GOP presidential candidate Herman Cain appeared on Fox News Sunday again this weekend and he's still out there touting his ridiculous 999 plan as some magical cure for our economy, when it's pretty much more of the same that we've been hearing from most of these Republicans, which is to lower taxes on the rich at the expense of everyone else and privatize Social Security.
When Chris Wallace pointed out to Cain that they took a look at his plan and his numbers didn't quite add up and even though Cain claimed his plan was researched by leading economists, they couldn't find any of their names. Cain's explanation -- he doesn't want to "compromise their confidentiality."
I'd say it's more likely he either doesn't have any advisers who are actually economic experts, or they're about as reputable as Arthur Laffer and his infamous Laffer Curve he drew on a napkin that got all the right-wingers worked into a frenzy as an excuse for the rich not to pay their fair share of taxes.
Transcript via Fox News:
WALLACE: OK, you are now pushing what you call the 999 plan for economic growth -- 9 percent corporate flat tax and 9 percent personal flat tax and 9 percent sales tax, but you would eliminate the payroll tax, the estate tax and the tax on capitol gains. Question, what do you think that would do to the economy?
CAIN: It would boost the economy and here's why. Think about the fact that corporations now are looking at for the next year and few months a 35 percent top corporate tax rate. To wake up and say you mean the tax rate is going to be 9 percent? That is going to inspire the business community.
Secondly, small businesses which generate most of the jobs, they are also going to be excited because it is going to treat subchapter S and S corporations the same. What the president doesn't understand, a lot of people don't understand, is when he throws around numbers like everybody making over $250,000 is going to impose another tax, he is punishing small business, because with a subchapter S corporation, if you eke out a profit, you have to run it through personal income tax and you could be penalized if you make too much money.
WALLACE: Let me ask you about this, though, you say that this plan would be revenue neutral, yet you would lose all these rates -- you would lower all these rates, you would eliminate the deductions and we'd end up with the same amount of total revenue for the government as what we currently have.
We went to your website to try to check this out. There is no explanation on your website of how you arrived at 999 or how these numbers add up.
CAIN: Here is how we arrived at it. I had some of the best economists in this country help me to develop this plan. You know, my background is mathematics. It was a simple regression analysis. We took the government data and looked at how much tax revenue from personal income tax, how much tax revenue came from corporate tax, how much revenue came from capitol gains tax, how much revenue from the death tax. We added them all up and you do a simple regression analysis and say in order to reduce this much on corporate income, personal income and national sales tax, what should that number be if we equally break up those three buckets. It was a simple regression analysis.
WALLACE: Now you say that, and you say -- and you just repeated that this plan was researched and developed by some of the leading economic thinkers in the country. Again we looked at your website, no mention of anyone.
CAIN: No, I haven't put them on there, -- the most important thing is to put the plan on there. We are following up now with an official scoring of my plan, but because the way it was derived was so simple to produce such a simple concept we didn't make that a priority.
WALLACE: All right. But let me ask you about this, because Mitt Romney came out with a 59-point plan on jobs. Glenn Hubbard who was -- is now the Dean of Columbia Business School and was the chairman of the council of economic advisers for George W. Bush wrote the forward, helped him develop the plan. Tell me the name of one of these leading economic thinkers who helped you come up with this plan.
CAIN: The chairman of my economic advisers is a gentleman by the name of Rich Lowery of Cleveland, Ohio. He worked with a couple of other people quite frankly that are well known that I'm not at liberty to mention their names.
WALLACE: Why not?
CAIN: Because they have their own independence businesses and I don't want to compromise their confidentiality at this point.
When they tell me it is OK to mention their names publicly, I will mention it. But I -- trust me, it was a couple of people that you know very well. But I don't want to compromise their...
WALLACE: But wouldn't they be proud? I mean, if this is a great plan wouldn't they be proud to say?
CAIN: They'd be proud after I get it passed. And then they would be. But no, Chris, I got some people to work -- help me go through the thinking on this that I'm not going to compromise their confidentiality at this point just to prove to people that this is a well thought out plan.
WALLACE: Well, let me just say, because there isn't a whole lot of back up, and we don't have the bona fides of a guy like Glenn Hubbard. We tried to do our own very rough analysis and you are a lot better of this idea of regression analysis than we are. It looks to us under your plan corporations and the wealthy will end up paying a considerably less than they currently do, and lower income people, particularly the 45 percent, roughly of Americans who don't pay any income tax now will end up paying a lot more true?
CAIN: No. Not true. Everyone who works pays the payroll tax, which is 15.3 percent. So even if you don't own a corporation and don't have to pay corporate taxes, your tax goes from 15.3 to --
Secondly on the national sales tax.
WALLACE: Yeah, but what about the 45 percent who don't pay income tax now?
CAIN: A good economic growth plan should not be designed to help more people not pay taxes, Chris. And let me give you the statistic as to why. 50 percent of the taxpayers pay 97 percent of the taxes. What are we supposed to do, get that number to 50 percent paying 100 percent? No. And --
WALLACE: I'm not saying it's wrong, I'm just saying though that they're going to end up paying more in taxes.
CAIN: They are going to end up paying some taxes, but not necessarily more. And here's why.
The individual taxpayer will decide how they spend their money in terms of the 9 percent sales tax. OK? Now, their behavior will determine how much tax they pay.
Only if they spend every dime that they make will they pay the full 9 percent. It will encourage savings and it will encourage people to be responsible for their own decision-making
WALLACE: Mr. Cain, we're going to have to leave it there. It is one of the new plans, one of the few new plans that's come out. And we're going to have to explore it some more.
CAIN: We will have it officially explored (ph), and I'm going to try to get my advisers to allow me to use their name.
WALLACE: Well, we would like to have them and you back on.
Mr. Cain, it's always a pleasure.
CAIN: Thanks, Chris. It's a pleasure. Thank you.
WALLACE: And we'll see you at the big debate on Thursday in Florida.
CAIN: I'll be there. I'll be there.
WALLACE: I am sure you will be. Me too.
