Cain: My 9-9-9 plan will raise taxes on some

WASHINGTON Sun Oct 16, 2011 6:21pm EDT

Republican presidential candidate Herman Cain delivers remarks to the Family Research Council's Values Voters Summit in Washington, October 7, 2011. REUTERS/Jonathan Ernst

Republican presidential candidate Herman Cain delivers remarks to the Family Research Council's Values Voters Summit in Washington, October 7, 2011.

Credit: Reuters/Jonathan Ernst

Related Topics

WASHINGTON (Reuters) - Republican presidential candidate Herman Cain acknowledged on Sunday his "9-9-9" tax reform plan would raise taxes on some Americans but denied criticism it would help the rich while hurting the poor.

"Some people will pay more. But most people will pay less," Cain, a former chief executive of Godfather's Pizza who has never held elected office, said on NBC's "Meet the Press."

The acknowledgment of higher taxes could give ammunition to a growing number of Cain critics, including anti-tax crusader Grover Norquist, who oppose his plan.

Cain entered the presidential race as a long shot but has recently shown signs of front-runner status with backing from fiscally conservative Tea Party activists who believe his plan would lead to lower federal taxes.

The 9-9-9 plan would replace the complex U.S. tax code with a 9 percent income tax, a 9 percent corporate tax and a new 9 percent national sales tax.

"Who would pay more? The people who spend more money on new goods. The sales tax only applies to people who buy new goods, not used goods. That's a big difference," Cain told NBC.

Later in an interview with Reuters, Cain predicted his plan would spark economic growth because of its flat tax on corporate profits.

"It's going to boost this economy quickly because of the last 9. ... If businesses can subtract purchases and capital expenditures ... that's what's going to spur this economy because businesses are going to say, 'we love this.'"

"It provides certainty," he added. "Businesses only want to know what the ground rules are."

General Electric CEO Jack Welch weighed in on Cain on Twitter. "Watching Herman Cain on Meet the Press. His no BS clarity is so refreshing," Welch tweeted. NBC's parent company, NBC Universal is jointly owned by Comcast and GE.

FUNDRAISING LAGS RIVALS

Cain placed first in an NBC-Wall Street Journal poll among Republican candidates and second in a Reuters Ipsos poll but his fundraising totals in the third quarter were far behind the leading contenders -- former Massachusetts Governor Mitt Romney and Texas Governor Rick Perry.

President Barack Obama, a Democrat, faces a rough fight for re-election in November 2012, but his Republican rivals must convince voters they have a better plan to create jobs and get the economy moving again.

Despite popularity in some quarters, Cain's 9-9-9 plan is under fire from across the political spectrum and independent analysts who say it would raise taxes on the poor and middle class.

And Norquist said in a recent interview with Reuters Insider he worries that all three taxes in Cain's plan could be raised in the future.

The Wall Street Journal warned a national sales tax -- a fixture of many western economies -- could raise taxes on goods in some areas to 17 percent or more when combined with state and local levies.

"If you add them together, yes, you'd get that number," Cain said on "Meet the Press."

But he dismissed the idea of considering state taxes alongside the 9-9-9 plan as "muddying the water" because federal taxes would go down in most cases.

He said the plan's elimination of "invisible" taxes now paid by manufacturers under the current system would lead to lower retail prices.

"In reality, those taxes go away, so the prices of goods don't go up," Cain said. "They actually go down based upon competition. Competition drives prices down."

(Additional reporting by Emily Stephenson)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (16)
CDN_Rebel wrote:
9-9-9 sure sounds good, but 9% VAT is really huge… 10-15-5 makes a lot more sense if he wants a clean/clear-cut tax plan. It also doesn’t directly address capital gains tax, which I figure means that he would probably try to eliminate it or lower it to 9% as well.

Oct 17, 2011 6:23am EDT  --  Report as abuse
TxLibertyMan wrote:
Only suckers buy into this 999 crap. This shows Cain’s naivety in regards to the political realm. He actually believes and says that when questioned about the taxes of the 999 plan being raised he said says, “They could be but won’t”. Anybody with half a brain cell knows that the Gov’t given a power extorts the people with it. Why on EARTH would this new system of “revenue” be ANY different!?!?!? This guy is an Establishment man through and through! Keep the status quo but wrap it in a new package.

Oct 17, 2011 8:00am EDT  --  Report as abuse
powerwhip wrote:
Any medium pizza just 9.99! Make it simple enough even teapuplicans can understand it, damn the details.
It’ll be a cold day in hell when the gop nominates a person of color, now they have an excuse not to, higher taxes on “some”.

Oct 17, 2011 8:48am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.