Politico reports that the cash settlement for one of the women accusing Herman Cain of sexual harassment bears the date: September of 1999. No joke.
On a related note, if you missed Michelle Cottle’s Daily Beast piece from a few weeks back about Cain’s obsession with numerology (and one number in particular), it’s definitely worth a read.
Herman Cain, it may be your moment - as Decoder wrote yesterday, Cain is leading the entire GOP field in the latest Wall Street Journal/NBC poll.
Want to understand what all the fuss is about when it comes to Cain’s “999” tax plan? Here you go.
1. The Plan itself. What may surprise many is that the “999 plan” - a 9 percent personal income tax, 9 percent national sales tax and a 9 percent business tax - is actually only phase two of Cain’s overall tax vision. In phase one, Cain would cut individual and corporate tax rates to a maximum of 25 percent. Then, in phase two, he would implement the “999” rates. Phase three is the implementation of a “fair tax.” That tax would amount to a single national sales tax (typically formulated at 30 percent) in lieu of all other taxes. Why not just go straight to the fair tax? Cain writes, somewhat nebulously:
Amidst a backdrop of the economic boom created by the Phase 1 Enhanced Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.
2. What do economists think about this plan? There are plenty of economists with plenty of opinions, but The Christian Science Monitor’s Ron Scherer caught up with a boatload of them. In general, they aren’t very bullish:
“Every CEO says the reason they’re not hiring is because they’re not seeing demand,” says Rachelle Bernstein, a vice president and tax counsel at the National Retail Federation, a lobbying group, in Washington. “An additional tax on consumer spending will negatively impact that already weak demand.”
Some economists worry the plan would result in national tax cheating since retailers might offer items for sale at two different prices: one with tax and one without tax for people paying with cash. “The incentive to cheat is huge,” says Nigel Gault, chief US economist for IHS Global Insight in Lexington, Mass.
Mr. Gault says this is the reason why most countries have enacted a Value Added Tax (VAT) that gets tacked on during the different phases of producing a product. As each tax gets added on, there is an incentive to pass it on.
Since Cain would eliminate the business deduction for labor but not investment, the plan would most likely cause distortions that might add to the unemployment rate, says [John] Silvia [chief economist at Wells Fargo Securities in Charlotte, NC]. “This would favor heavy industries that use lots of capital and penalize companies where labor is significant and capital is small,” says Silvia. The entire service sector would be disadvantaged, he adds….
But probably the largest economic impact would be shifting the tax burden. “It’s a huge tax reduction on the very top and a huge tax increase for moderate and low income people,” says Michael Graetz, a professor at Columbia University who has testified before Congress on taxes.
The Washington Post’s Fact Checker Glenn Kessler looked into “999” as well, eventually giving Cain “Three Pinocchios” for saying most Americans would see their taxes decline under his plan.
Just like it would be wrong to claim pizza is a low-calorie meal, Cain’s description of the plan’s impact on working Americans is highly misleading.
3. Who helped him gin this thing up, anyway?
A good question. The only economic policy adviser Cain has named is a guy named Rich Lowrie (here’s his LinkedIn profile) whose economic credentials are, shall we say, limited. For one, he doesn’t have an economics degree, although Cain called him an economist during the debate Tuesday night. Second, his professional experience extends to helping run a Wells Fargo wealth management division outside of Cleveland, Ohio, and sitting on the boards of various conservative economic groups. Cain has refused to offer up the names of any other advisers.
4. What are Republicans saying about the plan?
Reaction on the right could be described as generally positive but with a host of caveats. As one might imagine, the best part of the plan, in the eyes of conservatives, is lower tax rates. The main objections include the fact that by adding a new 9 percent national sales tax, Cain’s plan gives the federal government a new revenue stream which, some argue, would inevitably lead to more government and/or more taxes.
An analysis by Tea Party group FreedomWorks put it thus:
Mr. Cain’s 999 plan is on the right track with its goal of a lower, flatter, simpler, fairer, more transparent tax system. Nine percent would be a wonderful top rate for the income tax, compared to today’s 35% top rate. And let’s face it, abolishing the payroll tax and the death tax would simply be awesome.
But adding a national retail sales tax on top of the federal income tax (even a flat tax) is a bad idea, because it creates the infrastructure for a federal-level, European-style [value-added tax, or VAT].
