Monday, October 17, 2011

The Nine Percent Solution

A flat rate income tax, a national sales tax and a flat rate corporate income tax and all fixed at 9%. Is it the number of the Beast standing on its head?

Why not 8, why not 10? Is it because Nein, Nein, Nein sounds like standing up to something bad, or because it's easier to chant? Certainly there wasn't a lot of mathematics behind Herman Cain's arrival at this Goldilocks level and those who have done some arithmetic, like Melissa Labant, an accountant with the American Institute of CPAs, say that since Warren Buffet's income is mostly in capital gains, the billionaire investor would pay no taxes. The poor fellow trying to support a family on 25 to 30 thousand a year? That 9% means some painful choices have to be made particularly if he has to pay for medical care out of pockets with holes in them.
That national sales tax will certainly diminish already taxed disposable income and harm those of us who spend all of it just keeping the family fed and housed. Yes, this is a simple plan indeed -- simply disastrous unless you're rather well off, like Herman Cain. Sounds great on paper though, just like Communism and some other really disastrous isms.

Would there have to be exemptions for those for whom 9% of income and another 9% of necessary consumption would be ruin? Probably so, but then we're back where we started with loopholes, exemptions and deductions and with almost half the country paying nothing, a situation the simple minded tea bag wavers are making much of in a rather confused way -- as if it was a situation Barack Obama were responsible for. Still the plan offers hope to those for whom paying taxes is a serious burden even though it's false hope that promises to make us more of a country of many serfs and a few lords.

We love simple ideas because life is complex and scary and Herman Cain, although far from the first to propose such regressive tax structures is simply tapping into the power of simple mindedness; maintaining that he wouldn't, as President, sign a bill of more than three pages. It's a good thing that idea wasn't popular when the country was founded. It's hard to envision our already terse constitution being reduced to something acceptable to the minimalists and reductionists looking for a free ride and to people who think the complex global economy should be run more like Godfather's Pizza where you keep firing people and closing stores until it all looks good -- on paper.


Baltazar said...

Herman will out in a week - just as a guess - 3 wives

Capt. Fogg said...

I almost wish he wouldn't be. He's so . . . defeatable.