Herman Cain - Taxes
Summary
Herman Cain supports lowering the tax rates as much as possible and simplifying the tax code. He supports lowering the corporation tax and capital gains tax rates, and supports ending the estate tax.
In addition to lowering the tax rates where possible, Herman Cain supports ending the IRS, and replacing the income tax code and other taxes with a consumption tax known as the "Fair Tax." The fair tax would place a sales tax around 25% on all sales and end the income tax. This would greatly simplify the tax code, and end the numerous exemptions in place.
Cain has made tax reform one of the central components of his 2012 presidential campaign. He calls his plan the 9-9-9 plan. The first phase of the plan is to move the economy to a 9% personal income tax rate, a 9% tax rate on businesses, and institute a 9% national sales tax rate. The second phase of the plan would be fully installing the "Fair Tax" sales tax system and eliminate the personal income and corporate income taxes. This plan also includes the suspension of taxes on repatriated profits.
2004 Campaign Video
In a video made for his 2004 campaign ad, Mr Cain talks about his desire to end the IRS, and his desire to see the federal tax code scrapped and a new one started.
The $100 Billion Dollar Witch Hunt
In March of 2006, Herman Cain wrote an article discussing the overall concept of direct taxation and it's affects on the economy. He discusses the government's efforts in hunting down tax violators as a witch hunt.
March 8, 2006
End the $100 Billion Witch HuntThe Internal Revenue Service (IRS) claims in a February 2006 report that for every dollar spent chasing unpaid taxes, they can recover about $4 for federal coffers. To close the expected 2005 “tax gap,” the IRS would have to spend $100 billion in an attempt to recover $400 billion. That’s $100 billion of our tax dollars spent to hunt us down for unavoidable errors trying to comply with the tax code.
It’s not enough that many of us have to write checks to the IRS this time of year. Congress wants to write the IRS a bigger check to chase down our unavoidable errors.
U.S. senators from both sides of the aisle are predictably enraged that taxpayers would dare underreport their incomes, and liberal media stories gleefully note that the tax gap could nearly pay off the federal budget deficit. There is a fairer and more inexpensive way for Congress to pay off the deficit – stop overspending. The media’s story angle conveniently avoids the fact that members of Congress – not taxpayers – write the confusing tax laws and authorize all deficit spending.
In response to the IRS report, Senator Charles Grassley (R-IA), chairman of the Senate Finance Committee, vowed to hunt down taxpayers who supposedly abuse the tax code by inflating the value of their charitable contributions and deductions.
Senator Grassley, why don’t we hunt down those in Congress who waste our tax dollars on failed entitlement programs and pork projects? Senator Kent Conrad (D-ND), ranking Democrat on the Senate Budget Committee declared, “It just leaps out at you as one of the most significant opportunities we have.” What should leap out at you is the fact that lawmakers produce deficit spending and the confusing tax code.
Alexander Hamilton, the first Secretary of the Treasury, predicted this would happen. In Federalist Paper Number 12, written in 1787, Hamilton cautioned the negative effects of a system of direct taxation. These effects included perpetual addition of new tax laws, new collection methods and the noncompliance that would necessarily follow. Mr. Hamilton was correct, to the tune of $400 billion today.
Without an income tax code, the federal government cannot as easily monitor our economic activities, and Congress cannot write new tax laws advantageous to their preferred groups. These facts were perhaps no better articulated than by Senator Hillary Clinton (D-NY), who last year stated at a fundraiser, “We’re going to take things away from you on behalf of the common good.” Translation: “We’re going to take more of your money so we can buy more votes.” It is time Congress stopped robbing us of our liberties by taxing our income and our time.
We now have a significant opportunity to replace the confusing income tax code mess with a consumption tax – an opportunity that Congress has squandered. Even Hamilton recognized the advantages of a consumption tax over a direct income tax in Federalist Paper Number 21, also written in 1787,
“The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions.”
Under a consumption tax such as a national sales tax, also called the FairTax (HR 25 and S 25), we would do away forever with automatic withholding, the alternative minimum tax and forced FICA deductions. We would, for the first time since 1913, regain our economic freedom.Following the release of the aforementioned IRS report commissioner Mark Everson stated, “At some point you get to a tradeoff between liberties and closing that gap.” Let’s do both, by replacing the tax code with the FairTax. The $400 billion gap will go away, and our liberties will return.
