Cain-Cain-Cain
I don’t know why I sometimes torture myself by watching Meet The Press. And I really don’t why I’m about to devote an entire blog post to GOP presidential candidate Herman Cain. But I do. And I am.
Last week, host David Gregory interviewed Cain at the top of the show (transcript/video), a reflection of Cain’s sudden rise to top of the Republican primary polls. Cain’s popularity is something that I kind of get and don’t get at the same time. He has this sort of folksy, no-nonsense persona, whereby he equates supposed simplicity with self-evident quality and cites his own political inexperience as some great qualification that will lead him to succeed in politics. Makes a lot of sense, I know.
Gregory began the interview with a discussion of the superficially simple cornerstone of Cain’s campaign: the gimmicky 9-9-9 tax plan. This plan would replace all current federal taxes with three flat rates: 9% national sales tax; 9% business tax; and 9% individual income tax.
I didn’t have the will to make it much further than the 9-9-9 portion of the interview, frustrated as I was by Cain’s flippant answers and Gregory’s apparent inability / lack of will to conjure up smart follow-up questions / stronger challenges to Cain’s dubious points. But the part that really got me reeling was when Gregory asked Cain how he could get such a big tax reform passed. Here’s Cain’s initial response:
…here’s how we get it passed. First, throw out the current tax code. Secondly, because the American people understand it, the American people are embracing it. See, this is the problem that some people inside Washington have with 9-9-9. The American people understand it. The American people are embracing it such that when I have this legislation–ask Congress to introduce this legislation, the American people will understand it, and they are going to demand it. That’s how we get it passed.
Gee, who knew politics could be so neat and simple? Bear in mind what Cain is talking about here. He wants to not only throw out the current tax code, but then overhaul the tax system not once, but twice. First with the 9-9-9 plan and then later replace that with the Fair Tax. No big deal, right?
What gets me even more is the nice sounding throwaway line, “The American people understand it…are embracing it.” Really? Do they really understand it? A lot of clever people have been digging into what little details there are of this plan, and are still coming up with question marks and wait-and-sees over exactly how it would work.
Consider the business tax, for example. Do “the American people” know that several analysts, left, right, and in-between, have concluded that the business tax is less like the current corporate income tax and more like a modified value-added tax (VAT)? Do the people know exactly what a VAT is and how it functions? This is a kind of consumption tax, by the way, that Cain himself denounced as “the cowardly tax” just six months ago.
Do the American people know that many analysts, after concluding that the 9% business tax is a consumption tax not very unlike the national sales tax, now simply combine the two as an 18% consumption tax that will ultimately hit the end user and/or wage earner?
Do the American people know that this is what Cain wrote regarding a VAT back in April?
[A VAT] taxes each phase in the development of a product or service until it is ultimately sold to the end user, and you also pay any applicable retail sales taxes. These intermediate taxes are passed along to the consumer and are reflected as a net increase in the price of the goods or service.
The doubly outrageous aspect of the VAT is that it is on top of all the other state and federal taxes we pay.
Yet, when David Gregory pointed out to Cain that his national sales tax, combined with state and local sales taxes (where applicable) would have people paying as much as 17% tax or more on goods (19% where I live), Cain just waved away the concern; “That is muddying the water”, he said.
Do the American people know that all of this is just a transitional step to the Fair Tax, something I don’t think I’ve heard Cain directly say? Do they understand and support the Fair Tax, a national retail sales tax at a rate of 30% (or 23%, depending on whom you ask)? Cain doesn’t seem to take that for granted. The page for his plan on his website, under “Phase 2 – The Fair Tax”, reads:
Amidst a backdrop of the economic renewal created by the 9-9-9 Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.
I don’t mean to sound condescending. I only have a very loose grasp on all this stuff myself, even after digging into it over the last couple days. And that’s kind of the point. This supposedly simple, easy to understand 9-9-9 plan really isn’t so simple and clear at all. It kind of feels like Cain is making a lot of this up as he goes along too.
But hey, it is catchy and easy to remember. If this whole presidential gig doesn’t pan out, Cain could probably make some pretty mean infomercials. Just think of all the great little gadgets one might want to buy in quantities of 9 for 9 easy payments of $9.99.
