John Rossomando
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Presidential candidate Herman Cain’s 9-9-9 plan could do a useful service as a starting point for a spirited debate over tax reform. It’s one well worth having at a time when regular unemployment stands around 9 percent and underemployment and underemployment hovers around 16.9 percent, according to Gallup.
Paul Ryan called the plan “specific and credible” earlier this week and said that it remains to debate the specifics of tax reform. But he went on to say it could have an influence on what might come into being in 2013 should Republicans carry Congress and the White House.
He’s right. Creative solutions frequently breed even more creative solutions. Even if the 9-9-9 plan is only a concept, it could have the effect of getting people talking about fixing the tax code.
The plan’s suggestion for a 9 percent national sales tax likely could be its undoing because it would hurt the poor especially in states like New York with high state and local sales taxes.
Club for Growth President Chris Chocola told Newsmax:
“Eliminating taxes on capital gains and dividends and combining that with huge rate cuts in both corporate and income taxes would create an unparalleled economic boom. 9-9-9 also eliminates the regulatory and compliance costs from the current tax code that suck billions out of the economy each year.”
Former Reagan OMB official and noted talk show host Lawrence Kudlow writes in National Review Online:
“In essence, the Cain plan combines the flat tax (with its single marginal rate) and the fair tax (which uses the national sales tax). I don’t know if this is really possible. But in terms of first principles, throwing out the tax code, lowering marginal tax rates, getting rid of the carve-outs and deductions that make the current code impossible to understand, and providing an economic-growth tonic to heal our current funk, it makes a lot of sense.”
In the past 50 years, drastic tax reductions have spurred far more growth than periods of Keynesian make-work jobs spending, so it is worth examining any potentially credible tax proposal.
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