Support for the Bush Tax Cuts
In March of 2006, Herman Cain wrote an article discussing his support for the Bush tax cuts and his belief that the cuts were largely responsible for the growing economy that followed.
March 29, 2006
Stop Lying About Tax CutsEvery good liberal will tell you that low tax rates cause tax revenues to drop, hurt the economy, benefit only the wealthy and cause skyrocketing budget deficits. A Wall Street Journal article last week blew a hole in those liberal lies. The Journal reported that federal tax revenues for the first five months of fiscal year 2006 are up 10.3 percent from the same period a year ago. The 2006 revenue growth adds to a 15 percent tax revenue increase from 2004 to 2005. This good fortune for U.S. Treasury coffers is attributed to the steady and growing economy, which is largely a product of the 2003 cuts in income, dividend and capital gains tax rates.
The parallel growth in the economy and tax revenues is not a fluke and did not occur by chance. History has shown us that every time tax rates are cut, federal tax revenues rise, the economy responds positively and the wealthy pay a larger share of the tax bill.
Presidents Warren Harding and Calvin Coolidge significantly cut tax rates in the 1920s, which caused both the national economy and federal revenues to grow. Harding repealed the World War I excess profits tax, dropped the top tax rate on individuals from 73 to 58 percent and set the capital gains tax rate at 12.5 percent. Coolidge further reduced individual tax rates and inheritance taxes. The Harding and Coolidge tax rate cuts caused income tax revenues to rise 61 percent from 1921 to 1929. At the same time, the economy grew by 59 percent. Additionally, the share of taxes paid by the wealthiest Americans grew from just over 44 percent in 1921 to over 78 percent by 1928.
President John F. Kennedy introduced a plan in 1963 to lower the highest individual tax rate of 91 to 70 percent, and the top corporate rate from 52 to 48 percent. The Revenue Act of 1964, passed after Kennedy’s death, containted his proposed rate cuts and sparked considerable economic growth. Federal tax revenues rose 68 percent through 1968, and the economy grew 42 percent. The share of tax revenues paid by the wealthiest in the 1960s dwarfed the amounts paid by the middle class and poor. Tax revenues from those individuals making over $50,000 rose by 57 percent following the Kennedy rate cuts, while revenues from those making under $50,000 rose by just 11 percent.
When President Ronald Reagan came to office in 1981, the economy was mired in high interest rates, high unemployment and stagflation produced by policies of the 1970s. Reagan cut the highest individual tax rate in 1981 from 70 to 50 percent, and cut the lowest rate from 14 to 11 percent. In 1986 he further cut the top rate from 50 to 28 percent.
Reagan’s tax rate cuts helped produce the longest period of peacetime economic expansion in U.S. history. Total tax revenues grew by over 99 percent during the 1980s, and the economy grew by an average of 4 percent each year. As we saw in the 1960s, the wealthiest Americans paid the most taxes following Reagan’s rate cuts. The top 10 percent of income earners went from paying 48 percent of all taxes in 1981, to over 57 percent by 1988.
The other lie liberals perpetually tell is that low tax rates cause budget deficits. History proves just the opposite – that cuts in income, capital gains and dividends tax rates increase the amount of federal revenues available for Congress to spend. The only thing that can cause a budget deficit is when Congress spends in excess of available revenues, and the president at the time signs off on that spending. Members of Congress who blame tax cuts for causing deficits might as well argue that gun manufacturers cause homicides, fast food restaurants cause obesity and cigarette makers cause lung cancer. Surely no one would agree with that flawed logic.
Fiscal conservatives who advocate low tax rates, and even complete replacement of the income tax code with a consumption tax, can be assured that they are on the right side of history, and the right side of economic common sense. Liberals of both political parties who decry low tax rates would harm our nation’s economic infrastructure, and the poor and wealthy alike.
Nearly everyone has a chance to succeed in our dynamic economy, provided that government does not confiscate their wealth through the tax code. As former President Abraham Lincoln once stated, “That some should be rich shows that others may become rich and hence is just encouragement to industry and enterprise . . . I don't believe in a law to prevent a man from getting rich; it would do more harm than good.”
