Posted on by ColinTwiggs

Herman Cain Explains His 9-9-9 Plan

WSJ interview with Herman Cain:

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His plan ticks many of the right boxes:

  • Low corporate tax rate
  • Low flat personal tax rate
  • Broad-based consumption tax
  • Remove the Fed’s dual mandate and limit them to protecting the dollar against inflation

Consumption taxes are often seen as regressive — because everyone pays the same rate — but can easily cater for the poor/unemployed through food stamps and/or changes to unemployment benefits. The worst thing is to create an administrative nightmare with a two-tier system where some items (e.g. basic food or medicines) are exempt from the tax.

4 Replies to “Herman Cain Explains His 9-9-9 Plan”

  2. Pingback: Keep it simple « Gold, Stocks & Forex

  3. A good start. I think you would find a low rate asset tax would be needed to provide the revenue for basic government function PLUS welfare which is (lets face it) wealth redistribution. I support an asset tax levied on only the Government Bond rate nominal return. So if the corporate rate were (say) 25% and the Bond rate were 2% the tax levied would be 0.25%.
    A key benefit of such a tax would be the disincentive to speculate on investment in non-income producing assets (for capital gain). This was the kind of speculation that led to the GFC in 2008.

    1. Asset taxes are difficult to implement:

      • Do you tax gross assets or net of liabilities?
      • How do you arrive at a fair value for assets?
      • How do you arrive at a fair value for liabilities (e.g interest-free loan vs interest-bearing loans)?
      • What if someone owns an asset (e.g. family farm or house) but has no cash to pay the tax?

      You have to keep it really simple otherwise the tax industry will create more holes than Swiss cheese — and the cost of collection will sky-rocket.

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