Vote For Cain To Prove You're Not Stupid

(available here)

Herman Cain for President: A Pizza in Every Oven

(as seen here)

Cain's 999 Plan Beats Perry's Flat Tax

So says Diana Furchtgott-Roth here:

The Cain plan gets rid of payroll taxes, about $15,000 on an income of $100,000, whereas the Perry plan does not. So under the Perry plan, our hypothetical family would pay $25,000, compared with $14,970 under the Cain plan. That's an extra $10,000.

If Cain could get rid of the payroll tax as well as keep tax rates to 9 percent, many taxpayers would gain substantially. But he has not said how he will replace the payroll tax revenues or transition to private accounts.

Explaining Property Taxes Then and Now

Critical listeners to recent remarks I made here on The Newsmaker Show with Kevin Doran will have wished that I had done a better job of explaining property taxes in the late 19th century and how their burden on property owners helped create the conditions which led to the tax reform which gave us the Income Tax in 1913.

So do I. Regrettably one can't say everything one needs to when trying to explain something else, especially like Herman Cain's 999 Plan.

If anyone gets the impression that I intended to say that the federal government routinely and directly taxed homeowners then, for example, in the same way homeowners are so taxed today on their property, that would be a mistake, but one which could easily be inferred. The federal government did do that sort of thing three times in the 19th century, but only for very brief periods and only to fund wars: in 1798, 1812 and 1861. Which is not to say there weren't other attempts, notable in the Pollock decision in 1895.

To a considerable extent, however, I have found that the terms "property tax," "excise," "tariff," "ad valorem" and the like get used interchangeably, and confusingly, in discussions about taxes both then and now. We would be better served if we were all more precise in these matters, but even supposed experts talk about this period with such imprecision sometimes that it is difficult to know exactly what people really do mean.

For example, "ad valorem" today gets used, as at usgovernmentrevenue.com, as a category under which to list excise taxes, tariffs, property taxes, etc., as opposed to income taxes, corporate taxes and social insurance taxes. In truth, however, its specific meaning has been more complicated than that.

From that characterization would not know that tax historians often distinguish personal property taxes in the first half of the 19th century as "in rem" from real property taxes in the second half as "ad valorem."

In the case of the former, as in 1798, slaves, for example, were taxed for war preparations with France as personal property. It didn't matter, however, how much one had invested to purchase the slave. Each one was simply taxed at 50 cents. Similarly a tax assessor would count the windows on your house, your horses, your cows, chickens etc. (unless you hid them well) and total them up by kind and assess the appropriate tax, which inhered in the thing, "in rem," not in the value, "ad valorem."

The latter is how the federal government in the 19th century was able to get around the onerous requirements of apportioning direct taxation of property equally according to state population. Instead of the arduous task of trying to tax the whole general sum of an individual's wealth in every state on an equal basis, the value of beer, wine and liquor, for example, produced anywhere could thereby be taxed everywhere the same, proportionally according to its value. In this way there was no need to divide the necessary revenue to be raised according to the population of the individual state, since the basis was the same everywhere beer was sold.

Such taxation is often called an excise, generally understood to fall on domestic produce. We still pay excises to this day, for example everytime we fill up the gas tank, 18 cents on the gallon to the feds. In truth excises are just a special kind of sales tax. A tariff is similar, but taxes foreign imports.

When it comes to the problems of farmers in the late 19th century, who eventually made league with Prohibitionists to install the Income Tax in 1913, theirs was a two-fold problem. Not only did the cost of financing state government fall heavily on them because of property taxation in the state in which they lived, federal excises on their produce represented a double "property tax" whammy. Think tobacco excises.

Viewed from this perspective, government at all levels, it seemed, got them coming and going.

To his credit, Herman Cain is trying to imagine a world in which government gets it for a change, instead of the taxpayer. His way of trying to make that happen is to play human desire to consume off of human desire to avoid paying taxes, by making what we consume each and every day the scene of a skirmish in the battle for limited government, which cannot exist without self-restraint.

Whether it's Herman Cain's 999 Plan or a Flat Income Tax, The Current Code Must Go

So says Steve Forbes, here, who reminds us why that is:

The federal income tax code and all its attendant rules and regulations -- almost 10 million words and rising.

The code has been changed 14,000 times since 1986; last year alone there were 500 changes. The cost of compliance is horrific. The IRS itself calculates that we spend more than 6 billion hours a year filling out tax forms, the equivalent of almost 3 million full-time jobs. The Tax Foundation calculates that by 2015 annual compliance will be costing the American people some $483 billion a year.