Support for Ending the Estate Tax
In July of 2006, Herman Cain wrote an article discussing numerous items that Congress was failing to address. In that article, he expressed his support for ending the estate tax.
Most recently, Senate Republicans have been unable to pass a full repeal of the estate tax, the most immoral tax in the entire tax code. A number of liberal Republicans, including Senator Snowe, have voted against full repeal. While senators continue to debate various compromise plans to eliminate the estate tax for all but the wealthiest Americans, it is doubtful any of them will pass this year.
Fiscal Reality
In March of 2007, Herman Cain wrote an article discussing his views that politicians are using false and creative statements to mask the true fiscal reality.
March 5, 2007
Creative Rhetoric Masks Fiscal Reality
Politicians use words to inspire, cajole and convince people that their particular policy prescriptions are without fault and beneficial to both the least among us and the nation as a whole. Unfortunately, some politicians also use words to deceive people with a rhetorical frequency and intensity that overshadow reality for the uninformed voter.Pundits often analyze a politician’s positions on the most prominent issues as distinct from his vision of sound fiscal policy. The shrewdest of lawmakers, however, seek to blur the distinctions, arguing that their brand of fiscal policy is a sure-fire cure for all of our social ills. The blurred lines are most apparent when the political rhetoric turns to discussion of taxation and government spending.
Examples abound, and politicians are careful to couch their desire for higher tax rates as benefiting some sort of common good. Presidential candidate Sen. Hillary Clinton (D-NY) recently stated that she wants to “take those profits” from oil companies to fund alternative sources of energy. House Ways and Means Committee Chairman Charles Rangel (D-NY) said last week that he wants to “rearrange” tax rates to achieve a more “equitable distribution” of the 2001 and 2003 tax rate cuts. His goal is to “offset” the “cost” of limiting or eliminating the Alternative Minimum Tax, which threatens millions of taxpayers. The website Politico.com reported last week that Democrats plan to pay for $700 million in health care for poor children with “revenue enhancements.”
Taking corporate profits, rearranging tax rates, offsetting tax rate cuts and enhancing revenue are clever rhetorical twists for advocating the same goal – raising tax rates on corporations and individuals deemed most able to pay more taxes.
The tax pushers buttress their arguments not only in terms of all the common good they plan to achieve, but in the “scoring” estimates of tax legislation produced by the Congressional Budget Office (CBO). Since the CBO was created in 1974, one of its duties is to estimate the “cost” of a proposed tax rate increase or decrease. That is, the supposed positive or negative effect of tax rates on the rate’s ability to generate federal revenues. The problem is the CBO uses what is referred to as static, instead of dynamic, scoring methods.
Static scoring estimates merely look at the proposed tax rate change and calculate a corresponding increase or decrease in federal revenues. A static CBO score would estimate, for example, that a 5 percent income tax rate reduction would reduce federal revenues by the same 5 percent. The tax pushers then argue that the 5 percent tax cut will cause a budget deficit. Therefore, Congress can’t possibly pass the tax cut because it “costs” too much and we can’t “pay for it.”
The claim that reductions in tax rates have a “cost” is ultimately an argument that we all work for the federal government. Politicians who decry the alleged cost – in their minds, a reduction in federal revenues – either do not understand the positive economic impact of low tax rates on growing the economy, personal wealth and the federal coffers, or, they want to deceive the public. I think the latter.
At the 2006 Conservative Political Action Conference, Vice President Cheney stated that the 2001 and 2003 tax rate cuts contributed to an historic surge in federal revenues. Cheney was correct. The Heritage Foundation found that capital gains tax revenues doubled following the 2003 rate cut. Tax revenues in 2006 were 18.4 percent of gross domestic product, a percentage that is above the 20-year, 40-year, and 60-year historical averages.
Though Cheney is correct, he is, in fact, making the wrong argument for low tax rates. Supporters of low to zero tax rates on income are not necessarily fans of more taxpayer dollars poured into the congressional trough.
Big government advocates focus the argument on taxation levels and not on federal spending, which is the real root cause of budget deficits. Look at your personal finances. No matter your level of income, if you spend 100 percent of your money and max out your credit cards you have a personal budget deficit. If you spend only that amount of income needed for necessities, you run a personal surplus.
