Cain’s 9-9-9 Plan Gain’s Big-Name Backers

Friday, 14 Oct 2011 12:59 PM

By Martin Gould and David A. Patten

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Herman Cain’s catchy 9-9-9 tax overhaul system is gathering major supporters as the former pizza magnate consolidates his position at the top of the Republican field in the race for the White House.

House Budget Committee Chairman Rep. Paul Ryan and Ronald Reagan’s economic guru Art Laffer both expressed their support for the plan to replace the current tax code.

The anti-tax Club for Growth also came out in favor of Cain’s plan which would cut income and corporate taxes to 9 percent and institute a new national sales tax at the same level. Payroll, capital gains and estate taxes would all be eliminated under Cain’s proposals.

Do You Really Back Herman Cain? Vote in This Urgent Poll — Click Here Now

Eventually Cain’s plan calls for the complete elimination of income taxes – and the IRS – and the introduction of what he calls the Fair Tax, in which the all Federal revenue would come from a sales tax.

“I love the 9-9-9 plan, it’s a great first step,” Laffer told Fox News’ Bret Baier. “This is a lot better than our current tax laws that are filled with all sorts of ducks, chickens, pigs and turkeys. They’ve just got to be cleaned out and we’ve got to completely revamp the codes.”

Ryan didn’t go quite as far. The Wisconsin congressman did not endorse the plan, but praised it saying he loved “specific and credible” proposals.

Club for Growth President Chris Chocola called the 9-9-9 “an outline for a more prosperous and globally competitive America,” saying it is “both pro-growth and a good starting point on the way to a flat or fair tax.

“Eliminating taxes on capital gains and dividends and combining that with huge rate cuts in both corporate and income taxes would create an unparalleled economic boom,” said Chocola. “9-9-9 also eliminates the regulatory and compliance costs from the current tax code that suck billions out of the economy each year.”

Much of the criticism of the plan has been the idea of a new sales tax, which critics fear would be bound to grow. But Chocola dismissed those fears. “Of course a future Congress could raise taxes above the 9 percent levels, but under our current monstrosity of a tax system, Congress already can raise taxes at any time and often has. It is on a path to do so yet again next year with the expiration of the Bush tax cuts.

“Herman Cain’s proposal might not be the perfect plan, but it is a truly revolutionary tax reform that would amount to a massive job creating tax cut on investments, savings, and income.”

And Chocola issued a challenge to others in the GOP race. “Instead of tearing down ideas that would create economic growth and jobs, the other Republican presidential candidates should produce their own plans to achieve a flatter and more growth-oriented tax code. The American people deserve nothing less.”

Backing for Cain’s plan also came from Kevin Hassett, senior fellow at the American Enterprise Institute also praised the Cain’s proposal for moving towards a flat tax. “If someone’s going to attack the 9-9-9 plan, I would say they should be careful because you are talking about the Republican holy grail,” he told the Associated Press.

Douglas Holtz-Eakin, the former director of the Congressional Budget Office who advised John McCain during his presidential run, said Cain’s estimates were a good faith-effort at a rough calculation. “I don’t think it’s dramatically out of line with reality,” he told Bloomberg.

Do You Really Back Herman Cain? Vote in This Urgent Poll — Click Here Now

And Alan Viard, a senior fellow at the American Enterprise Institute in Washington, which favors smaller government, said the revenue estimates were “in the ballpark in some vague sense.” But Viard said the rates might need to be a little more than 9 percent to generate the same revenues as the current tax code.

As Cain has risen to the top of the GOP field – he is now running neck-and-neck with Mitt Romney at the top of polls –his plan has come under attack. During Tuesday’s GOP debate former Utah Gov. John Huntsman joked that he thought it was the price of pizza while Spirit Airlines have mocked the scheme by bringing in a 9-9-9 plan for certain fares. Texas Gov.Rick Perry’s wife, Anita, said, “When I hear 9-9-9, I want to call 9-1-1.”

Others have even suggested Cain got the idea from the video game SimCity 4 in which citizens live under a tax code of 9 percent for commercial taxes, 9 percent for industrial taxes and 9 percent for residential taxes.

Cain’s case wasn’t helped when he refused to name his advisors, except for “Rich Lowrie from Cleveland, Ohio,” during the Dartmouth College debate. Investigations soon found that Lowrie is a personal tax consultant for a Wells Fargo bank branch in Pepper Pike, an affluent suburb of Cleveland, who has no training in economics.

Lowrie himself defended the plan on Fox News on Friday, claiming, “The economy will expand by $2 trillion, 6 million jobs are going to be created and the unemployment rate will come back down to a more typical or natural rate of 4 or 4 ½ percent.

“Wages are going to go up by 10 percent, businesses investment will go up by a third,” Lowrie added, saying those figures came from former Treasury Department aide Gary Robbins. In an interview with Politico, although Robbins praised the plan, he added, “There’s nothing wrong with the plan, it just wouldn’t be the one I picked.”

Lowrie said Cain had told his advisers he wanted a “simple, transparent, efficient, fair and neutral,” tax code, adding “I want to tax everything once and nothing twice.”

Fox News contributor Stephen Hayes, of the Weekly Standard, said he couldn’t understand why Cain had not mentioned Laffer’s name at the debate instead of Lowrie’s. Despite that, he said Cain’s plan is resonating with the public.

“The most effective line Cain had in the debate the other night was when he said these politicians are all telling you this can’t be done, well I’m not a politician and that’s why I’m making these arguments,” said Hayes.

“He’s really talking to a huge swath of the Republican primary base and Independent voters as well to say the politicians have handled this for years and years and years and that’s why we are where we are.”

Do You Really Back Herman Cain? Vote in This Urgent Poll — Click Here Now

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