Herman Cain's So-Called Abortion Flip Was Nothing of the Kind: He Clearly Endorsed Private Choice For Adoption, Not Abortion.

What it was was a poor attempt to entrap the still too trusting Herman Cain to make it appear that his position on abortion is incoherent.

The transcript of the controversial interchange shows Herman immediately grasped Piers Morgan's attempt to bait and switch when Herman TWICE interjects the comment "you're mixing two things," namely "bringing up the baby as her own" and "abortion."

The media and the left, like Ed Kilgore of The New Republic here, are hoping that if they repeat their lie enough that we'll all believe it.

Piers Morgan starts talking about abortion, and suddenly introduces a hypothetical about raising a child who was conceived in a rape "as her own":

MORGAN: Abortion. What's your view of abortion?

CAIN: I believe that life begins at conception. And abortion under no circumstances. And here's why --

MORGAN: No circumstances?"

CAIN: No circumstances.

MORGAN: Because many of your fellow candidates -- some of them qualify that.

CAIN: They qualify but --

MORGAN: Rape and incest.

CAIN: Rape and incest.

MORGAN: Are you honestly saying -- again, it's a tricky question, I know.

CAIN: Ask the tricky question.

MORGAN: But you've had children, grandchildren. If one of your female children, grand children was raped, you would honestly want her to bring up that baby as her own?

CAIN: You're mixing two things here, Piers?

MORGAN: Why?

CAIN: You're mixing --

MORGAN: That's what it comes down to.

CAIN: No, it comes down to it's not the government's role or anybody else's role to make that decision. Secondly, if you look at the statistical incidents, you're not talking about that big a number. So what I'm saying is it ultimately gets down to a choice that that family or that mother has to make.

Not me as president, not some politician, not a bureaucrat. It gets down to that family. And whatever they decide, they decide. I shouldn't have to tell them what decision to make for such a sensitive issue.

MORGAN: By expressing the view that you expressed, you are effectively -- you might be president. You can't hide behind now the mask, if you don't mind me saying, of being the pizza guy. You might be the president of United States of America. So your views on these things become exponentially massively more important. They become a directive to the nation.

CAIN: No they don't. I can have an opinion on an issue without it being a directive on the nation. The government shouldn't be trying to tell people everything to do, especially when it comes to social decisions that they need to make.

MORGAN: That's a very interesting departure --

CAIN: Yes.

MORGAN: -- from the normal politics.

CAIN: Exactly.

There is absolutely nothing controversial here about Herman Cain saying a president has no business telling people to raise such a child as their own.

And Rick Santorum should be ashamed of himself for piling on.

Incidentally, Herman is correct about the relative rarity of the adoption question: statistics show just under 250,000 total children per year waiting to be adopted and adopted, in about equal numbers.

That's because our advanced civilization murders about 1,210,000 unborn children every year.

Larry Kudlow Likes Herman Cain's 999 Plan

Here:

Former Treasury hands Gary and Aldona Robbins priced out the Cain plan on a static basis and discovered it to be revenue neutral. Essentially they found a $26 trillion tax base yielding $2.3 trillion in revenue for a 9.1 percent overall rate. Hence, 9-9-9.

In essence, the Cain plan combines the flat tax (with its single marginal rate) and the fair tax (which uses the national sales tax). I don’t know if this is really possible. But in terms of first principles, throwing out the tax code, lowering marginal tax rates, getting rid of the carve-outs and deductions that make the current code impossible to understand, and providing an economic-growth tonic to heal our current funk, it makes a lot of sense.

That Herman Cain is rising in the polls is no surprise.

Recalculating Herman Cain's 999 Plan For Calendar Year 2008

Herman Cain's 999 Plan continues to get tweaked by none other than Herman Cain himself, in response to criticisms and questions about it in the media in the wake of recent Republican presidential debates.

Some of the additional information he is supplying looks to have been latent and just previously unexplained, while other information has the feel of modification. In any event, the unsettling thing about this is that the 999 Plan appears to be something of a work in progress, not a finished, fully vetted proposal, which makes it less sellable politically.

One question which seems so important to the left, for obvious reasons, has been the plan's ability to fund the Leviathan State's appetite.