The problem is not in the amount of income, but in the amount of spending. When members of Congress argue that lower income tax rates will cause budget deficits, they are acting disingenuous to say the least.
The entire 20th Century is a testament to the folly of believing that the Marxist philosophy of “from each according to his ability, to each according to his needs” can outgain or outlast a governmental form that pledges to protect individual rights and the pursuit, but not the guarantee, of happiness.
Political rhetoric around the issues of taxation and spending, the two issues from which Congress derives its power, will be with us as long as politicians have to stand for election.
Deceptive rhetoric is a reality, but it can’t distort reality for truly informed voters. We just need more of them.
Fairness in Taxation
In August of 2007, Mr Cain wrote an article discussing how our current tax system is used to encourage contradictory behaviors. He also discussed the inherent unfairness in the system, and how the fair tax would address these issues.
August 20, 2007
A Tax Break for Driving to Work? The Fair Tax Will Fix ThisThere is a little-known deduction in the tax code that 400,000 people know about, and by which they avoid $150 million dollars in taxes each year. The issue is not that most of us do not know about this little sneak-a-tax, or even the amount that the rest of us are picking up through a higher federal deficit.
The issue is that this is another example of how the tax code is used to encourage a desired behavior. The deduction encourages people to drive to work by subsidizing their parking costs. If you do not have to pay for parking at work you get zero deduction. At the same time, the Department of Transportation is planning to spend $354 million to encourage people to not drive to work by subsidizing their mass transit costs.
That’s right! Our tax dollars are working against each other.
This little inconsistent truth was reported in William Neuman’s article on the front page of The New York Times last Thursday, August 16, 2007, titled “Mixed Signals: Driving to work as a Tax Break.”
This is also an example of how sneak-a-taxes and special deductions for a few people at the expense of most of us get in the tax code. This deduction for parking was passed back in the 1980’s when most of us were not paying attention. Since it was so small relative to other changes being made to the tax code, it was not covered by the evening network news programs.
One such other change by Congress in the 1980s was legislation to gradually increase the retirement age for full Social Security benefits. Like most people in their 40s, I was not paying attention to a law that would affect me 20 years later, and would cause my retirement benefits to start at age 66 instead of 65. And for those born after 1960, your retirement age for full benefits is now 67, and it does not stop there as more and more baby boomers file for benefits.
The federal government was never intended to be in the business of encouraging one behavior over another, or favoring one group of people over another. This goes beyond providing assistance to the needy. And government was never intended to be in the business of taking people’s money for a retirement system, and then increasing the retirement age as the money starts to run out.
This is what’s wrong with the tax code along with its unfairness, its complexity and a long list of other anti-free-market and politics-of-envy provisions. The only solution is to replace it, and the Fair Tax is by far the best solution. The Fair Tax – a national consumption tax replacing all existing federal taxes – eliminates all inconsistencies, stimulates economic growth and liberates the poor and the needy. (See fairtax.org for more information.)
But the bureaucrats and career politicians want to keep the current system. The tax code gives them a means by which to encourage certain behaviors, and a means by which they can award tax favors to one group over another. The current system hides a plethora of sneak-a-taxes that may never be exposed.
Individually, these sneak-a-taxes may not add up to much relative to the $3 trillion dollars government spends each year. But collectively, they add up to mortgaging our national future to people who want to destroy us, and literally taxing ourselves into economic oblivion.
These competing tax dollars may seem small to big-hearted liberals, and waiting one or two more years before people can receive full Social Security benefits should be no big deal. It may not be a big deal if government can legislate two more years to a person’s life expectancy.
The insanity and inconsistencies in the tax code are not new revelations, but some of us have got to continue to sound the alarm. That is, until we have leaders who will embrace the will of the people over the will of politics.
That would be a break for all of us.
The Corporate Tax
In July of 2008, Herman Cain wrote an article discussing a number of reasons why America was having economic problems. Within that article, he discusses his support for the lowering the corporate tax rate.
... The leading cause of this foreign invasion of U.S. companies is the differential between the U.S. corporate tax rate and the prevailing corporate tax rate for the invading foreign company. The U.S. corporate tax rate is 40 percent versus a 34 percent rate in Belgium, whereas 12 years ago Belgium was also at 40 percent
In fact, according to the Cato Institute, the United States is the only major developed country out of 30 countries to have not lowered its corporate tax rate in the last 12 years.
