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Herman Cain’s Plan To Revive The American Economy

Common sense solutions from my candidate for President….

Herman Cain in Wall Street Journal: “My Plan to Revive Economic Growth”
Published: Thursday, September 15, 2011

Last week, President Obama unveiled his eagerly anticipated jobs plan. After 43 minutes of his speechifying, Americans were left wondering: We waited 30 months for this?
Indeed, it seems Mr. Obama’s first term has been spent advancing a legislative agenda that pays no mind to our ailing economy and the Americans whose sufferings are casualties in his ideological war. After a failed stimulus package, preferential industry bailouts, and the disastrous government overhaul of the health-care industry, it seems the plight of the American worker has remained an afterthought.

This is the worst jobs recovery since the Great Depression. If the Obama administration’s aim was to merely tie for last place with the previous worst recovery, it would have created eight million more jobs, based on comparative data from the Bureau of Labor Statistics. If our recovery were more typical of the postwar era, as former Sen. Phil Gramm reported on this page in April, we would have 14 million more jobs today.

As a longtime leader in the business community, I know firsthand that government does not create jobs. It can only create the conditions in which businesses operate. These conditions can spur growth, or they can suppress it. The conditions imposed by the current administration have suppressed growth.

Still, there is hope. That hope begins with economic certainty, a sort of assurance the president seems unwilling to provide. I, on the other hand, have proposed a plan that would stabilize and grow our economy:

“Cain’s Vision for Economic Growth,” also known as the 9-9-9 Plan, is founded upon three guiding economic principles: Production drives the economy. Risk-taking creates growth. Units of measurement must be dependable.

The plan begins with restructuring the tax code to include the broadest possible base at the lowest possible rate. The elements are:

• A 9% corporate flat tax. Businesses would deduct purchases from other businesses and all capital investment. The resulting gross income is taxed at 9%.

• A 9% personal flat tax. Individuals would deduct charitable contributions, then pay 9% on the rest of their income. Capital gains are excluded.

• A 9% national sales tax. This levy would be placed on the consumption of all new goods. Used goods purchased would be excluded.

My plan would also permanently eliminate taxes on repatriated profits, as well as payroll taxes and the estate tax.

All of these measures would free up capital, spur production, and incentivize risk-taking, thereby fueling the economy and creating jobs. The plan has been designed to be revenue neutral initially, and then revenues would grow in line with the economy.

But these policies must be coupled with sound money. A dollar must be worth the same tomorrow as it is today. Stabilizing the dollar’s value starts with the federal government taking significant measures to rein in its spending and pay down the national debt. Americans must be assured that the federal government will live within its means and get serious about eliminating our crippling debt. Repealing ObamaCare, Sarbanes-Oxley and the Dodd-Frank bank-regulation bill would be critical steps.

Finally, my plan promotes enterprise zones, also known as “empowerment zones.” Coupled with tax reform and monetary stabilization, empowerment zones would revitalize inner cities by providing tax credits to businesses that hire workers living and working in underprivileged areas.

Some of the most tragic unemployment numbers can be found in minority communities and in urban centers around the country. Empowerment zones would create a whole new generation of wage-earners providing for their families. The late Jack Kemp, a secretary of the department of Housing and Urban Development and a dear friend, was one of the first lawmakers to propose empowerment zones. He understood the tremendous economic benefits they would provide.

Each job lost today is not merely a statistic. Americans are struggling to determine whether to pay their mortgages or buy groceries, whether to buy school uniforms or pay the electric bill.

Such despair is unfitting for the greatest nation the world has ever known. After all, it is inherently American to work, to risk and to dream. Our government’s policies should encourage that, not stifle it.

Mr. Cain, a Republican, is running for president of the United States. He is a former chairman and CEO of Godfather’s Pizza and a former chairman of the board of directors to the Federal Reserve Bank of Kansas City.

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20 Comments

  1. Gee, nothing there about giving billions of dollars to “Green Energy” companies run by cronies, bundlers, and relatives of the House Democrat leadership. Clearly, the man knows noting about economics.

    /sarc

    Comment by V the K — September 29, 2011 @ 1:23 pm - September 29, 2011

  2. At first hand, I liked the 9-9-9 plan, but upon further reflection, I’m not so sure.

    What is bothering me is the 9% sales tax component. Will it be a VAT tax? Probably so, and what’s to keep Washington from increasing it in the future, just as the europeans have been doing? Even if Cain wins this round and Republicans capture Congress, we can’t count on future Dem presidents and congresses from increasing it.

    In addition, most states and cities such as my home in Scottsdale, AZ have sales taxes of about 8% which go to pay for local needs. So are we looking at a possible 17% or higher combined sales tax?