Previously it seemed to me that the plan was woefully inadequate to the task. But some of the additional information that has come out makes me more sanguine, if that's the right word as the taxpayer stares into the maw of the bloodthirsty Beast.

For example, with respect to the 9 percent corporate tax, it turns out that, for reasons which I still do not understand, business' cost of labor is no longer deductible for tax purposes under the plan. So for 2008 when corporate profits posted as $1.25 trillion, you theoretically must add back in net compensation of nearly $6.2 trillion. I think. A 9 percent tax on $7.45 trillion now yields a much higher corporate contribution to federal revenue for 2008 of $671 billion.

Combine that with a 9 percent tax on adjusted gross income of $8.5 trillion equaling $765 billion and with a 9 percent tax on personal consumption expenditures of approximately $10.5 trillion equaling $945 billion, the resulting sum is $2.38 trillion, just shy of the actual collected in 2008 under the current system, which was $2.5 trillion.

And if I read the language of the 999 Plan correctly, there will also be substantial tariff revenue from imports designed to level the playing field between them and our own exports. Imports in 2008 of $2.5 trillion taxed at 9 percent would yield an additional $225 billion in revenue, more than enough to cover the $120 billion shortfall. Presumably some imports would not be so taxed due to pre-existing trade agreements, but the potential is obviously there for far more revenue from tariffs than America presently collects.

Mr. Cain is also now stating that his plan is undecided about how to remove the regressivity of the sales tax on the poorest Americans, but that it will. This will, of course, reduce the revenue described above, as will the income tax deduction for charitable contributions.

Herman Cain Is The Loose Cannon On His Own Ship

Seen here in a story about his latest abortion answers:

“It seems that Cain is either constantly misunderstanding questions posed to him on what should be easy, fundamental issues, or he admits to having misspoke after it is pointed out that the position he has stated is not that of a conservative,” the Iowa Republican’s Craig Robinson wrote. “Herman Cain has been campaigning for over a year now, and with only about two months until people start voting in caucuses and primaries, I’m more confused about where Herman Cain stands than ever before.” 

Herman Cain's TARP Comments Now and Then Reveal That He Has No Clearly Defined Objection to Government Ownership of 'Private' Industry

In June 2011, here:

I studied the financial meltdown and concluded on my own that we needed to do something drastic, yes. When the concept of TARP was first presented to the public, I was willing to go along with it. But then when the administration started to implement it on a discretionary basis, picking winners and losers and also directing funds to General Motors and others that had nothing to do with the financial system, that's where I totally disagreed. 

We should -- the government should not be selecting winners and losers, and I don't believe in this concept of too big to fail. If they fail, the free market will figure out who's going to pick the up the pieces.

In October 2011 here:

CAIN: I have said before that we were in a crisis at the end of 2008 with this potential financial meltdown. I supported the concept of TARP, but then, when this administration used discretion and did a whole lot of things that the American people didn't like, I was then against it. So yes, and I'm owning up to that. 

Now, getting back to the gentleman's question in terms of what we need to do, we need to get government out of the way. It starts with making sure that we can boost this economy and then reform Dodd-Frank and reform a lot of these other regulations that have gotten in the way -- 

COOPER: Time. 

CAIN: -- and let the market do it just like Mitt has talked about.

So Herman's story now is that he is upset that winners and losers were picked under TARP by the Obama regime. Bailing out banks was OK. GM? Not so much.

To Herman, however, picking winners and losers just among the banks doesn't seem to matter, where TARP obviously was used to pick winners and losers in that industry. Just ask all the sound banks who've had to ante up advance FDIC insurance fund premiums to restore the depleted DIF used to help the failing and see how they feel about all the special treatment the big bad boys received at their expense.

Here is Herman just three weeks after passage of TARP in October of 2008, raising no objection whatsoever to the new strategy of picking winners in the banking industry:

[I]nstead of buying toxic mortgage-related assets of banks as originally proposed, the Treasury has changed tactics and will buy equity positions called preferred stocks, which gives us as taxpayers an ownership stake in their success for a limited period of time.

Herman is making things up as he goes on many issues, editing his positions as he becomes aware of the inconsistencies of his own statements.

Not surprising, but not very encouraging.

999 Plan Contains Protectionist Elements

Which to Jerry Bowyer, here, is just another reason to oppose the plan:

And I haven’t even mentioned the protectionist elements of the plan which would, for example, allow business to deduct expenditures for capital goods if they are purchased domestically, but not if they are purchased for abroad. That one alone would constitute a Smoot, a Hawley and a half a Perot in one fell swoop.

