In case you had any doubt, Herman Cain's 9-9-9 plan is loony tunes

Boy, talk about dumbing down - all it takes is an idiotic slogan and the guy is near or at the top of the weird and scary Republican campaign for president. Cain's plan is a 9 percent corporate income tax, a 9 percent consumption tax, and a 9 percent cross-the-board personal income tax. Everybody kind of laughed it off for much of the summer, but with Cain's meteoric rise in the polls it's time to peel this baby open. And let me tell you, it's not pretty. From the NYT's Timothy Egan:

By almost any measure -- social, political, economic, logical -- Herman Cain's 9-9-9 tax plan is nuts, nuts, nuts. Go ahead and jack up the price of nearly everything that moves in the United States with a 9 percent national sales tax on all new purchases and services. Talk about instant branding: every time you buy something, you'll be hit with the Herm Cain tax at the checkout line.

From the Washington Post's Ezra Klein:

It's fairly well understood that in our current tax system, the income tax is progressive, in that the rich pay more and the poor pay less, and the payroll tax is regressive. Cain's system is that system on steroids: There's no longer a progressive income tax; all there is is a regressive payroll tax. A huge regressive payroll tax. "The 9-9-9 Plan would mean a huge tax hike for the working poor and middle class," writes Kleinbard. Bruce Bartlett makes it even more straightforward: "The 47 percent of tax filers who now pay no federal income taxes will pay 9 percent on their total income," not to mention another 18 percent on the goods they purchase.

The 18 percent covers the sales tax and the corporate tax, which is more of a value-added tax. Add to that the state and local taxes - currently running around 10 percent - and you're left with a nearly 30 percent tax on goods and services. So why on earth are we even talking about this? More from Egan:

[Cain is] a motivational speaker, and a good one. He's glib, optimistic, likable, and has a great personal story. But he has zero governing experience. And his business forte was running a national food chain, Godfather's, when they made truly awful-tasting pizzas. (I'm giving them the benefit of the doubt on their post-Cain pizzas.) Cain tops the polls because almost three-quarters of Republican primary voters cannot come around to their likely nominee, Mitt Romney. And the rest of the field lose voters every time they open their mouths.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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