an income tax is almost as bad.
 
Cain was on Fox News with Chris Wallace yesterday and explained his plan. He was asked the question about what would happen after he was out of office and the rates began to rise again. He stated that in order to change the 9-9-9 plan it would need a super majority of both houses to raise it. I suppose that would be some protection against raising rates. He went on to explain how it would work and how much money people would have left over if it was put into effect. It made sense to me.
 
The best thing that a sales tax would do is tax the "underground" economy...i.e. the folks who deal exclusively in cash in order to avoid taxes (or do so because they're doing illegal things).

The only way to avoid it for them would be to not buy stuff - but that's why they want the money - to buy stuff. So, the local drug dealer who currently pays no taxes would all of a sudden help fund the government. So, would that lawn guy that you pay under the table...
 
we simply need to cut spending. This one is so simple. We cannot tax to get another 1.5 trillion to cover obama's deficits. Not even at a 100% rate. our economy simply isn't big enough. spending is all that matters.
 
I like the idea. But I also like this Toles cartooon.

toles10052011.jpg
 
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