Herman Cain’s 9-9-9 Plan: Good or Bad?

cains-999-plan-9-9-9-politics-1318297494Herman Cain is your non-typical presidential candidate, and an interesting one at that. When you look at his life-long achievements, they are grand and admirable. But when it comes to his political experience, he has virtually none, and he has only begun to see how brutal, conniving and dishonest politicians can be.

And this is what concerns me most. When you take a little bit of naivety and mix it with a brand new federal tax code, you are seriously exposing yourself to some very harsh unintended consequences if you don’t have a thorough understanding of how Congress works.

Of all the presidential candidates currently in the mix, Herman Cain has the most detailed and specific economic plan to get this country rolling again, and a lot of people are jumping on board the 9-9-9 plan. While its catchy title seems to be resonating with some, don’t gloss over this plan without first giving it some serious in-depth thought. In my opinion, there is one really scary thing about this plan.

It’s the third “9” …

What is the third “9”? It’s the new 9% national sales tax Mr. Cain would like to introduce as part of his tax reform. This would be a brand new tax on top of the existing Federal Income tax that will affect every single American citizen (and illegal’s I suppose). So, how exactly will this affect you? Any time you buy a product at the grocery store, the gas station, amusement park, outlet stores, or you buy a new car, a new TV, new clothes, or any other product, you will have to pay a 9% tax on the total sale. This is in addition to existing state and city taxes. If your local sales tax currently stands at 8%, you will have to pay an additional 9% national sales tax for a total of 17%. That means, for every $100 dollars you spend, you will pay about $17 dollars in taxes.

Now, before you start bashing me, I understand his plan will greatly reduce the federal income tax, thus lowering the tax burden on middle-class and upper-class tax paying citizens (the poor may be hurt by this, but that’s a whole different blog entry). Because those people will be taxed less at the Federal level, they will have more money to spend and thus shouldn’t be affected by the addition of a national sales tax. I get that, but it’s not what I’m worried about.

taxesWhat I am worried about is introducing a new revenue stream for the Federal Government in addition to the revenue streams that currently exist. A new National Sales Tax is a very dangerous idea because once the genie is out of the bottle, it’s very hard to put it back in, or at the very least control it. Especially in this day and age when our Federal Government is out of control. Why exactly is this so dangerous? Because it opens up a whole new tax scheme that can hurt all Americans, but mostly the middle-class, the retired, and the poor.

Some will say that his plan has a built-in safety clause. Pfffttt … what safety clause? Nothing is safe from Congress. Not even a 2/3 super majority vote in the Senate. We live with a government that passes unconstitutional laws, starts wars without congressional approval, empowers a privately run bank called the Federal Reserve to legally counterfeit US currency, and allows government agencies to pass new regulations without congressional oversight.

I can’t help but shake my head and smirk when he tries to sell the people on this 2/3 super-majority vote. He can write this “requirement” into the legislation, but I guarantee there will always be exceptions. Lawmakers are always finding ways to circumvent the House voting laws, Senate Voting laws, cloture votes, or when that fails they simply re-write the laws to suit their needs. Or hell, they just ignore them all together. Ever heard of the “nuclear option”? Or what about the “budget reconciliation” procedure which provides a means of making changes in federal policy to meet fiscal guidelines set by Congress? Do you not think taxes will be linked to fiscal guidelines? They will find a way to raise the tax without achieving a super-majority vote. Mark my words.

A national sales tax has the ability to generate a tremendous amount of revenue, thus increasing the federal government’s powers. When they need more money, they can simply tinker with the national sales tax to fund new entitlement programs or pay for wars with our hard earned money. After all, the government doesn’t make money, it spends tax money. More of our money will be taken from us, and instead of spending that hard earned money on things we want to buy, the government will instead spend it on things they want to buy.

Let’s fast-forward into the future. Say the country is once again in economic peril, or perhaps not, and either party is in power. And just like 2009 and 2010, they control all three branches on the Federal Government. Say they get themselves into a another mess where they are spending way more money than they take in. Do you not think they will find a way to “reconcile” the 9% National Sales tax to 11%? Do you not think they will find some way to invoke the “nuclear option” to raise that tax rate?

Of course they will.

And this is why I find it dangerous and scary. It’s like Lou Ferrigno injecting himself with human growth hormone. The government will swell to epic proportions, approaching the size of Barry Bonds head. Once a new tax scheme like this is introduced, it is very hard for the People to revoke it. Here’s an interesting fact; when the Federal Income tax rate was first introduced in 1913, it was set at 1% for the lower bracket and 7% for the top bracket (those making more than $10 million in today’s dollars). Today, the lowest bracket pays 10%, thanks to the Bush tax cuts. Before that, it was 15%. Just as the Federal Income tax has done, the National Sales Tax will most certainly increase beyond 9%.

I think Michelle Bauchman said it best; when you flip the 9-9-9 plan upside-down, it’s the 6-6-6 plan. The devil is in the details.