Ryan Streeter
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The number “9” was mentioned 85 times during Tuesday’s debate. That’s because Herman Cain and the other candidates kept bringing up his 9-9-9 plan.
The debate wasn’t even finished before people began speculating that we’d see a whole new level of analysis of the plan this week.
And we have.
In a few short days, the critics seem to outnumber the supporters and have come rather quickly to consensus on why the plan won’t fly.
- Ed Morrissey gives one of the best treatments of the pro’s and con’s of Cain’s plan today. He points out that as much as Cain tries to avoid it, the 9-9-9 plan is almost inescapably regressive. Every analysis seems to hit lower-income households harder (of course, given that nearly half of the country pays no income tax, just about any plan to “broaden the base,” as we Republicans like to say, will hike some taxes on people who don’t pay any now). Morrissey is right about this. Cain will have a hard time staying in front of this issue the way he wants. Morrissey ultimately ends up in the camp that I predict will soon become conservatives’ consensus on Cain’s plan: we should try to jump over the 9-9-9 plan, which Cain says is an intermediate step, to a constitutionally-limited Fair Tax or other flatter plan. Conservatives simply don’t want to be a position of having both an income tax and a sales tax for the simple and probable reality that politicians will never take the next step and remove the income tax.
- At Coffee and Markets, Dan Mitchell makes this point in a podcast today: the underlying economics of the plan are very good: lower marginal rates on productive behavior, eliminating double taxation, and removing loopholes. But from a political economy perspective, 9-9-9 as an intermediate period of time with a sales tax and an income tax creates a toxic environment full of political temptation. Also, the business 9% tax looks like the VATs we see in other countries that tax wages and benefits and therefore effectively tax income twice (Josh Barro highlighted this point, from Bruce Bartlett, a couple days ago). The biggest problem, though, is that 9-9-9 could become 29-29-29. This is also the point Morrissey and others are making. Using the plan as an intermediate step to a Fair Tax seems ultimately like a bad idea. It would be better to do Cain’s step one – cut taxes – and then jump to step three – the Fair Tax – and skip 9-9-9.
- Matt Lewis has said that 9-9-9 is dumb-dumb-dumb because, similar to Mitchell’s point, members of Congress will soon raise it to “11-11-11 — or 14-14-14 — or…”
- Dean Clancy at FreedomWorks lays out the good, bad, and the ugly in the plan. The “ugly” is, once again, when you put the components together, Cain’s plan sets a VAT structure in place.
In the end what seems to be the biggest flaw in Cain’s proposal is simply that he’s touting an intermediate step to a more perfect policy as his main campaign idea. That’s very strange, and seems to be without much historical precedent. Usually, you go after the ideal knowing you’ll have to compromise downward. In this case, he goes with a flawed middle ground in hopes of getting people to agree on the ideal.
This is especially bad for Cain because it makes him look politically naïve. As critics have already pointed out, who really believes that lawmakers would adopt a 9-9-9 plan with the intention of someday adopting a full Fair Tax? Congress cannot even enact spending cuts it passes into law, let alone actually remove the income tax altogether.
Since it is imperfect, as Cain has admitted it is, and given that more and more people will be raising this point about political infeasibility (and perhaps naïveté), it raises the question “why pursue it at all?” If Cain replies, “because it’s the best we can do,” that will begin to disappoint people, and if he says “well, let’s not pursue it after all,” he then flops.
It seems his strategy of pursuing a step rather than a final policy can’t do anything but backfire.
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