12 December 2011
Cain’s False Hope
With the Republican GOP candidacy in play, many potential candidates are within arm’s reach of being at the top. With the Presidential Elections less than one year away, the question still remains, who can take on Obama? One candidate who has found himself in the mix is Herman Cain. Cain has grabbed the attention of Americans with his plan to attack our current tax code system. He believes that his experience in the business world gives him the best chance at restoring our economy. Cain tells American’s that his 9-9-9 plan will solve all the problems with our current system and America will be as strong ...view middle of the document...
”(Cain) He believes that if we adopt this, the national debt will slowly melt away. The plan calls for nine percent business flat rate, nine percent individual flat rate and nine percent national 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.”(Cain)
The second phase of Cain’s plan will be called “The Fair Tax”. It says that “Amidst a backdrop of the economic renewal created by the 9-9-9 Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.”(Cain) Cain’s website says that it will replace individual and corporate income taxes as well as end the IRS as we know it and repeals the 16th Amendment. The sixteenth amendment states that the Constitution gives Congress the power to collect taxes on income without apportioning it among the states. This differs from what Cain is trying to do with his plan. Tyler James, a writer from CBN, says “Cain’s plan would replace the current complicated income tax system, but it would also kill tax deductions that many Americans and businesses like.”(James)
The first problem that I have with Cain’s plan is that its initial attraction was its simplicity. At first glance this tax plan promoted only three main policy points. This looked to be an enticing tax idea in theory, but in reality the simplicity of the plan broke down. Cain is quoted from his office website telling us about his plan, “It’s fair, simple, efficient, neutral, and transparent.”(Cain) The problem is that in reality it is not simple. Once the critics started to pick the plan apart, Cain began to change the fundamental premise of its original intention, which was its simplicity. Grover Norquist, who is the President of the Conservative Americans for Tax Reform, told ABC’s television show that the plan is "very dangerous." He also went on to say that "I'm very concerned about three different taxes -- every one of them can grow.”(Norquist) Cain attempts to sell his plan to the American public on the premise of a nine percent tax across the board. When in actuality he cannot guarantee that the nine percent rate will remain constant and not increase.
Another problem with Cain’s tax proposal is that he proposes a National Sales Tax of nine percent. This concept sounds okay within itself, but Cain does not go on to explain that the nine percent tax will be added on to the already existing state sales tax. In an article written by Dean Clancy, he goes on to tell us “Cain doesn't get rid of the income tax. Instead, he reforms it. And then he adds a new levy -- a national retail sales tax -- on top of it.”(Clancy) In the state of...