The financial attractiveness of U.S. companies is enhanced by our weak dollar, our increasing national debt and the unlikely prospect that a Democratic-controlled Congress will even consider lowering the corporate tax rate, since they have indicated they will raise taxes by doing absolutely nothing to stop the Bush tax cuts from expiring. ...
Intimidation and Taxes
In a May 2009 article, Herman Cain discusses a number of tactics in play by the Obama administration to intimidate people into paying their taxes. He also discusses his support for lowering taxes to repatriate money made overseas.
May 11, 2009
Obama’s Intimidation TaxEight hundred more IRS agents, closing tax loopholes used by U.S. companies that make money in other countries, and calling businesses “tax cheats” for using the messed up tax code as it is written, is going to inspire lots of multinational companies to create more jobs here in the USA.
Not!
This plan, announced by the president and model tax patriot and Treasury Secretary Tim Geithner, will do just the opposite. And that $210 billion they expect to recoup over 10 years will be long forgotten when the money does not materialize.
Economist Dan Mitchell of the Cato Institute described the proposal this way while appearing on the Fox News Channel:
“This is a spectacularly misguided proposal,” Mitchell said. “In a global economy, you don’t saddle your companies with extra costs. No other country in the world does this kind of crazy policy.”
“What Obama’s proposal would do is it would make the double taxation they pay to the IRS even worse,” Mitchell said. “The Germans don’t do that, the Canadians don’t do that. Even the French, who love taxes, don’t do this kind of crazy policy. We are literally shooting our companies in the foot while other countries are making it easier for their companies to compete around the world.”
Liberals who believe in more heavy-handed big government will not like Mitchell’s assessment, but he is absolutely right.
Now here is an old and non-original idea the administration could have used to generate more revenue much faster. Reduce the tax on foreign profits to zero. This would generate approximately $200 billion dollars a year instead of a questionable $21 billion annually.
It worked in 2003, when the tax on repatriated profits was reduced to about 5 percent and generated more than $350 billion in two years. Maybe this was not a consideration because it worked when George W. Bush was president with a Republican-controlled Congress.
Additionally, the administration would not have to hire an additional 800 IRS agents to browbeat more companies who have tried to comply with the laws in the first place. The president’s announced plan is just one more example of using the “bully” in “bully pulpit” to try to intimidate businesses.
Another example was when a bank, TCF in the Twin Cities, wanted to return a TARP loan that it did not want in the first place. The Obama Administration would not accept the repayment under the agreement terms, without the bank making an additional concession.
Or how about the White House threatening to “unleash the full force of the White House press corps” to destroy someone’s reputation if they did not go along with concessions being demanded during the Chrysler bankruptcy negotiations.
Intimidation of businesses will backfire. It might cause a business to take it on the chin once in order to get on with their life, but it will also cause a lot of businesses to move their operations out of the United States altogether.
Incentives in a free market system always work better than intimidation. So far in the Obama Administration, we have seen very little incentives for businesses and a whole lot of intimidation.
As the late Jack Kemp would say, “If you want less of something then tax it. And if you want more of something, then un-tax it.”
U.S. businesses have to compete globally with the second-highest corporate tax rate in the world, a dysfunctional tax code and now a new “intimidation tax”.
There will certainly be a lot less tax revenue, and a lot more resentment.
Neil Cavuto Appearance
On December 24, 2010 Herman Cain appeared on Fox News's Neil Cavuto and spoke about taxes. He noted his support for the fair tax.
National Review Online Interview
In January of 2011, Herman Cain was interviewed by the National Review Online. He stated that he would lower the corporate tax rate, and the capital gains rate.
Let me give you a few examples. One of the first questions I always get when I do one of my talks or Cain coffees or town-hall meetings is, “What would you do about the economy differently?” First of all, make the tax rates permanent, because extending them for two years just extends the uncertainty hanging over this economy for two more years. Secondly, I would ask the Congress to lower the top corporate-tax rate from 35 percent to 25 percent. Why? Because we are the only developed nation in the world that has not lowered its top corporate-tax rate in the last 15 years. The other thing I would do is lower the capital-gains-tax rate, because we punish risk too much in this country. We’re never really going to stimulate the economy in a big way until we do that.
