The nonpartisan Tax Policy Center has taken a close look at Herman Cain’s 9-9-9 plan and released what Cain hasn’t: a rigorous breakdown of who gets a tax increase and who gets a tax cut under the proposal. The short version is that about 84 percent of taxpayers, most of them low- or middle-income, would see a tax increase. About 14 percent of taxpayers, most of them high-income, would get a tax cut. The tipping point is among filers making between $200,000 and $500,000. That’s when you see more tax cuts than tax hikes. Here’s the table:
My earlier post Thursday on Herman Cain’s 9-9-9 plan was a bit theoretical. So I asked Edward Kleinbard, a tax law professor at the University of Southern California, to walk me through the tax burden for a typical family of four with an income of $50,000 in the current system and under Herman Cain’s plan. Before we get to the details, here’s the bottom line: Cain’s plan would increase the family’s tax bill by thousands of dollars.
Let’s get something straight: There is no 9-9-9 plan. Not, at least, in the sense that most people think there is.
Herman Cain has not proposed three entirely separate taxes -- one a 9 percent corporate income tax, another a 9 percent consumption tax, and then a final 9 percent personal income tax. Rather, he has proposed an 18-9 plan: an 18 percent consumption tax and a 9 percent personal income tax. Or maybe he has proposed a 27 plan: a straight 27 percent payroll tax on wage income. Depends on which tax professor you ask and how deep into the details you want to go.
Herman Cain was director, and ultimately chairman, of the Federal Reserve Bank of Kansas City between 1992 and 1996 (official details in pdf form here). It turns out the Atlantic’s Josh Green (who is now Bloomberg BusinessWeek’s Josh Green) was on this story back in May, and he’s got some great quotes from Drue Jennings, a lawyer who served alongside Cain. “ “Inflation was always the big bugaboo,” Jennings says, “and when it comes to monetary policy, he was an inflation hawk. I’ll tell you, that’s the most conservative bunch of guys I’ve ever met.”