Herman Cain tweaks 999 plan to help lower-income Americans, and himself

October 21, 2011

DETROIT-Maybe he really does want to be president.

Businessman Herman Cain, who has surged to the top of polls with an innovative tax plan and strong speeches, has been accused by some GOP strategists and the press of operating like a vanity candidate, interested more in gaining attention than the Republican presidential nomination.

But looking to rebut criticism that his “9-9-9” tax plan would raise taxes on poor and middle-income Americans, Cain on Friday delivered a speech here that sounded very much like a traditional politician. The former Godfather’s Pizza executive offered new details on his tax plan that he says would reduce taxes both for people who are poor and businesses that invest in low-income areas like Detroit.

And he strongly defended his own candidacy and credentials.

“People have asked me how did you come up with this (the tax plan) ,” Cain said, standing in a park in front of a now-closed Amtrak station in this city that has become a symbol of urban decay. “Some people think there’s just pepperoni between these ears, but I used to work doing econometric analyses.”

The central plank of Cain’s candidacy is a revision of the tax code which would replace the current, complicated system with three separate nine percent taxes, one on sales, another on income, and a third on businesses.

But an analysis by the Tax Policy Center, a Washington think tank, showed that under the “9-9-9” tax reform plan, 84 percent of American households would see their taxes rise, including some huge increases for people who make less $50,000. Cain has long rejected such criticisms, saying his plan includes “opportunity zones,” which he formally discussed for the first time on Friday.

Under Cain’s plan, the federal government would designate for exemption from the 9-9-9 plan special areas with high unemployment and poverty. In these areas, businesses could deduct their entire payroll from their income subject that would normally be subject to the business tax. People who live or work in these zones would also get tax benefits, although Cain did not detail them.

And to address the criticism he is raising taxes on the poor, Cain would exempt people all over the country who are at or below the federal poverty line (about $22,000 for a family of four) from the tax on income.

But these new details may not blunt the criticism coming from Democrats and Republicans. Although the Tax Policy Center has not yet done an analysis that includes the opportunity zones, millions of Americans would still likely face a tax increase under Cain’s proposals. For families who make more than $22,000, Cain would eliminate many of the current tax benefits they get under current law and require them to pay a nine percent tax on their incomes and purchases.

And while Cain said the opportunity zones would create jobs in cities across the country and help the poor, his proposals were so vague it would be difficult to measure their actual impact. Cain did not define the exact criteria under which these zones would be designated, how many would be created, how large they would be and how much taxes would be reduced in them for individuals who live or work inside them.

Politically, Friday’s speech showed the challenges Cain is now facing, with his rise in the polls causing his rivals to attack him.

On Thursday, former Pennsylvania senator Rick Santorum sharply criticized Cain after the businessman made comments in an interview that seemed to indicate he supported women having a choice about whether to have an abortion. Cain has backtracked from those statements, saying he is “100% pro-life.”

Cain acknowledged the criticisms of his tax plan in his speech. He went point-by-point trying to refute different critiques of 9-9-9, and cast himself as taking fire because he has the most innovative idea in the GOP field.

“This is a day we have an opportunity to explain 9-9-9 without six attacks at the same time,’ Cain said, referring to a debate Tuesday in Nevada which featured criticism of the plan from several of his rivals. He added, “it never felt so good being shot at, it’s because they didn’t think of it first, and they don’t have a credible plan.”

“Because we put a bold solution on the table, some of my fellow contenders have accused me of being too bold,” he later told the crowd of 100 who turned out for the hastily-organized event. “This economy cannot wait. It is on life support. We need a bold solution.”

Even as Cain tries to formalize his policy ideas, his campaign still has the look and feel of a disorganized start-up. The event here, at first billed for a 9 a.m. start, didn’t begin until 10:30, leaving some Republicans who wanted to see Cain forced to stand in the cold or return to their cars and wait for an hour.

Unlike other campaigns, which usually flood the areas around their events with signs and banners, it wasn’t clear Cain was holding a rally in this area of downtown Detroit until one arrived at the train station.

But Cain sounded like a man who feels he could win the nomination.

“There are two things that some people haven’t figured out yet. Some of them are still asking the question: ‘How is Herman Cain doing so well in the polls? He doesn’t have the greatest amount of money. A lot of people didn’t even know who he was,” Cain said. “I can tell you what’s happening that they don’t get yet. No. 1, the voice of the people is more powerful than the media. Secondly, message is more powerful than money.”

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