Reception::9–9–9 Plan


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Reception According to the analysis of Howard Gleckman the Tax Policy Center,

When you get right down to it, Cain’s [9–9–9] plan is a 25 percent flat-rate consumption tax — not all that different from the FAIR tax that he says is his ultimate goal. This tax would be paid three times: first on wage income, again at the cash register as a sales tax, and yet again by businesses on their sales minus their cost of goods and services. For tax junkies, the first is a flat tax. The second is a retail sales tax and the third a business transfer tax. But they are all consumption taxes.<ref>Howard Gleckman, Cain’s 9–9–9 Plan Would Cut Taxes for the Rich, Raise Taxes for Almost Everyone Else Tax Policy Center October 18, 2011</ref>

Although Cain has spoken about having designated 'empowerment zones'<ref>{{#invoke:citation/CS1|citation |CitationClass=news }}</ref> wherein a lower percentage, such as 3%, is paid instead, apart from this consideration, some have called Cain's plan more regressive than current policy, thinking it would raise taxes for most households, but cut them for those with the highest income.<ref>{{#invoke:citation/CS1|citation |CitationClass=news }}</ref><ref>TPC Does Herman Cain October 18, 2011, The Tax Policy Center has the distributional analysis of 9–9–9.</ref>

An analysis released to Bloomberg News by the campaign claimed that the rate for each of the three taxes could in fact be as low as 7.3%, but "poverty grants" — which Cain has described as a lower rate in targeted "empowerment zones"<ref>Interview with Herman Cain Erin Burnett OutFront October 12, 2011</ref> — necessitated a national rate of 9%.<ref name="Bloomberg-999"/> Paul Krugman has criticized the plan, saying it shifts much of the current tax burden from the rich to the poor.<ref>Paul Krugman, Cain Unable The New York Times blogs October 15, 2011</ref> Arthur Laffer,<ref name="WSJ-999"/> Lawrence Kudlow,<ref name=autogenerated3>Cain the Tax-Code Killer National Review October 14, 2011</ref> the Club for Growth,<ref name=autogenerated1>Seth McLaughlin, Club for Growth defends Cain's 9-9-9 tax plan Washington Times Inside Politics October 14, 2011</ref> and Congressman Paul Ryan<ref>John Rossomando, Paul Ryan 'loves' the idea of Herman Cain's tax plan October 13, 2011</ref> have spoken favorably of "9–9–9". On October 21, Cain told a crowd in Detroit that the plan would be 9–0–9 for the poor, saying that "if you are at or below the poverty level ... then you don't pay that middle 9 on your income."<ref>Kenric Ward, Herman Cain's Revised '9–0–9' Tax Plan Raises New Doubts Sunshine State News October 25, 2011</ref> Cain's 9–9–9 plan attracted skepticism from his fellow candidates at numerous Republican debates.<ref name=latimes>{{#invoke:citation/CS1|citation |CitationClass=news }}</ref>

In an October 18, 2011 debate several of the other contenders for the GOP nomination attacked the plan, with candidate Rick Santorum referencing the Tax Policy Center's claim that 84%<ref>T11-0375 – Herman Cain's "9–9–9" Tax Reform Plan; Baseline: Current Policy; Fully Phased in Distribution of Federal Tax Change by Cash Income Percentile Tax Policy Center October 18, 2011</ref> of Americans would pay more and that the plan would entail "major increases in taxes on people," a charge Cain has denied.<ref>David Lightman and Steven Thomm, GOP presidential candidates clash in testy debate McClatchy News Service October 19, 2011</ref>

Some economists support the 9–9–9 Plan. The former Reagan Treasury official Gary Robbins stated that the 9–9–9 Plan will expand the GDP by $2 trillion, create 6 million new jobs, increase business investment by 33%, and increase wages by 10%.<ref>9–9–9 Plan | Herman Cain for President</ref> Also, Art Laffer, a famous supply-side economist, told Human Events that “Herman Cain's 9–9–9 plan would be a vast improvement over the current tax system and boom the U.S. economy.”.<ref name=autogenerated2>[1] Art Laffer's quote</ref>

Conversely, other economists feel that the 9–9–9 plan would not stimulate demand.<ref name=autogenerated2>Bartlett, Bruce. "Inside the Cain Tax Plan." The New York Times, October 11, 2011.</ref> Bruce Bartlett of the Reagan and George H.W. Bush administrations has written that Cain's plan "would increase the budget deficit without doing anything to stimulate demand".<ref name=autogenerated2 />

The Economist criticized the 9–9–9 Plan stating that the Cain plan is not a reduction in the current corporate tax, but instead a new value added tax (VAT). The article also stated that Cain's final tax would be a 30% VAT, as compared to the 15% European Union value added tax.<ref>"Dial 9–9–9 for nonsense." The Economist, October 17, 2011.</ref> The Cain plan would change the 35% corporate tax to a 9% transaction tax, which would be flat except for payroll deductions for employees in empowerment zones.<ref>[2] 9–9–9 Plan</ref>

Cain said the following about the 9% sales tax.

Unlike a state sales tax, which is an add-on tax that increases the price of goods and services, this is a replacement tax. It replaces taxes that are already embedded in selling prices. By replacing higher marginal rates in the production process with lower marginal rates, marginal production costs actually decline, which will lead to prices being the same or lower, not higher.<ref>[3] The 9–9–9 plan</ref>

9–9–9 Plan sections
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