Welcome to the Twilight Zone: Herman Cain’s “9-9-9″ Plan

blr-editor | October 15, 2011 | Comments (0)

9-9-9: Smoke, Mirrors and a Whole Lot of Nothing (Photo: Gage Skidmore)

Lately, we’ve been treated to the spectacle of Herman Cain, Pizza CEO-turned-politician, zooming to the top of the polls in the Republican presidential primaries. He is just the latest to skip up the polls – the flavor-of-the-month, following Michelle Bachmann and Rick Perry.

What appears to have grabbed the headlines as much as the candidate himself is his “9-9-9” economic plan, which calls for a 9% corporate tax, a 9% income tax and a 9% national sales tax.

Answering the question about the plan’s origins, Cain quipped that it “didn’t come off a pizza box.” Asked where it did come from, he said “the American people,” but added that he had the help of a team of economic advisers.

“One of my experts that helped me to develop this is a gentleman by the name of Rich Lowrie out of Cleveland, Ohio,” Mr. Cain said. “He is an economist.” Rich Lowrie, a licensed stockbroker, appears to be a wealth management consultant for Wells Fargo.

True to his day job, Lowrie seems to be aiming the 9-9-9 squarely at the people whose wealth he manages. That’s because the incredibly regressive 9-9-9 formula would only serve to make the rich richer and further impoverish the most needy and vulnerable in the population.

It seems as a passing observer that the Republican party not only insensitive to the wealth gap between rich and poor, but is actively seeking to increase it.

That’s would be fine if you could get the majority of the voters to vote against their own self interests. But amazingly, this might actually be the outcome of our coming election.

The “flat tax”, “9-9-9″ and other regressive taxes are all policies that grow that unhealthy wealth gap, but do something equally bad – increase the deficit. Economist after economist has pointed to this flaw in Cain’s 9-9-9 formula – it would simply not bring in as much revenue as the current tax law.

Top earners – earning most of their money above the 35% bracket would make out like bandits, along with those at 33% and 28%. It would revert to 9%.

The 9% national sales tax is on consumption, which affects the rich the least, as they have the most disposable income. For the very rich, add another few points and there you have it. The top earner goes from 30+% to perhaps effectively 14 or 15%. That money would not be made up from the millions of poor, who currently pay an effective tax of 0%.

What this does therefore is gut tax income from individuals and push more of the the burden to the poor who can least afford it. It would also gut corporate taxes, currently 15-35%, down to 9%. How do we make all this up? Increased economic activity? Trickle down economics? No, just wishful thinking.

What is particularly scary is the mass of innumerate Americans cheering the innumerate Cain everywhere he goes. My concern is only alleviated by the fact that the 9-9-9 plan has absolutely zero chance of becoming law, despite Americans’ penchant for voting against their own self interest.

Since Cain is likely to be a passing fad, even within the Republican party, I think I’ll be able to sleep better tonight. And so should you.