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Thursday, October 13, 2011

Putting the middle class out of its misery

Boy, things move fast in the GOP Presidential sweepstakes. Last week we had never heard of Herman Cain -- this week he's a frontrunner?

He's quite a package. He leads his spiel with a screamingly regressive 9% national sales tax and the ever-popular but utterly unworkable "flat tax." Then we look a little further down the résumé and see that he's an ex-chair of a branch of the shadowy Federal Reserve.

Now, that is downright scary.

Comments (34)

Heh, just add a 18% tax on investment income and maybe it might just sorta kinda work. And of course make it like gambling income where the IRS wants to tax winnings but you aren't allowed to deduct losses. (Or at least that is what I have been told.)

I saw something I liked about Mr. Cain last summer and wrote it up for Jim Huffman's site, which I link to here if Jack is amenable.

I think 999 is a bit simplistic; I don't think we should give the 9% sales tax to the government. Beyond that, see Cain as having a place in Romney's administration.

Not that I agree with any of their program but I would bet on a Romney/Cain ticket against Obama.

It certainly would bring some much needed management skills to office.

Well, if your not rich is is Y-O-U-R fault!

Al M you nailed it. That is Mr. Cain's mantra.

"Well, if your not rich is is Y-O-U-R fault!
"That is Mr. Cain's mantra"\

But he never said that and it's not him "mantra".

What is it that propells people to just make up this stuff?

Is there not enough reality to us argue about?

So Cain is the front runner and here comes the caricatuire of him?
The real Cain isn't enough to denigrate?

I happen to like the guy but not all of him or all of his rhetoric.

Uh... sorry Ben. That's exactly what he said. From yahoo news:

"Don't blame Wall Street, don't blame the big banks, if you don't have a job and you're not rich, blame yourself!" he said.

As he is a pretty wealthy guy, he has no interest in how the American version of capitalism has become stacked against anyone in the lower classes. But that's probably the reason he's the republicon front-runner, no?

Cain's tax proposal would dramatically improve the export competitiveness of the US economy and drive huge growth in employment, but why not mock that when we can continue bouncing along progressively taxing the rich, borrowing money we don't have to subsidize the poor and the unemployed and driving the country down the tubes using the tried and true Grecian Formula.

An essential tool to getting the economic ship of state righted is to put the tax code on the side of the economy instead of on the right side of the re-distributive social-justice crowd. Dramatic economic change is needed; Cain is one of the few people thinking out of the box. He is much to be preferred to the economically illiterate, top-down economic manipulator, currently in the Oval Office.

Oh, and Michael, there have been plenty of years where the government required me to limit my capital losses, but they've always insisted on taxing all the capital gains on my 1040.

Gosh does this mean Obama cares more about the poor than Cain?

I'll bet any honest analysis of Cain and Obama's history would show Cain has done far more for the poor than Obama could ever talk or pretend to do.

There is nothing scary about the 999 since a president doesn't dictate and no rush to implement anythiing is possible in this county.

It's too bad for the Republicans that they don't have a decent candidate. This election is theirs to lose, but I'm starting to think they might pull it off.

Jack, does that mean you'd vote for Obama/Biden over Romney/Cain or Cain/Romney, or you wouldn't vote?

Heh! You've got to vote. When we draft you for Mayor your voting record needs to be excellent, not like Smith's.

Come on. People who vote don't necessarily vote every line on the ballot.

"It's too bad for the Republicans that they don't have a decent candidate."

I've heard that ever single election.

I'm surprised the anti Cain thing came out so quick.

What's wrong with a non-politician fair minded experienced adult moderate Republican being president.

There isn't an extreme thing about him.
Other than not being anywhere near the Sam Adams left wing.
But who cares?

Thje Republicans have a pretty full spectrum of candidates.

Honestly I wonder who satisfies the Democrats?

Cain is showing that most Democrats think any Republican is worse than the worst Democrat (Wu).

Obama is a flop. That is certain.

I'm leaning Cainward primariloy because he is not a politician and is far more likely to avoid the stench of politics than anyone else.

I'd call all you Cain haters racists but that's just SOoo 2008...

Ben, does Herman Cain, to use Rich Lowry's comment about Sarah Palin in the last election cycle, engender a "thrill running down my leg"? Just curious, you know.

Herman Cain, as a businessman with a real resume, including experience with the federal reserve, is almost as scary as a president limited to having his private sector resume as a Baskin Robbins soda jerk prior to entering public office. LOL.

And pull it off they well might. If they don't stop dancing around with the fling of the month and solidify around Romney. I like Bachmann, but not in that way. I never bought Perry, and was borne out in my estimation. Cain has made himself a political celebrity at least, and may earn a place in a Romney administration. Newt's the smart guy, too cerebral for the top slot on this side of the aisle. Plus there's that awful Tiffany account.

I sometimes wonder if the real reason Christie and Palin dropped out is because the insider bet is that Obama will prevail--despite the gloom and doom--and they're young enough for 2016.