    Comment by man — September 29, 2011 @ 1:33 pm - September 29, 2011

  3. I also have questions about creating a national sales tax. I don’t think it will be a VAT; VAT and sales tax are 2 distinct things, and Cain makes clear that he means a sales tax. But history shows that creating any new kind of tax is playing with fire, because politicians will just increase it over time.

    Having said that, Cain’s plan has many virtues. If carried out in full, it would greatly lessen the existing disincentives to work and to job creation… while putting discincentives on consumption… which is the combo America needs in order to deleverage, i.e. to get out of its debt hole, so that economic growth can resume.

    It’s also very good that Cain is talking about sound money, and repealing not only ObamaCare and Dodd-Frank, but Sarbox as well.

    But… He says hardly anything about spending cuts. Spending cuts are the biggest and most important piece to get done, and I wish he would say more about them.

    Cain-Ryan, anyone?

    Comment by ILoveCapitalism — September 29, 2011 @ 1:42 pm - September 29, 2011

  4. ILC’s comment (if I read it correctly) that an additional sales tax would be a disincentive to consumption is a strong argument against it.

    Politically speaking, if Cain were to win the nomination I can imagine the Dems attacking him for “raising taxes” through the sales tax on the 47% of Americans who don’t pay taxes now. Dems regularly castigate Repubs in the AZ legislature when they advocate increased sales taxes. Dems aren’t against raising taxes; far from it. They just want the “wealthy” who earn more than $200k to pay all the taxes.

    Comment by man — September 29, 2011 @ 1:51 pm - September 29, 2011

  5. ILC’s comment (if I read it correctly) that an additional sales tax would be a disincentive to consumption is a strong argument against it.

    You read it correctly, and we disagree: I consider it a strong argument for it. America’s “debt-fueled consumption-binge” economy is a kind of falsehood, a kind of phony economy that must and will end… to be replaced, hopefully (or if we have the right policies in place), by a more traditionally American productive economy.

    Comment by ILoveCapitalism — September 29, 2011 @ 1:58 pm - September 29, 2011

  6. Sales taxes are collected by the retailer, which requires the enormous costs of collection, remitting and reporting. That’s another big burden on the few mom & pop retailers who have been lucky enough to hang on during this horrible depression. Coupled with the disincentive to consumption, it could well do them in.

    Comment by man — September 29, 2011 @ 1:59 pm - September 29, 2011

  7. The largest states already have state sales taxes; adding a federal would not be a huge burden. Other (I would argue, more important) burdens will be lifted in the rest of Cain’s program.

    Comment by ILoveCapitalism — September 29, 2011 @ 2:18 pm - September 29, 2011

  8. Corporate taxes are already figured into the cost of everything we buy. So, if corporate taxes are lowered as part of the package, I don’t see where a sales tax will necessarily increase the cost of anything.

    Comment by V the K — September 29, 2011 @ 2:20 pm - September 29, 2011

  9. My doubt (again) is that once the federal sales tax is established, future Democrats will increase it well beyond 9%… *and* income taxes…

    Comment by ILoveCapitalism — September 29, 2011 @ 2:35 pm - September 29, 2011

  10. Though a Cain/OBama debate would be funny.

    MSNBC Token Telemundo Questioner: Mr. Cain, How would you improve the image of the Republican Party among Hispanics?

    Cain: Well to start, I’d stop having AFT agents purchase guns and run them to drug cartels to kill Americans and Mexicans.

    Comment by The_Livewire — September 29, 2011 @ 2:44 pm - September 29, 2011

  11. I think you could apply that concern to *any* tax scheme, ILC. When the income tax was first introduced back in the early 20th Century, it was only a 1% tax on the highest levels of income. Those who opposed the income tax claimed it someday might rise as high as 20% They were ridiculed.

    Within a generation, the top tax rate was 83%. (Which is about the level it would have to be to support Obama’s spending levels.)

    Comment by Doctor Evil — September 29, 2011 @ 2:49 pm - September 29, 2011

  12. DE, exactly. They said originally that the income tax would surely never have to go past 1-2%.

    Comment by ILoveCapitalism — September 29, 2011 @ 3:01 pm - September 29, 2011

  13. I was vacilating between Donald Trump and Herman Cain. I joined the Cain bandwagon the day that Trump bowed out. I even wrote offering to work on Herman´s campaign. As part of his resume´he was a Vice President of Rillsbury, and also CEO of the National Restaurant Association. He has had considerable executive experience which, the observer in the Oval Office does not have. The Philadelphia region of Burger King was a loser, Herman took over the region and made it one of the more profitable ones for Pillsbury. The Community Organizer didn´t have to worry about ACORN´s finances, they had a stream of money from leftist zillionaires. ILast wek I predicted that Herman could be another Huckabee in that he could move into the top tier as more people hear his message. The reason his message resonates is that he uses the KISS principle.

