Cain Says Long-Term Goal Is Shift to ‘Pure Consumption Tax’

Monday, 31 Oct 2011 11:53 AM

 

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(Republican presidential candidate Herman Cain said his so-called 9-9-9 plan is the first step toward his ultimate goal of a “pure consumption tax.”

The 9-9-9 proposal has bolstered Cain’s bid for the Republican presidential nomination. The plan would scrap much of the current tax code and replace it with a 9 percent national sales tax and 9 percent levies on businesses and on individual income.

In a discussion today at the American Enterprise Institute, a Washington think tank that supports smaller government, Cain framed the 9-9-9 plan as a tool that could bring together advocates of a flat tax and the so-called fair tax, which is a national sales tax. The U.S. could then make the more fundamental shift toward a system that taxes only consumption, Cain said.

“You put the consumer totally in charge for what they pay in taxes based upon their purchasing behavior,” he said. “That’s going to supercharge this economy.”

Switching from a system that taxes income to one that taxes consumption would push more of the burden to people who spend more of their income. That tends to be lower-income households.

In his nearly hour-long appearance at AEI, Cain didn’t address a report that he had sexually harassed two female employees while head of the National Restaurant Association in the 1990s.

In his remarks, Cain sought to combat criticism of the 9-9- 9 plan, including commentss from other candidates seeking the 2012 Republican presidential nomination.

Cain said his opponents, including Rep. Michele Bachmann of Minnesota, are saying that the 9-9-9 plan creates a European-style value-added tax “because they want to scare people.”

“You could call it a VAT, but it only happens one time,” he said. “In Europe, it happens multiple times.”

He also said Texas Gov. Rick Perry’s proposed optional 20 percent flat tax would make the tax system “more complicated.”

“I call Governor Perry’s plan ‘flat tax light,’” he said. “He keeps in some of the favorite” tax benefits “to basically try to reduce criticism. I’m not interested in a plan that’s going to reduce criticism. I’m interested in a plan that’s going to solve the problem.”


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