Simple does not mean better; these words are not synonymous. Sometime in the past, the Godfather must have read the thesaurus incorrectly and confused the two words to go hand in hand. Cain has used the word “simple” as the moniker for his campaign message because he does not know enough about foreign policy, the economy, and our tax code to talk in specifics. Cain has benefitted from his warm and straight forward personality, however, he has misspoken plenty of times. It is time to call Cain out now that he is in the top tier and this includes his biggest doozie, the 999 plan.

Cain constantly touts the simplicity of his plan. Well how about this for straight forward and simple, this plan will never pass through Congress. The 999 plan will bring a huge burden to teenagers getting their first job, college students trying to pay tuition, start up small businesses, and low income families. Even the staunchest of fiscal conservatives will not accept this huge shift. Expanding the tax base is one thing, but having a single mom from New York being forced to pay both a 9% state and 9% national sales tax on her groceries is regressive.

Consider this under Cain’s plan, a recent graduate finds a job that pays $30,000 a year and spends it all on living costs. A doctor earns $500,000 and spends $100,000 of it to live comfortably with his family. The rest is saved or put into investments. With the 999 plan the young man fresh out of college would pay a total 18% tax on his $30,000: 9% income tax plus 9% sales tax. The doctor would only pay 10.8% in taxes on his $500,000 income with the same 9% income tax but only 1.8% in sales taxes since he only needed to spend a fraction of his income. I am not playing games with the numbers, this is simple math that many economists have criticized the plan for. It is not the only criticism either, but it is the only one needed to dismiss the 999 tax system. This is why simple plans don’t work, life isn’t simple.

The argument that we need an entire new tax system does not hold either. Our political system is seemingly broken yet no one is arguing that we need to throw out our constitution and take up the Chilean one. We need major tax reform, not a new, unfair, and unproven tax system. Sure, Chile might like this plan but that’s good for Chile. This is America, I do not want European socialism from Obama and I do not want to adopt the Chilean model from Cain. I want a tax system designed for America. The answer is in the middle; we should reform our tax code by:

  1. Eliminate all loopholes and tax breaks with popular exceptions such as charitable donations
  2. Expand the tax base so everyone participates in carrying the financial burden
  3. Lower rates across the board including income, corporate, death, and capital gains taxes.

Practicality, not simplicity, is the key to getting our country back on track. Maybe Herman Cain should look up that word before the next debate.

 

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