MIAMI (CBSMiami.com) – The latest GOP frontrunner, former Godfathers Pizza CEO Herman Cain, has been riding high since his straw poll victory in Florida.
Cain spoke frequently of his 9-9-9 plan to deal with taxes in a recent debate, but the details of the plan may cost Cain his frontrunner status.
Cain’s plan seeks to get rid of the tax code and replace with a 9 percent national sales tax on all purchases, a 9 percent business tax, and a 9 percent income tax.
It’s bumper sticker ready and Cain said that if the public thinks about it, they will love it.
But, as always with any type of plan, the devil is in the details. USC law professor Edward Kleinbard broke down the particulars of the law and discovered that the 9-9-9 plan “is a terrific example of fiscal hocus pocus.”
“The 9-9-9 plan would materially raise the tax burden on many low and middle-income taxpayers who today face little or no income tax, and a 15.3 percent effective payroll tax burdern,” Professor Kleinbard wrote.
Kleinbard wrote that the plan claims to repeal the payroll tax and roll back the personal income tax. However, “what the plan really does is substitute for current payroll taxes (12.4 percent OASDI payroll tax, capped at $107,000 of wage income, and the uncapped 2.9 percent Medicare payroll tax), a new 18.9 percent uncapped payroll tax plus a 9 percent sales tax on an employee’s after-tax income.”
The 9-9-9 plan, according to Kleinbard, would essentially invert the tax structure so that the working poor and the middle class see a large tax hike, while the wealthiest in the nation see a tax cut.
The plan, as interpreted by Kleinbard, would fundamentally shift the American economy and at the same time violate the very vocal anti-tax hike establishment in both the Republican Party and the GOP.
Cain has tied his campaign to the concept and spent much of the time in the last debate trying to sell his plan as his rivals pounced.
Cain has surged to the front, but as more details and analysis comes out about his tax plan, Cain may have a difficult time staying at the top of the GOP presidential primary field.
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