|Image courtesy of Ragwater Cat|
His main policy initiative is what he calls his "9-9-9" plan. Essentially it proposes a substantive change in the tax code. Simply, it is a 9% flat tax across all income levels, a 9% corporate tax rate and a 9% national sales tax. On the surface, sans a lot of details, it sounds pretty good on several different levels.
Putting aside the notion that it would be difficult, if not impossible, for a new President to make such a proposal become law in a country with so many special interests working around the clock to see to it that it never happens, let's talk about some of the things about it that sound good before I tell you why I think it's not so good.
The first good thing is he is on the right path if he thinks that the country needs a new tax system. The one we have now has so many problems, is so huge, so complicated, and so non-tax related that it has simply become a national nightmare to all but government power mongers and the beneficiaries of their favors.
The second good thing is that any plan that simplifies the code by removing deductions (sometimes called loopholes) and flattening the rate will bring clarity to people and businesses so we can begin to get back to the basics and remove some of the uncertainties that cause paralysis in the economy.
The third good thing is that it addresses the double (and sometimes more) taxation that we all end up paying one way or the other. And, in theory, there may be other good things about it as well.
So what could be wrong with it? Well, as it turns out the problem is as old as a bible story. The problem for Adam and Eve was that their son Abel was too trusting of his brother Cain. He ended up getting murdered because of it. And I'm afraid that we will end up getting murdered in a tax sense by politicians who the modern day Cain trusts too much to leave his tax plan alone if he ever ends up getting it enacted.
Herman Cain's plan which adds a national sales tax to an income tax is just too trusting that future politicians won't just hike one or the other (or both) of them the second they get the chance. I guarantee it will happen, it's as certain as the taxes themselves. Then all of us become like a modern day Abel, that is to say, dead.
It all amounts to just tinkering with the system and like a lot of proposals, it sounds good on paper but it's not worth the paper it's written on. What we need is a new tax system, not more layers on top of the one we have now.
I like Herman Cain on several levels even though he supported the imbecilic TARP law which bailed out the banks and other crony capitalists. And according to a new Rasmussen poll just released it seems a lot of other folks do too since it shows him within 5 points of Obama if the election were held today. But there are no perfect candidates and Cain has his share of baggage from my perspective.
I'm not too big on polls in general and the above one is no exception. Nor is the one which came out today (9-28-11) showing Ron Paul actually leading Obama by 51% to 49%. There are too many variables. In my mind they are like snapping a picture without a flashbulb.
When it comes to tax systems, I like the flat tax best, and when it comes to early preferences for Presidential replacements, I like Ron Paul the best. But since there are no perfect candidates, when it comes to Herman Cain, he's not my first choice, but he's not the worst choice. (That would be Barack Obama.)
The video below explains very well why I prefer a Flat Tax to any other system currently being floated.
To read a great analysis on Cain and his plan please visit International Liberty and see what Dan Mitchell thinks.