Here’s one piece of low-hanging fruit that just amazes me that Washington doesn’t do it — it’s kind of like a no-brainer. Profits that have been generated overseas by multinational corporations — if they bring those profits back to the United States in the form of repatriated profits, then, in many cases, companies are going to have to pay double taxation. So they leave the money offshore. The last time we had a tax holiday for repatriated profits, back in 2003 under President Bush, nearly $350 billion came back into the country. It’s been estimated that we now have over $800 billion that could come back into our economy.
Bush Tax Cuts
In January of 2011, Mr Cain stated at a campaign event that he would have supported making the Bush tax cuts permanent instead of a 2 year extension, lowering the capital gains tax rate, and lowering the corporate tax rate.
Support for the Fair Tax
During his CPAC speech, Mr. Cain stated his support for the fair tax. That portion of the speech was displayed during a Fox News appearance with Brett Baier.
Nevada News and Views
After the first Presidential debate, Herman Cain was interviewed by the Nevada News and Views and asked about the economy. He notes that he would lower and eliminate a number of taxes as a means to spur the economy and balance the budget.
Reporter: The biggest issue is the economy. Everyone says that they’re going to create more jobs. How are you going to do that?
Cain: First of all let’s start with my five point economic stimulus plan:
1. Lower corporate tax rates from 35 to 25% and bring individual tax rates down to a maximum top rate of 25%.
2. Take capital gains tax rates to zero.
3. Suspend taxes on repatriated properties from foreign investments generated overseas.
4. I would propose a real payroll tax holiday of 6.2%.
5. Make the tax rates permanent.
Fox News Sunday - Fair Tax
On May 22, 2011 Mr Cain appeared on Fox News Sunday and spoke about the Fair Tax and his support for the system. He discusses a Bush administration report that made erroneous assumptions and found the tax rate higher than supporting economists.
WALLACE: And, actually, we talked about this during the South Carolina debate. You say abolish the IRS, abolish the income tax, and replace it with a fair tax.
CAIN: Yes.
WALLACE: A national sales tax of 23 percent.
Now, first of all, according to the way this plan is laid out, people would have to pay a national sales tax on almost every new good or services. You buy a new home.
CAIN: Right.
WALLACE: You a mortgage payment. You pay rent. You've got to pay 23 percent national sales tax. You buy food. You get medical care. You got to pay a 23 percent national sales tax.
CAIN: Right.
WALLACE: Are you OK with that?
CAIN: Of course, because also say this, Chris, every time you describe it -- it replaces all federal income taxes. It replaces the payroll tax. In other words, that 23 percent will collect the same amount of tax revenue from federal income taxes, corporately and personally. It will also collect the amount of money that's being raised through the payroll tax. Such that when a person gets their pay stub, you won't have a federal tax deduction, you won't have a FICA deduction. It will be included the 23 percent you pay.
Now, part two of that, in addition to being a replacement tax, not on top of anything, in addition to that, there is a prebate provision that's collected in the 23 percent, such that every family will get the sales tax on basic necessities as calculated with a formula, before you have to go to the store, before you have to go to the grocery store.
WALLACE: Here's the problem with that. President George W. Bush -- he had a commission on tax reform in 2005.
CAIN: Yes.
WALLACE: They looked at the fair tax. They said it won't work. Here's why they said it won't work -- they said that to create the revenue that you're talking about, it would have to be a 34 percent tax rate. Not 23 percent.
And with the prebates you just talked about, they say it would benefit low and high-income taxpayer. But it would raise taxes. It would raise taxes for the entire middle class -- anyone making between $15,000 and $200,000.CAIN: Chris, they were dead wrong. Here's what happens.
WALLACE: This is President Bush's --
CAIN: I know this is his commission. When I heard the commission make that assessment of the fair tax, I was screaming.
Other people who knew something about the fair tax was screaming. We never got an opportunity to explain.
What they did is that they changed some assumptions in the actual bill. This is why they come up with these outrageous numbers.So, if you change the assumptions of what's in the bill, you have come up with some outrageous numbers like that in order to kill it and defeat it.
