The Real Agenda Behind Herman Cain's Tax Scheme Besides Boosting His Personal Income

[Better Believe It]

Weekend Edition October 21-23, 2011
Nein! Nein! Nein!
The Real Agenda Behind the Cain Tax Scheme
by MIKE LOFGREN
Mike Lofgren is a former professional staff member of the House and Senate Budget Committees. He retired this year.


The tax plan of Republican candidate Herman Cain is the best current example of the real agenda of the GOP. It is a masterpiece of marketing, with its simple “9-9-9” label being reminiscent of a two-for-one pizza special. It would lower all Federal income tax rates to a single 9-percent rate, set the corporate rate at 9 percent, and levy a national sales tax of 9 percent. It has the sort of meretricious simplicity that appeals both to the simple-minded and the mainstream media. True to its “horserace” philosophy of covering politics, early on most of the the press declared Cain’s plan a brilliant campaign move without making any effort to evaluate its substantive merits.

Bruce Bartlett, formerly an economist in the Reagan and George H.W. Bush administrations (and a fellow Republican apostate), analyzed the 9-9-9 tax plan. His conclusion: it decreases revenue as it drastically cuts the taxes of the wealthy and – here’s the kicker – raises taxes on the least well-off. And it does not in fact tax all income at 9 percent (so much for its appealing tripartite simplicity): it lowers the capital gains and dividend rates to zero. Generally, the richer the individual is, the more likely his income is to be derived from capital gains and dividends, which are already taxed at less than half the top marginal income tax rate. This current inequity in the tax code accounts for the fact that the 400 richest Americans have been paying an average effective Federal income tax rate of 17-18 percent since passage of the Bush tax cuts: little more than half the effective rate they had paid since the early 1990s – even as their combined income quadrupled. Cain’s plan would sharply increase this disparity.

So much for the policy; what of the political strategy? At first I wondered: did Herman Cain dream this plan up himself? If not, who whispered it in his ear, and what interests did that person represent? Now we know: Rich Lowrie, a Cain economic advisor who lives in Gates Mills, Ohio, a village of 2400 inhabitants east of Cleveland, and one of the wealthiest suburbs in the country. Lowrie’s day job is as an investment advisor, and he has been involved with such groups as the Koch brothers-funded Club for Growth and Americans for Prosperity. His plan has had substantive input from long-time Republican operatives Arthur Laffer (who, with his Laffer Curve, is one of the fathers of the current generation of crackpot right-wing economists), and Steve Moore, a pioneer in the operation of 501(c)4 organizations that promote the political views of billionaires while remaining tax-exempt.

Cain has never bothered to put together a proper campaign organization. Given that his campaign is spending tens of thousands of dollars of scarce funds to buy copies of his auto-hagiography, it is possible that his whole candidacy, like that of Donald Trump or Sarah Palin, is mainly a bid to boost his personal income: book sales, speaking fees, a gig as a Fox News commentator. As year chased weary year in the pizza pie business, Cain no doubt grew tired of being a huckster for his own brand of ketchup sauce and easer-like mozzarella on a soggy cardboard crust; he wanted to augment his income in the more respectable realm of ideas. The Club for Growth, Americans for Prosperity, Americans for Tax Reform, and all the other front organizations for billionaires would agree: regardless of what happens to his candidacy, Herman Cain has succeeded in the world of ideas.

Read the full article at:

http://www.counterpunch.org/2011/10/21/the-real-agenda-behind-the-cain-tax-scheme/

[applegrove]

1. Before the rich get a minimal tax rate that meme needs an introduction and

some infrastructure in the people's brains. Cain is playing that role.

[customerserviceguy]

2. The only reason Cain's getting any traction

is that the rest of the Rethugs simply have not articulated any of their own hare-brained schemes. Cain beat them all to it.