Some say a Romney run is McCain redux. I admire John McCain, I pay attention to John McCain, I voted for John McCain.

But Romney is no McCain, he can win, and they better figure it out quick.


The "thrill running down the leg" measurement is what got Obama elected.

I liked Trump's interview today concerning Cain. He essentially said that Cain had mucho more business experience than Obama-Obama's only experience was buying a house, period. Then he qualified that experience by mentioning the dubious, favoritism of the loan transaction to borrow the money for it.

I'd enjoy an Obama/Cain debate. Or even a Hillary/Cain debate.

Oh, and the Obama or Hillary/Cain debates would be 10 minutes to answer a question from both Obama or Hillary and 1 minute for Cain.

Say what you want about the 9-9-9 tax proposal; but it would certainly be better than the 70,000+ pages of the current tax code. It might also be the end of the tax preparation industry as we know it...

Yeah sure, much better to vote for a guy who's run $1.5 trillion deficits and hired a Fed Chairman and appointed Fed Governors to monetize that debt, than it would be to vote for fellow who engaged the real economy while serving one of the Fed's regional operations.

How much do you suppose those Clark County maryjane growers would have contributed to the economy if there were a nine percent consumption tax?

Yeah, let's go with tax policy straight out of a video game:

Cain himself has said his 9-9-9 plan is revenue neutral. It reduces the tax burden on corporations and the very wealthy. That pretty much leaves it up to the rest of us to make up the difference.

Cain is a complete fake and a joke. He is being propped up by the ruling class to stop the surge by Ron Paul.

The polls are beyond fake.

I would think the straight forward simplicity of a video game, assuming that everyone who plays it, understands it, would beat the heck out of our present taxing system which no one seems to understand.

Ron Paul is 97 years old. If he was going to surge he would have done it by now. Cain is being semi-supported by Romney as a buffer against Perry. Romney can't get more that 25-28 percent of the vote so he needs to keep multiple candidates going rather than letting the rest consolidate against him. And for the record I like Ron Paul, but he's not going to surge.

"A former chief of staff of the nonpartisan Joint Committee on Taxation calls Herman Cain’s 9-9-9 plan 'a terrific example of fiscal hocus pocus' that would have the effect of 'drastically increasing taxes on the working poor and middle class.' Edward Kleinbard, now a professor of law at the University of Southern California’s Gould School of Law, published a research paper through the university on Oct. 12. It is so far the most detailed look at the 9-9-9 plan by any independent tax expert, and it will provide ammunition for both liberal and conservative critics."

"Kleinbard figures that a family of four earning $120,000 would pay (directly or indirectly) $800 more in federal taxes under Cain’s plan than under current law. At lower income levels the increase in percentage terms would be even higher, and at low wage levels it would be 'dramatic.'

One note of caution: Kleinbard has recently testified before the Senate Finance Committee that the U.S. has 'no practical choice' but to raise taxes back to levels of the 1990s, at least until entitlement spending can be reined in. He said he favors allowing the Bush tax cuts on individuals to expire next year and imposing a new top rate in the range of 42 to 44 percent on incomes over $2 million. He also contributed $5,250 to Democratic candidates and party committees between 1989 and 2006 (and none to Republicans) when he was a partner in the New York law firm of Cleary, Gottlieb, Steen & Hamilton prior to joining the JCT staff in 2007. Whether any of that colors his analysis of Cain’s plan, we will leave to our readers’ judgment.

The JCT is a House-Senate committee upon which Congress relies for professional analysis of the effects of proposed changes to the tax system. Its staff is not divided into Republican and Democratic factions, and (like that of the Congressional Budget Office) is nonpartisan."

"Republican presidential candidate Herman Cain admitted Sunday that 'some people' would pay more in taxes every year under his '9-9-9' tax reform plan.

'That’s right. Some people will pay more,' Cain told David Gregory of NBC’s Meet the Press. 'But most people will pay less, that’s my argument.'

Cain’s plan throws out the current tax system by establishing a 9 percent corporate tax, a 9 percent income tax and a new 9 percent national sales tax. During a lengthy discussion with Gregory, Cain defended his plan from critics who say the plan will make lower income earners pay more.

Asked by Gregory who will pay more, Cain said, 'The people who spend more money on new goods. The sales tax only applies to people who buy new goods, not used goods. That’s a big difference that doesn’t come out.'"

Menefree: Wasn't it refreshing to hear Cain answer 30 questions it the time that many politicians or bureaucrats could only answer 5?

Even if you disagree with some of Cains positions, it was a refreshing interview. Now sock it to me.

lw: There isn't much about Mr Cain that is novel or refreshing. Another tool:

"IOWA CITY, Iowa — Republican presidential hopeful Herman Cain has cast himself as the outsider, the pizza magnate with real-world experience who will bring fresh ideas to the nation’s capital. But Cain’s economic ideas, support and organization have close ties to two billionaire brothers who bankroll right-leaning causes through their group Americans for Prosperity."


