What is Herman Cain’s 9-9-9 Plan?
Herman Cain, one of the current frontrunners for the 2012 GOP Presidential nomination, has been running on a plan he calls 9-9-9. It is his idea for reforming the current broken tax system. It is essentially part fair tax and part flat tax.
What is it?
The 9-9-9 plan is a complete tax overhaul of our current tax system. It would get rid of almost all deductions and loopholes for both individuals and corporations. Charitable donations would still be deductible. It would replace the current corporate, income, estate, and capital gains taxes. Instead we would have a flat 9% corporate tax for all businesses, a flat 9% income tax for all individuals, and a 9% national sales tax.
Mr. Cain hopes that this would be phase 1 of a longer term plan to move completely to a fair tax system. Phase 2 would get rid of the corporate and income taxes and raise the rate on the sales tax. I hadn’t actually heard him discuss this part of his strategy yet, but that is what he lays out in his plan on his website.
Can it Pass?
This is the tough part. There are a lot of people that are going to be leery about giving Congress yet another method of taking money from us in the sales tax. There are a lot of people that support a fair tax, but one of the requirements of the fair tax is abolishing the income tax. Adding a sales tax while still having an income tax is a little bit scary. Who’s to say his 9-9-9 plan doesn’t become 19-19-19 in few years under a different administration. I’m slightly concerned about giving another revenue stream without getting rid of the others.
Is it a Good Idea?
It might be. I would be in favor of going to a fair tax, the only question is can it be done. Maybe it makes sense to give it a shot. It would be hard to be much worse than our current tax code. I still haven’t decided who I’m going to vote for in the primaries, and I think Cain is still a bit naive, but his plan is at least bold and different. It merits consideration at the very least.