Michele Bachmann On Cain’s 999 Plan: It Isn’t A Jobs Plan, It Is A Tax Plan

She wants us to turn Cain’s “999” plan upside, “because the devil’s in the details”, dontcha know.

So is Bachmann right? Is Cain’s plan a tax plan instead of a jobs plan? At National Review, Josh Barro thinks so indicating that Cain’s plan includes both a VAT tax and a sales tax:

Herman Cain’s 9-9-9 plan includes a personal income tax, a business tax, and a sales tax, all at flat rates of nine percent. Bruce Bartlett critiques the plan in the New York Times today, and he flags a fact about the business tax that I hadn’t been aware of:

The business tax in the Cain plan bears no resemblance to the present corporate income tax. The tax would apply to gross sales less dividends paid and all purchases from other companies, including investment goods. Thus, there would be no deduction for wages.

This is far more similar to a value-added tax than to a corporate income tax. And indeed, the description on Cain’s website matches Bartlett’s, saying the business tax would apply to “Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.” One question is what Cain means by “gross income,” but I think he has to mean something like gross revenue–anything that looks like a profits concept would already exclude “purchases from other businesses” and so they would not be there to deduct.

If Cain’s plan simplified the tax code, and lowered overall tax burdens, that’d be a good thing. But this plan would have to go through Congress, and proposing the new tax streams in this plan with little certainty that the old ones would go away sounds like a good way for Americans to keep paying all the taxes they pay now, plus the new taxes Cain is proposing.

And just the mention of a VAT tax gives me the heebie jeebies.

Score one for Bachmann. Cain has ridden to the front of the GOP pack while touting this plan as his economic model, now thanks to Bachmann’s questioning there’s going to be a whole lot more scrutiny on it. It’ll be intereting to see if Cain, and his frontrunner status, survives.

Of course, that’s also why so many of these candidates are reticent to put out specifics. We accuse them of being vague, focused on platitudes rather than policy, but then when one candidate throws something specific down the pack of candidates (not to mention the media) attacks.

Rob Port

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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