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Jewish World Review Oct 4, 2011 / 7 Tishrei, 5772 Cain's 9-9-9 plan sounds good, but will it work? By Byron York http://www.JewishWorldReview.com | Herman Cain's supporters know their part by heart. On the campaign trail, at the point in Cain's stump speech when he begins to discuss his plan for economic growth, they're always ready to join the chorus: "Nine! Nine! Nine!" They're referring, of course, to the Republican presidential candidate's proposal to throw out today's tax structure and replace it with a 9 percent income tax, a 9 percent business tax and a 9 percent national sales tax. Cain would eliminate capital gains taxes, the payroll tax and the estate tax. For Cain, a Georgia businessman, 9-9-9 is a perfect platform. It's specific, but it doesn't bury people in details, like Mitt Romney's 59-point, 160-page plan. And it's not a vague promise like Rick Perry's look-what-I-did-in-Texas position. To a lot of voters, 9-9-9 is an enormously appealing proposal that is easy to grasp. It's audacious, too. "I had a kind of pivotal moment in this," says Rich Lowrie, the head of an investment firm in Cleveland who serves as Cain's top economic adviser. "I was with Mr. Cain and I asked him, 'How bold do you want to be?' and he leaned toward me with his big, booming voice and said, 'BOLD.'" So bold it was. But is 9-9-9, for all its boldness, a good idea? I talked with a number of conservative economic policy experts who don't want to take sides in the campaign and thus asked to remain anonymous. They found some important things to like in 9-9-9. They favor its low rates, and they like its elimination of various types of double taxation. Most agree it would stimulate growth and create jobs, at least in the short run. But they have two serious objections. The first is that 9-9-9 might not raise enough money to fund the government even if it creates growth and federal spending is reduced. Over the years, the government has taken in tax revenues equal to about 18 percent of gross domestic product. "I'd be surprised if 9-9-9 raises as much money as current policy," says one expert. "I'd be really surprised if it raises 18 percent of GDP." Cain's advisers have put together a detailed analysis, or score, to argue that 9-9-9 would be "revenue neutral," that is, it would raise the same amount as today's system. "We used 2008 as our baseline, and not accounting for any growth effect, it would have generated to the penny the same revenue," says Lowrie. So far, though, the numbers have not been crunched by many experts outside the campaign. The second objection is that 9-9-9 would add a national sales tax on top of current income and business taxes, and would thus give Congress another tax to raise. Why couldn't 9-9-9 become 12-12-12? Or 15-15-15? The rates would still seem fairly low. "In the long run it leaves the door open for politicians with the wrong motives to push it upwards, and then we're stuck with something worse than what we had before," says a second expert. "All taxes over time tend to rise to their highest sustainable point," says a third expert. "So one of the general things you don't want to do, if you're concerned about limiting the size of government, is to introduce a whole new type of tax on top of the current structure." Lowrie rejects the argument. First, he points out that 9-9-9 would eliminate some major taxes, like the payroll tax. As for the sales tax, he argues that some politicians will always want to raise taxes, and "I don't think they would be any more likely to raise this." Finally, he believes that citizens' movements like the tea party will keep up the pressure against tax increases. Still, the fact remains that under 9-9-9, there would be a new tax on top of existing taxes. Recently Cain's team came to Washington to explain the plan to conservative economic analysts at Americans for Tax Reform, Club for Growth and other institutions. Those experts are starting from scratch; they haven't really seen anything like Cain's plan before. And for all the problems they have with it -- they're also flummoxed by Cain's inclusion of "empowerment zones" for inner cities -- they still admire Cain for trying to find a new solution to today's problems. "It's not an entirely coherent set of proposals," says a fourth expert. "I do worry about the end game. But I hate to rain on it because there's no perfect tax system in the world, and this is another person stirring the tax reform debate, and that's a good debate to have." Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Comment on Byron York's column by clicking here. Previously: 09/27/11 Media bias 101 09/20/11 Obama plagued by Dems' ingratitude 09/13/11 Will immigration cripple Perry's bid? 09/06/11 Left paints the campaign as a religious war 08/30/11 Keep your health plan? Don't count on it 08/24/11 GOP operatives fear lasting Ron Paul problem 08/16/11 Michele Bachmann and the ‘submissive’ question 08/09/11 Obama partisans ignore facts when bashing Bush 08/02/11 When partisans fling charges of partisanship 07/26/11 Obama could be comeback kid if he heeds Clinton's lessons 07/19/11 Book casts doubt on Obama healthcare story 07/12/11 Controversial budget law begins to pay off 07/04/11 Anti-Mormon bias persists, notably among Dems 06/27/11 Huntsman tries McCain model, but he's no John McCain 06/06/11 Amid media circus, Palin lays out policy positions 05/30/11 GOP condemns Dems' ‘breathtaking’ refusal to produce budget 05/24/11 Eye-for-an-eye filibuster stops Democratic nominee 05/17/11 Amid RomneyCare fight, voters ask: Where's Mitt? 05/10/11 Bin Laden coup won't help Obama in budget fight 05/09/11 Inside the GOP debate: Pawlenty underwhelms, Cain struggles, Santorum scores 05/02/11 Huckabee decision will shape GOP presidential race 04/27/11 Get ready for game of chicken over debt ceiling 04/25/11 McCain: Libyan rebels seek U.S. recognition, might pay for war costs 04/18/11 Have the U.S. and NATO given up on Libya mess? 04/11/11 Reforming entitlements is key to a strong military 04/05/11 Jihadis Who Killed Americans Get U.S. Support in Libya 04/04/11 Unions deploy money and muscle in Battle of Wisconsin 03/30/11 Labor fight in Wisconsin is far from over 03/28/11 Obama fails to grasp the gravity of going to war 03/21/11 Union equates lavish benefits to black civil rights 03/15/11 GOP should heed lesson of 1991: No guts, no glory 03/14/11 GOP focuses on NPR's subsidies, not its politics 03/08/11 While Obama seeks new ideas, his bureaucrats stifle them 02/28/11 Why the GOP shouldn't fear a government shutdown 02/22/11 In Hawaii, a dispiriting glimpse of one-party rule 02/21/11 Obama team uses slippery words to tout budget 02/15/11 Myth and memory: The battle over Reagan's legacy 02/07/11 Invoking Reagan, Palin says ‘this is a time for choosing again’ 01/31/11 With each passing year, Reagan grows larger in the American political imagination 01/24/11 House GOP begins long drive to dismantle Obamacare 01/17/11 GOP gears up again to strip NPR of federal funds 01/10/11 To House GOP, illegal immigration is a jobs issue 01/03/11 Obamacare mess is legacy of Dems' moment of power 12/27/10 Smiling Dems will soon cry ‘Washington is broken’ 12/20/10 Dems are earmark junkies but GOP goes straight 12/13/10 Needed: A ‘more presidential’ Palin 12/06/10 With Dems in a funk, Obama charts a new course 11/29/10 Obama's poll numbers point to his defeat in 2012 11/22/10 Holder ignored risks of civilian terror trials 11/16/10 Dems love facts and science --- except when they don't 11/08/10 Obama, new GOP lawmakers are on collision course 11/01/10 New GOP star on track to defeat Dem legend Russ Feingold 10/26/10 If Dems lose, Obama will blame everyone but himself 10/19/10 Profligate Congress should read its own bills 10/13/10 Why Big Labor couldn't match Glenn Beck's rally 10/11/10 Trash-talking Democrat faces defeat in Florida 10/05/10 A GOP unknown in striking distance of Barney Frank 09/28/10 Administration inflates green-jobs numbers 09/20/10 In Delaware, GOP should target Dems, not O'Donnell 09/14/10 GOP Insiders Wary of Landslide Predictions 08/31/10 For Obamacare supporters, judgment day approaches 08/23/10 