    Comment by Roberto — September 29, 2011 @ 3:43 pm - September 29, 2011

  14. I’m supporting Mr. Cain for the Republican nomination.
    He has recently supported The Fair Tax and that was a major factor in my supporting him.
    If this is his modification of that idea, I am not impressed and quite disappointed.
    I am not a single-issue voter and I surely think the rest of his qualities, character and experiences are plenty for which to support his nomination and election.

    Comment by rodney — September 29, 2011 @ 4:30 pm - September 29, 2011

  15. As long as a sales tax is on “brand new” goods…and not services, or used goods on which some tax has already been paid…it might work. The current massive tax-industrial-complex isn’t.

    Comment by Ted B. (Charging Rhino) — September 29, 2011 @ 5:09 pm - September 29, 2011

  16. I broke the ice with Cain by remarking that we were both born in the same year (he is 193 days younger than me) and both took our first degree in mathematics. I asked him about the ballistics work he’d done for the Navy. Lotta differential equations? Oh, yeah.

    ODEs or PDEs? Mostly O’s—which is the right answer in ballistics. I recall thinking: Smart cookie. I doubt mathematical ability is directly relevant to a president’s tasks, but a guy who can do advanced math is a guy who can pursue chains of deductive reasoning for minutes at a time—rare in human beings. 

    John Derbyshire has more at Taki’s mag

    http://takimag.com/article/raising_cain/page_2#ixzz1ZMVFYzgG

    Comment by SoCalRobert — September 29, 2011 @ 7:07 pm - September 29, 2011

  17. Having acknowledged his national sales tax is a non-starter for me, I will also acknowledge I genuinely like him. I like his authenticity. I respect his intellect. I’m comfortable with him, as I suspect many americans are. In that vein, perhaps my comfort level with him is that he is a genuine african american who is so different from Obama. Obama’s father was an african who I am not convinced lived as an american. I suspect Obama never really lived the true african american experience, never overcame the challenges in the same way Mr. Cain or Condolezza Rice must have done. I won’t say Mr. Obama is not genuinely american, but perhaps I am saying Mr. Cain is more genuinely american.

    Comment by man — September 29, 2011 @ 8:26 pm - September 29, 2011

  18. In our pop-culture world, is “9-9-9” really a good name politically?

    It’s so easy to parody. And if I can think of it, so can others….
    Possibly NSFW, or your keyboard, if you’re not up on your Tarantino-ourve.

    Comment by Ted B. (Charging Rhino) — September 30, 2011 @ 11:18 am - September 30, 2011

  19. Sales taxes are collected by the retailer, which requires the enormous costs of collection, remitting and reporting. That’s another big burden on the few mom & pop retailers who have been lucky enough to hang on during this horrible depression. Coupled with the disincentive to consumption, it could well do them in.

    Yep. That is a concern. I do run my own business here in CA, and, even though my business is tiny, keeping track of all the tax info needed to comply with the CA Board Of Equalization is a pain. And mine is tiny pole proprietor business. Now, if you were going to do away with the income tax altogether and switch to a national sales tax, as that would shift the accounting complexities from one system to another, I would be more likely to go for it. But having yet another govt process added to the burden of doing business…. Color me skeptical.

    That said, I do like the direction hes going.

    Comment by Sonicfrog — September 30, 2011 @ 12:50 pm - September 30, 2011

  20. Herman´s comment that blacks have been ¨brainwashed¨ by the Democrats has upset black liberals. Last night on The O´Reilly Factor and this A.M. on Fox & Friends, Jehmu Green, told Bill and Brian Kilmeade that Herman´s comment was an insult. Neither host had, what I consider, an appropriate response. They went on quoting statistics regarding the high percentage of the black community votes Democrat. They missed the point. They should have an insult when a black conservative, such as Herman, Congressman, Allen West, or former Secretary of State Condi Rice are called ¨oreos¨and ¨Uncle Toms.¨What they´re saying is, how dare they left the plantation and began seeing thing from a different perspective. My first job in California was with Hamburger Hamlets in which the waitresses and other staff were black and it was electin day 1970 when Reagan was running for re-election. On the ticket was an african american, by the last name of Dymally. The waitresses during break had already voted and were talking the probable results, One said, ¨I hated to vote against a brother, but he´s in the wrong party.¨ This is typical of the mindset which Hermain was referring to.

    Comment by Roberto — September 30, 2011 @ 4:02 pm - September 30, 2011

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