"AFP tapped Cain as the public face of its 'Prosperity Expansion Project,' and he traveled the country in 2005 and 2006 speaking to activists who were starting state-based AFP chapters from Wisconsin to Virginia."

From The Atlantic's take on the AP piece:

"Cain's close ties to the Koch brothers seem unlikely to hurt him with Republican primary voters. Those voters certainly have not been eager to turn on the Kochs, even as they have come to take the place of previous conservative benefactors (think Richard Mellon Scaife) in the pantheon of influential people loathed by Democrats. The AP wonders if the connection to the Kochs might tarnish Cain's cherished status as the outsider in the Republican field — the fed-up businessman just trying to talk some sense into his competitors."

I'm not a fan of chain pizza product.

Ha! I like this Cain guy. He's fun. That's about all I can hope for anymore from my candidates. Entertainment. With the way elections are just auctions you can't really hope for any real solutions or progress. No matter what happens with these Occupy dudes. So I just hope for entertainment. Fingers crossed.

Ha! Menefree, now were down to Acorn vs Koch or who else, to determine who we might consider. Keep the lists coming. Tit for Tat.

Re: "now were [sic] down to Acorn vs Koch or who else"


Actually, the GOPer guys and gal are providing their own deconstructions of one another's sloganeering. Consider this long excerpt from a descendant organization of the Annenberg empire:

"Cain’s Tax Plan

Santorum said a new analysis shows Cain’s plan would increase taxes for a large majority of Americans, which Cain denied.

Santorum: Herman’s well-meaning, and I love his boldness, and it’s great. But the fact of the matter is, I mean, reports are now out that 84 percent of Americans would pay more taxes under his plan. That’s the analysis. …

Cain said that 'simply is not true.' He also said his plan 'does not raise taxes on those that are making the least.'

But Santorum is correct. An analysis posted a few hours before the debate by the nonpartisan Tax Policy Center concluded that Cain’s 9-9-9 plan (for 9 percent flat taxes on personal incomes, business transactions and retail sales of goods and services) would result in tax increases for 83.8 percent of all individuals and families, compared with what they would pay under current tax policy. Taxes would decrease for those making over $200,000 a year, with those making over $1 million a year paying 15 percent less in taxes than under current policy (which assumes the Bush tax cuts are extended). As for those 'making the least,' the TPC analysis — which is based on a computer model of the tax system similar to the models used by the Treasury Department and the congressional Joint Committee on Taxation — concludes that those making less than $10,000 a year would see an average tax increase of $1,122, and those making between $10,000 and $20,000 would see taxes go up an average of $2,705.

The Tax Policy Center analysis is the most extensive and sophisticated yet attempted by any independent group. It concludes that 'the three taxes combined are equivalent to a 25.38 percent national sales tax,' which is a conclusion very close to one reached earlier by a former chief of staff of the Joint Committee on Taxation, Edward Kleinbard, who found Cain’s three taxes would have the same effect as a 27 percent tax on wage income, and would 'raise the tax burden on many low- and middle-income taxpayers.'

Cain invited viewers to 'read our analysis' on, but that was easier said than done. We found no analysis on his website at first, only the sketchy and incomplete description that had been there for weeks. A link to a 'scoring report' appeared later, midway through the debate. But when we attempted to access it, we were greeted with a message saying 'service temporarily unavailable … please try again later.'

Value Added?

Santorum and Bachmann both contended — and Cain denied — that his proposed 9 percent tax on business transactions amounted to a 'value-added' tax. A VAT is used in European countries and is ultimately borne by consumers in the form of higher prices, like a hidden sales tax.

Bachmann: [A]t every level of production you have a profit, and that profit gets taxed. … And ultimately, that becomes a value-added tax. It’s a hidden tax. …

Santorum: [Y]ou have a sales tax and an income tax and, as Michele said, a value-added tax, which is really what his corporate tax is. …

Cain: [Y]ou’re absolutely wrong. It’s not a value-added tax.

Actually, Cain’s own website says he would replace the corporate income tax with a '9% Business Flat Tax' that would fall on 'Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports.' The Tax Policy Center concluded that this describes 'a subtraction method value-added tax, sometimes called a business transfer tax (BTT).' So we score this one for Bachmann and Santorum. Whatever Cain wants to call it, his tax looks like a VAT and functions like a VAT.

For the record, the earlier analysis by Kleinbard, now a professor of law at the University of Southern California, takes a different view. He says the 9 percent business flat tax 'operates in economic substance as just another wage tax,' like the employer’s share of Social Security and Medicare taxes. But whether the tax pushes down wages (as payroll taxes do) or pushes up prices (like a VAT), the effect is pretty much the same — a regressive levy that burdens low- and middle-income wage earners relatively more than affluent investors."


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