Obama has himself to blame for Muslim problem 08/17/10 Cut spending without cutting services? Start here 08/17/10 For Michelle Obama, extravagance dents popularity 08/09/10 Obama's zealous civil rights enforcer gets busy 08/02/10 A battle between Left and Right --- inside the GOP 07/26/10 GOP spoiling for fight over Berwick appointment 07/20/10 How long will the public tolerate Afghan war? 07/12/10 NASA's Muslim outreach: Al Jazeera told first 07/02/10 Legal complaint against Gore is detailed, credible 06/28/10 Obama and Dems heading for electoral disaster 06/21/10 Who told Obama drilling is ‘absolutely safe’? 06/14/10 Billions for ‘green jobs,’ whatever they are 06/07/10 Sestak a no-go for any job. So what was the deal? 05/31/10 As economic worries worsen, White House puts on the glitz 05/25/10 GOP dilemma: Fight Kagan, or go along? 05/11/10 Enforcing nation's immigration laws would be a bargain 05/03/10 How Obama could lose Arizona immigration battle 04/27/10 What's behind the anti-Tea Party hate narrative? 04/20/10 As government expands, beware the post-office example 04/19/10 Who wins in 2010? Good luck reading tea leaves 04/12/10 GOP Obamacare strategy: Try repeal, then cut 04/05/10 Obamacare was mainly aimed at redistributing wealth 03/30/10 Message to Dems: People still don't like Obamacare 03/23/10 The coming consequences of Obamacare 03/16/10 Marco Rubio and the Republicans who love him 03/15/10 GOP hopes town halls take health care off table 03/08/10 Dems turn risky health vote into manhood contest 03/01/10 Why Obama defies the public on health care 02/22/10 South Carolina mulls 2012: Romney? Palin? Huck? 02/16/10 GOP winning war over Miranda rights for terrorists 02/09/10 Who are the 300 terrorists held in U.S. prisons? 02/02/10 Is Obama dissatisfied with being president? 01/19/10 The Republican dilemma: Good Michael or Bad Michael? 01/12/10 Now the lawmakers are figuring out what they didn't know 01/05/10 GOP deserves blame for Democratic excesses 12/29/09 Dems' dreams of a blue West begin to turn red 12/22/09 Why Dems push health care, even if it kills them 11/30/09 Dems' kamikaze mission: Health care by New Year's 11/23/09 Why it's a mistake to bring Gitmo prisoners here 11/16/09 Dems' slick fix: $210 billion of fiscal restraint 11/10/09 Obama can't be community organizer for the world 11/02/09 At key moment, Obama leaves health post unfilled 10/26/09 ‘Fierce urgency' for jobs, not health care’ 10/12/09 Facts hurt Jennings in youth sex controversy 10/05/09 Amid terror threat, Dems chip away at Patriot Act 09/27/09 In Afghanistan, let U.S. troops be warriors 09/21/09 Under fire, Democrats abandon ACORN in drove 09/14/09 Dems stifle Republican health care plans 09/08/09 For Dems, a serious Charlie Rangel problem 09/07/09 Obama's speech: Wrong setting for a sales job 09/01/09 What happened to the antiwar movement? 08/24/09 Why Dems may jam through health care plan 08/17/09 GOP thinks the unthinkable: Victory in 2010 08/10/09 The empty words of a journalist turned flack 08/03/09 Probe finds new clues in AmeriCorps IG scandal 07/27/09 Obamacare haunted by unkept promises of stimulus 07/20/09 Why the GOP failed the Sotomayor test 07/13/09 What the GOPers will ask Sotomayor 06/29/09 Serious questions remain for Mark Sanford 06/22/09 How GOPers can crack the AmeriCorps scandal 06/16/09 Worried about Sotomayor? Consider Andre Davis 06/08/09 Can Mitch Daniels save the GOP? 06/01/09 When the Dems derailed a Latino nominee 05/26/09 Why the GOP will defeat Obama on healthcare 05/19/09 Rosy report can't hide stimulus problems 05/12/09 The Reagan legacy is the man himself 05/05/09 Sen. Specter, meet your new friends 04/27/09 Ted Olson: ‘Torture' probes will never end 04/20/09 Who's Laughing at the ‘Axis of Evil’ today? 04/14/09 Congress needs Google to track stimulus money 04/06/09 Beyond AIG: A bill to let Big Government set your salary 03/30/09 On Spending and the Deficit, McCain Was Right 03/24/09 It's Obama's crisis now 03/17/09: Geithner-Obama economics: A joke that's not funny © 2009, NEA

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