Friday, October 14, 2011
Cain: ‘I Have No Idea’ How My 999 Plan Would Work
By Pat Garofalo
Former Godfather’s Pizza CEO Herman Cain’s 999 plan — which would scrap the current tax code in favor of a nine percent personal income tax, nine percent corporate income tax, and nine percent sales tax (on everything, including food) — was the undeniable star of the GOP’s primary debate this week, with the number nine warranting 85 mentions during the course of the evening. As we’ve been reporting, the plan would entail a huge tax increase on the poor while slashing taxes on the rich.
Cain, when faced with analyses showing how much his plan would wallop the low-income Americans, dismisses them, calling them “erroneous.” But as it turns out, Cain isn’t particularly well-versed in the nuances of his plan. Asked how his proposed corporate income tax would apply to products built in other countries and designed and sold in the U.S., Cain replied “I have no idea“:
Mr. Cain made it clear Wednesday his plan remained a work in progress. Visiting Concord, N.H., he added several new wrinkles. He would preserve the deduction for charitable donations, making the flat income tax not so flat; he would exempt any used goods, including previously owned homes and cars, from the national sales tax; and he would allow businesses to deduct new equipment purchases from their 9% corporate income tax, as long as the goods were U.S.-made.
Asked how that would apply to a computer designed domestically but containing Malaysian components and assembled in China, he replied, “I have no idea.”
Even the Cain campaign’s own economist said the 999 plan “wouldn’t be the one I picked” to run with. Remember, the plan was crafted by a Koch-affiliated financial adviser from a Wells Fargo branch in Ohio, not an actual economist.
As ABC reported today, a long list of economists “say Cain’s plan would be a tax hike for the lower middle class and a tax windfall for the wealthy.” Conservative economist Bruce Bartlett wrote that, “at a minimum, the Cain plan is a distributional monstrosity.” Cain would surely dispute these assertions, but how seriously can his protests be taken if he freely admits he has “no idea” how the plan would even function?