And if Cain’s 9% personal flat tax failed to remain flat (as happened with Ronald Reagan’s promising but ultimately failed 1986 tax reform), we would end up with the worst of both worlds: a confiscatory income tax and a job-crushing VAT.
But while there may be some qualms over the plan, there’s much greater enthusiasm for the plan’s messenger. One blogger at conservative web forum RedState notes that Cain’s ability to sell his plan to the American public, whatever its flaws, is a positive thing in and of itself.
Yes, that it is appealing doesn’t make it workable or a good idea. But it does make it an appealing idea. Which is a helluva lot better than the alternatives we have so far. You’re not going to find crowds at Romney rallies chanting “59 Points!” or even understanding what the hell is in his 160-page economic plan. (Although, a Romney rally where the crowd did chant his entire economic plan would be akin to a Buddhist funeral ceremony… hours and hours of chanting….) Perry’s economic plan is easy to understand, and has a built-in slogan… oh wait… he hasn’t released one yet. Nevermind then…
There’s a deeper point to be made here. Cain often says on the stump that his job as President will be to educate and inform the American people, because “If people understand it, they will demand it.”
Photo: Republican presidential candidate, businessman Herman Cain is greeted by lawmakers at the statehouse in Concord, N.H., Wednesday, Oct. 12, 2011. (AP Photo/Jim Cole)
Good morning, America! If you missed the GOP presidential debate last night about the economy (well put on by the Washington Post and Bloomberg), here are five pieces from our liveblog coverage with Shortformblog that will tell you all you need to know.
1. By and large, the tone of this debate was far different than the others (JVBrewer, too!). The candidates were seated around a large wooden table, giving the entire thing a more intimate feel.
The moderators did a great job of speeding the questions along, and while Ron Paul and Rick Santorum were hardly well served, the entire evening did feel serious and engaged where some of the other debates felt shlocky and crusted over with social media doodads.
2. Most memorable line of the evening: Herman Cain responding to criticism of his “999 plan.” Or was it Jon Huntsman saying the “999 plan” made him think of a pizza deal? Or was it Jon Huntsman’s daughters laying a Twitter smackdown on Mitt Romney over China?
3. There was a ton of talk about the Federal Reserve. Newt Gingrich kicked it all off with a long diatribe about how Ben Bernanke, former Democratic Senator Chris Dodd and Democratic Congressman Barney Frank (Mass.) are all criminals.
Herman Cain also ripped Bernanke then later said he admired Alan Greenspan, which drew immediate rebuke from Ron Paul ("Alan Greenspan was a disaster") and likely cost Cain with some of the professional, Wall St. Republican set.
4. Everybody is going bananas over “999.” Herman Cain’s tax plan calling for a 9% federal income tax, a 9% sales tax and a 9% corporate income tax was at the center of the debate. There are a number of moving parts here, but if you only take away one thing about it from last night let it be that everybody is going to be taking shots at 999 in the weeks ahead.
The power of Cain’s plan is its simplicity, as the Washington Post writes this morning. But if the devil is in the details, to paraphrase Michele Bachmann’s strange criticism, the next few weeks will be about the details. (The CS Monitor already looked into the details, by the way.)
5. Who won and who lost? In Decoder’s view, Romney, Cain, and to a lesser extent Santorum all comported themselves well and gained from the debate while Perry, who many thought needed to distinguish himself, looked divinely uncomfortable. Shortformblog noted the primary process has gotten to the point “where the winners and losers are the ones who aren’t necessarily flashy, but well-polished and well-studied. Romney made it look easy; he’s well-polished and well-studied.”
The best from around the web:
"I just try to get up every day and do my job, and debates are not my strong suit,” the Texas governor told reporters following a post-debate party at a Dartmouth fraternity house."
Mitt Romney prospers in Republican debate, by Dan Balz, a highly-respected political writer for the Washington Post.
Republicans stretch truth in debate salvos, by Bloomberg.
Rick Perry loses Dartmouth debate, wins Beta house by The Weekly Standard. Apparently, Perry’s best performance of the night was well off camera.
You can find the liveblog of the debate from Andrew Sullivan, he of Newsweek/Daily Beast (and formerly of the Atlantic), here.