Go talk to the people -- talk to former Representative John Linder. If he had been given an opportunity to refute it, he would have said exactly what I said. Talk to Leo Lindhbeck (ph), one of the gentlemen who have to the research on it. There are a lot of people who say -- look, if you do it according to the assumption in the legislation H.R. 25, you don't come up with that. They changed the assumption.
South Carolina Debate
On May 5, 2011 Herman Cain participated in the Republican debate in South Carolina. He is asked about the Fair Tax and it's effects on lower income people.
Reagan Debate
In September of 2011, Herman Cain participated in the Republcian debate at the Reagan Library. He discusses the 9-9-9 plan as fairer than the current system.
HARRIS: The General Electric Corporation last year -- this is a prominent case -- made $14.2 billion in profits worldwide, but paid no U.S. taxes. Perfectly legal, but does it strike you as fair?
CAIN: This is why I proposed my 9-9-9 plan. The government needs to get out of the business of picking winners and losers. The government needs to get out of the business of trying to figure out who gets a tax break here, who gets a tax break there.
When you go to 9-9-9, it levels the playing field for all businesses. What a novel idea. And the government won't be in the business of trying to determine who's going to be able to make more money and pay no taxes and vice versa.
Secondly, this recession is the worst recession since the Great Depression. If the recovery that this administration claims would just tie for last place, we would have another 6 million jobs. If it would tie for the recovery that took place in the '80s under President Reagan, we'd have 12 million more jobs out there, which would be music to the ears of the 14 million people looking for jobs. The president simply does not understand that the business sector is the engine for economic growth.
Fox News / Google Debate
On September 22, 2011 Herman Cain participated in the Fox News / Google debate. He was asked about his 9-9-9 plan and hesitance to create a new revenue stream for the government.
WALLACE: Mr. Cain, I want to follow up on your 999 plan for economic growth. That's a 9 percent...
(APPLAUSE)Well, they seem to already know what it is. But for the few who don't, it's a 9 percent flat corporate tax, a 9 percent flat income tax, and a new 9 percent national sales tax.
Now, conservatives usually say repeal the income tax before you impose a new tax. Isn't there a danger with your 999 plan, with these three taxes, that some government down the road after President Cain is going to increase three forms of taxation on Americans?
HERMAN CAIN, FORMER CEO OF GODFATHER'S PIZZA: No, there's no danger in that. And first, let me answer Dave's question with the 9, 9, 9 plan. Unfortunately, nobody up here answered his question. He wanted to know as a small businessman what are we going to do to help him as a small business person? I have walked in Dave's shoes.
This economy is on life support, that's why my 9, 9, 9 plan is a bold solution. It starts with throw out the current tax code and pass 9 percent business flat tax, 9 percent personal income tax, and the 9% national sales tax. This is the most important part, it eliminates, or replaces corporate income tax, personal income tax, capital gains tax as well as the estate tax.
Then it treats all businesses the same. And the people who are paying only payroll tax, 15.3, that 15.4 they don't have to pay, now they only have to pay that 9 percent.
And unlike Governor Romney's plan my plan throws out the old one.
He's still hooked to the current tax code. That dog won't hunt.
The Western Debate
In October of 2011, Herman Cain participated in the Western Debate in Las Vegas. He spoke about his 9-9-9 plan and stated that tax attorneys, CPAs, and others want a complicated plan. He opposes the idea that it is a value added tax.
COOPER: Mr. Cain, a lot of prominent conservatives now are coming forward saying that your 9-9-9 plan would actually raise taxes on middle-class voters, on lower-income voters.
CAIN: The thing that I would encourage people to do before they engage in this knee-jerk reaction is read our analysis. It is available at hermancain.com. It was performed by Fiscal Associates. And all of the claims that are made against it, it is a jobs plan, it is revenue-neutral, it does not raise taxes on those that are making the least. All of those are simply not true.
The reason that my plan -- the reason that our plan is being attacked so much is because lobbyists, accountants, politicians, they don't want to throw out the current tax code and put in something that's simple and fair. They want to continue to be able to manipulate the American people with a 10-million-word mess.
Let's throw out the 10-million-word mess and put in our plan, which will liberate the American workers and liberate American businesses.