Herman Cain on Social Security

Seen here:

"Increasing the retirement age for benefits" is "preposterous."

Herman Cain Clearly Considers Mormonism To Be Just Another Christian Denomination

In his own words in 2007, here:

The Baptists, Methodists, Catholics, Lutherans, Pentecostals, Mormons and a few other faiths have three things in common – they believe in Jesus Christ, that He is the Son of God and that He died and was resurrected for our sins.

So what's the problem?

The political pundits continue to try and make Mitt Romney's religious beliefs a big issue as he runs for the Republican presidential nomination. Different denominations of Christianity are just that – different denominations – which means different worship practices of the same fundamental Christian beliefs.

America: where what once was fringe becomes mainstream.

Herman Cain Invites Every Family To Do Tax Arithmetic To Test His 999 Plan, But Only 17 Percent Do Their Own Taxes

Could they even if they wanted to?

So this story from earlier this year:

So given all the supremely personal acts that we have happily relinquished to software, why do 60 percent of Americans use a real live tax pro to do their taxes? TurboTax costs less than $100 for most people, and it’s probably a breeze compared with open enrollment. Yet only 21 percent of Americans use tax software. Nearly as many, 17 percent, use a pencil.

Herman Cain's 999 Plan Actually Taxes Income Three Times, Not Just Once

Most people who work get paychecks from businesses. Net compensation to about 150 million Americans in 2009 came to $5.9 trillion.

The businesses who pay all these people will no longer be able to deduct the cost of labor from their corporate taxes under the 999 plan, so business will pay a 9 percent tax on its cost of labor.

Once businesses pass through the wages, the workers now pay a 9 percent tax on this money which now becomes income to them, which, however, has already been taxed once at 9 percent as income to the businesses.

Whereupon, with what's left after being taxed twice, the workers now buy things in the marketplace from businesses and pay a 9 percent national sales tax without exception, thus exposing the same money to a third round of taxation.

Over the weekend Herman Cain has maintained here that his plan "is fair and neutral, taxing everything once and nothing twice."

On the contrary, much of the income is taxed three times.

Herman Cain Has a 999 Plan. Obama Just Has a 9 Plan, as in Unemployment.

So says Joseph Curl, here.

Jonathan Chait Sticks With Calumny

Here:

Even if Cain decided midstream to switch from business plan pseudo-candidate to actual candidate, it is difficult to believe that many of his putative supporters would actually pull the lever for him. Announcing one’s support for him is a statement, a finger in the eye of Obama and the liberals, not an indicator of a likely vote.

Herman Cain's Little Noticed 718 Percent Tariff Increase on Foreign Imports

Most of us have been fixated on income, sales and business taxes in Herman Cain's 999 Plan, but there is a little noticed line which I think adds considerable government revenue in the form of increased tariffs on foreign imports, and considerable American competitiveness by exempting our own exports from the plan's 9 percent business tax and the 9 percent sales tax:

Exports leave our shores without the Business Tax or the Sales Tax embedded in their cost, making them world class competitive. Imports are subject to the same taxation as domestically produced goods, leveling the playing field.

In 2010, imports to this country came to $2.3 trillion, on which a paltry $25.3 billion was collected in tariffs. If I understand Cain's plan correctly, that tariff would balloon to $207 billion to match tax burdens born by domestically manufactured and sold goods and services which are subject to the 9 percent business tax.

The last time tariffs on foreign goods similarly accounted for 9.6 percent of federal revenue occurred sometime between 1930 and 1935.

Herman Cain is thereby defying free-trade ideology in the name of a level playing field, which message should win him considerable support among American patriots, regardless of party.

Richard Viguerie Rips Romney and Cain New Ones For Supporting TARP

Here:

Defending TARP should burst Herman Cain’s populist bubble, but Romney in particular, defended the 2008 bank bailout in one of the most disingenuous statements of the evening, if not the entire debate cycle.

According to Governor Romney, the $700 billion Wall Street rescue package "was designed to keep not just a collapse of individual banking institutions, but to keep the entire currency of the country worth something."

Noting could be further from the truth and Romney knows it.

Herman Cain's 999 Plan is Under Attack by Bloomberg and WAPO

Here and here, mostly on the grounds of insufficient revenues, and tax regressivity and unfairness.

Herman needs to respond with numbers, and soon.