Republican 2012 presidential candidate Herman Cain's political clout is on the rise...and many are attributing it to his proposal for major tax code reform.
The "9-9-9" plan, as it is being touted, is brutally simple. A 9 percent tax on household income...a 9 percent corporate tax...and a 9 percent national sales tax. That's it.
Under the plan there would be no deductions allowed, except those made to charities.
This is an attempt to shift the tax burden away from production and towards consumption, to balance the load, said Rich Lowrie, Cain TMs Cleveland based senior economic advisor, to the Christian Science Monitor.
This taxes everything once but nothing twice... In the price of things is the embedded cost of all taxes, he said. We will be exporting goods without the taxes built into them and hitting imports with the sales tax. It will level the playing field.
Independent economists who have studied the plan say it would be hard to really estimate the impact of Cain's plan.
I can understand how a presidential candidate may want to start out and go a different way, said John Silva, chief economist at Wells Fargo Securities in Charlotte, N.C. But, we have to know how we TMre going to get from here to there " there are a lot of implications for this.
Every CEO says the reason they TMre not hiring is because they TMre not seeing demand, said Rachelle Bernstein, a vice president and tax counsel at the National Retail Federation to the Monitor. "An additional tax on consumer spending will negatively impact that already weak demand."
What do you think of Herman Cain's proposed 9-9-9 plan? Do you think it would work? Would a flat tax be fair? Or should those who make more pay more?