...
COOPER: I'm going to give you 30 seconds to respond. That 84 percent figure comes from the Tax Policy Center.
CAIN: That simply is not true. I invite people to look at our analysis, which we make available.
Secondly, the -- the point that he makes about is a value-added tax -- I'm sorry, Representative Bachmann -- it's not a value-added tax. It's a single tax.
And I invite every American to do their own math, because most of these are knee-jerk reactions. And we do provide a provision, if you read the analysis, something we call opportunity zones that will, in fact, address the issue of those making the least.
COOPER: I want to bring in Congresswoman Bachmann since she was referenced by you.
BACHMANN: But Anderson, how do you not have a value-added tax? Because at every level of production you have a profit, and that profit gets taxed, because you produce one portion at one level, and then you take it to the next supplier or vendor at the next level, and you have an exchange. That is a taxable event.
And ultimately, that becomes a value-added tax. It's a hidden tax. And any time the federal government needs revenue, they dial up the rate and the American people think that it's -- that it is the vendor that creates the tax, but it's the government that creates the tax.
...
COOPER: Mr. Cain, 30 seconds.
(APPLAUSE)
CAIN: This is an example of mixing apples and oranges. The state tax is an apple. We are replacing the current tax code with oranges. So it's not correct to mix apples and oranges.
Secondly, it is not a value-added tax. If you take most of the products -- take a loaf of bread. It does have five taxes in it right now. What the 9 percent does is that we take out those five invisible taxes and replace it with one visible 9 percent.
So you're absolutely wrong. It's not a value-added tax.
Now one other quick thing.
COOPER: Your time's up, I'm sorry.
CAIN: This whole thing about --
COOPER: You'll have another 30 seconds. Trust me, they're going to go --
CAIN: Tonight?
...
COOPER: Mr. Cain, in 30 seconds?
CAIN: Once again, unfortunately, none of my distinguished colleagues who have attacked me up here tonight understand the plan. They're wrong about it being a value-added tax.
We simply remove the hidden taxes that are in goods and services with our plan and replace it with a single rate 9 percent. I invite every family to do your own calculations with that arithmetic.
COOPER: Governor Romney, you have your only 59-point plan. In the last debate, Mr. Cain suggested it was too complicated. Is simpler better?
ROMNEY: Oftentimes simpler is better. And I know we're not supposed the ask each other questions, but if you permit.
Herman, are you saying that the state sales tax will also go away?
CAIN: No, that's an apple.
ROMNEY: OK.
CAIN: We're replacing a bunch of oranges.
ROMNEY: OK.
So, then Governor Perry was right that --
CAIN: No, he wasn't. He was mixing apples and oranges.
2012 Presidential Campaign Website Statements
Chapter Two: Unleash Economic Growth
America has long been a beacon of prosperity throughout the world. The American Dream has been attained by those who were willing to think, work and sacrifice to achieve it. Each dream was different, but each dream was made possible due to the freedoms this country provides. The role of the federal government should be to encourage economic growth by ensuring conditions that will allow businesses to thrive, not just survive. That means less legislation, less regulation, lower taxes and business friendly policies.
The federal government should not be in the business of picking and choosing industries they support financially. This happens in the form of subsidies, and special tax breaks in which the government “plays favorite” with one industry and in turn, hinders the competitiveness of another. There are some exceptions, but in Washington it has become the rule. The federal government also impedes economic growth by interfering in the employer and employee relationship. While labor unions once provided a representative body to lobby for fair wages and safe working conditions for employees, they now principally serve as a political mechanism for the Left. Forced unionization through the dishonestly named “Employee Free Choice Act,” or “card check,” would drive up the costs of goods and services, cause hundreds and thousands of jobs to be lost and ultimately, a more powerful system of liberal fundraising to be maintained.
Currently, the federal government taxes too much and too often. Meaningful tax reform should be implemented immediately to alleviate that suffocating tax burden placed on businesses and individuals in America. This means across-the-board tax cuts to provide long-term relief, including reducing the capital gains tax, suspending taxes on repatriated profits and permanently eliminating the death tax.
References
[1] Website: National Review Online Article: Citizen Cain Author: Jim Geraghty Accessed on: 05/09/2011