Herman Cain talks tax reform with ‘9-9-9’ proposal

If you know one thing about Herman Cain, it’s probably that he used to be the chief executive of Godfather’s Pizza.

If you know two things about him, you are likely to have heard of something called “9-9-9.”

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During The Washington Post-Bloomberg debate, GOP presidential candidate Herman Cain talks about his tax plan.

During The Washington Post-Bloomberg debate, GOP presidential candidate Herman Cain talks about his tax plan.

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That is the Republican businessman’s shorthand for his tax reform plan. The idea has become the centerpiece of his upstart campaign for president, boosted recently with surprisingly strong showings in opinion polls and a closely watched GOP straw poll in Florida.

Cain uses 9-9-9 like a mantra, promoting the plan in his Southern drawl. It has become so familiar that people sometimes ask him about it on the street.

“That number 9 plan,” a passerby said recently, grasping Cain’s hand as cameras filmed the exchange for an Atlanta television station. Said another man: “It’s refreshing to hear a plan that has some logic.”

Under 9-9-9, Cain proposes replacing the current tax system with a 9 percent corporate tax, a 9 percent personal income tax and a 9 percent national sales tax. He argues that the simple plan would revive the economy by promoting growth, and in his characteristic blunt style asserts that it would free taxpayers from a complicated tax code that has become “the 21st-century version of slavery.”

Tax reform hasn’t played a central role in the 2012 Republican presidential race, with the candidates instead bickering over Social Security and who has a stronger record on the economy. But whether to raise taxes, or reform the tax code, is a big part of the debate over cutting the federal budget deficit.

Cain has said that his plan would collect about the same amount of revenue that now flows into the government, and that it would increase as the economy strengthened. Experts, however, say that is difficult to know because the candidate has given only broad outlines for his proposal, which would allow some credits and deductions, such as a charitable deduction.

Conservative economists say Cain’s reform plan is a good one — in theory. They say it would prevent the government from hindering growth by choosing who receives tax breaks. But they are skeptical that it would get much traction in Congress, and they warn that adopting a national sales tax could open a Pandora’s box. Currently, only states and the District of Columbia can charge a sales tax.

Liberal economists say the plan would shift more of the burden to lower- and middle-income families, the beneficiaries of many of the regulations and deductions that complicate the tax code.

“Mr. Cain’s tax proposal only makes sense if you believe that the problem with the current tax code is that low- and middle-income households have it way too good, and they should give more of their income to those poor Americans making more than half a million dollars a year,” Andrew Fieldhouse, a budget analyst for the liberal Economic Policy Institute, wrote on the think tank’s blog recently.

Still, the 9-9-9 plan has at least two things that other tax plans lack: a catchy slogan worthy of the most popular pizza deal and a charismatic voice to promote it.

“It’s a pretty impressive plan, frankly,” said Kevin Hassett, director of economic policy studies at the conservative American Enterprise Institute. “His plan is economically efficient and he’s found a way to portray it that has some political currency.”

Cain is viewed as a long shot for the nomination because of his lack of political experience, connections and organization, and because of some early stumbles on foreign policy and Islam. But he has raised his profile by turning in a series of good-natured debate performances that highlighted his skill as an orator (before running for president, he worked as a conservative talk radio host and a motivational speaker).

Cain also has won positive reviews from voters who appreciate his willingness to tackle wonky details by introducing 9-9-9.

Not since publisher Steve Forbes ran for president in 1996 has the Republican electorate shown such an openness to revamping the tax code, experts say.

“There’s a real receptivity to looking at the causes and sources of our economic angst, that’s for sure, and it creates a fertile environment to talk about our tax code,” said Michael Franc, vice president of government studies at the conservative Heritage Foundation. “Sometimes there’s a willingness to think really big when things are really bad.”

Forbes was a leading advocate for the “flat tax,” which would impose a uniform income tax rate for all earners.

Lately, support has been growing in conservative circles for the “fair tax,” which would replace virtually every federal tax, including the income and corporate tax, with a national sales tax of 23 percent. Several GOP presidential candidates, including Rep. Michele Bachmann (Minn.) and Texas Gov. Rick Perry, have spoken approvingly of the proposal, and Cain considers 9-9-9 a stepping stone toward such a tax.

Liberals have criticized the “fair tax” and the “flat tax” as regressive.

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