Mr. Cain’s “Let Them Eat Used Cake” Plan
I am told that in my “Cain’s ‘Simple’ 9-0-9 Plan Variation and ‘Opportunity Zones‘” I was a little tough on Mr. Cain.
So to balance things out, let me review an article that comes — somewhat — to the defense of Mr. Cain and his x-x-x Plan. It is from an unlikely source, TIME’s Fareed Zakaria.
Starting with the premise that “Herman Cain’s “9-9-9” plan isn’t perfect, but it’s less crazy than you might think,” Zakaria laments the “universal scorn from pundits” Cain’s plan has invited and gives a few examples.
While Zakaria claims that Cain’s plan is “sloppy and, in parts, bizarre,” he believes that “the impetus behind it–tax simplification and reform–is not.”
He then discusses each of the three 9s, albeit not in the order of the 9s in Cain’s 9-9-9 formula, which is somewhat confusing.
Zakaria especially likes Cain’s “final 9,” a 9% consumption task, which he calls “a policy wonk’s dream.” One of the reasons Zakaria likes this “consumption tax” is that:
Americans consume too much, often using credit and leverage to do so. A consumption tax would moderate this behavior. Government will always get less of behaviors it taxes and more of what it subsidizes.
Zakaria does not mention Cain’s magnanimous gesture to those poor Americans who under his plan will have to pay a flat 9 percent federal sales tax on top of any existing state sales taxes. Cain suggests that those people will just have to buy used things: used cars, used clothing, used toys for their children etc. In other words, Cain says to the poor, “Let them eat cake–used cake that is.”
Zakaria concludes with his own “flatter,” a bit more complex version of Cain’s 9-9-9 (or 9-0-9) plan and calls it the “the 9-18-27-18-9-50 plan” :
Nine% for the first 90% of Americans, 18% for the next 9% (incomes starting at $150,000) and 27% for the top 1% (incomes starting at about $500,000). I would keep a few straightforward deductions–state and local income taxes and charitable contributions. I would lower the corporate rate to 18% and impose a VAT of 9%. Finally, I would enact a 50% inheritance tax, because nothing is more un-American than an inherited elite that perpetuates itself.
No, Mr. Zakaria, we don’t expect your plan “to catch fire on the campaign trail anytime soon,” just as we don’t expect Mr. Cain’s “simple” plan to catch fire in low-income America anytime soon –or ever.
Graphic, courtesy Dr. Estés