With Palin, Ryan, Rubio and Christie all declining to throw their hats into the Republican Presidential ring, Herman Cain appears to be the big winner. Currently, the top three candidates are Rick Perry, Mitt Romney and Herman Cain and while Perry figured to garner the lion’s share of Tea Party support, his missteps in the last two debates as well as plenty of smear from the Left here and here, have left the Tea Party shaking their heads and awaiting another candidate to enter. With the aforementioned people declining to enter, Herman Cain appears to be the recipient of all the Tea Party love.
Herman Cain started to get more attention with his 999 plan and then built on that momentum by a strong showing in the Florida debate and winning the Florida Straw Poll. Now the spotlight will be much brighter on Cain and the Left will start their attacks. His lack of political experience is both a negative and a positive but with regard to the Left Main Stream Media that is a positive because there are no voting records or policy initiatives that can be debated so that area is off the table. He has nothing but success in the business world so the Left will be monitoring his words carefully to see if there is any minutia that they can sink their teeth into.
Part of Cain’s appeal lies in the details that he has proposed with his 999 plan. Other candidates have not been able to provide these details or, in the case of Romney, provided a 160 page plan that was so complex that it can’t be articulated in a debate forum. I have yet to see detailed evaluation of the 999 plan to see what that would mean with regard to tax revenue and what this would mean to lower, middle and upper class tax payers but I’m sure as the weeks go on there will be plenty of analysis for us to digest.
The 999 plan is basically the first step to a Flat Tax plan which promises to simplify the tax code and eliminate the IRS almost entirely. Basically, the 999 plan claims to set Corporation tax rates, Personal income tax rates and National Sales taxes at 9%. I’ll step through the high view of each of these three components below.
Corporate tax rates would be lowered from basically 35% now to 9% and this would have a huge benefit for corporations and working Americans. One of the main reasons for companies to move manufacturing to a foreign country is due to these high corporate taxes so with lower tax rates the incentive to move to low cost manufacturing would be almost eliminated (there is still labor rates which would also incentivize companies to move out of the US). Current personal income tax rates are progressive and are based on income and they vary from basically 0% (for those with incomes less than $30,000 per year) to 35% for the highest income earners. The 999 plan would make everyone’s’ tax percentage 9% and while I can’t find specifics on this, the tax on lower income earners should still be close to 0% since a tax on those income demographics cuts into a larger percentage of their required expenditures (food, gas, utilities, etc.). Since people would have more “take-home” money, this would spur consumer spending which is lacking in our current economic malaise. To make up for this tax revenue shortfalls, the last part of the 999 plan would institute a 9% national sales tax. Sales taxes are the most fair of all taxes because this would eliminate loopholes for the wealthy. The super wealthy in America don’t pay a high tax rate because they make most of their money from investments which are taxed at 15% but they do buy cars, boats and other luxury items and the national sales tax would level the playing field. No details are given but I’d assume that items such as food and gas are exempt from this national sales tax. This plan would have to be phased in, as Cain’s website explains, so that the economy would have to recover and unemployment drop so that more people are employed and a more Americans are earning a good wage so that the poor and middle class aren’t punished by this national sales tax.
Again, the details need to be worked out before I embrace this fully, but on a high level this seems like a great plan to rescue our economy, restore the principles of the Free Market, increase manufacturing in the US and make our products more competitive on the World stage. Cain is the front runner now and it is up to him to earn that moniker.