So much for simple. After heavy criticism of his 9-9-9 plan, Herman Cain is retooling it to look a whole lot more like the current income tax code. Cain plans on adding empowerment zones for poor neighborhoods, which is no surprise, but also adding tax brackets and exemptions. Cain’s caving will not satisfy Republicans like Michele Bachmann who said everyone should pay taxes and then attacked Cain’s plan, or Democrats who have portrayed Cain as the devil for trying to come up with a fairer system. What it does do is knock the legs out from under Cain’s campaign by removing the one base of support he could count on: the Fairtax, limited government crowd.
Another issue for Cain’s new progressive approach to his formerly flat 9-9-9 plan is that he proves himself wrong in his assertion that it would be a solid, unchangeable plan that future Presidents couldn’t tinker with. One of the key elements to a flat tax is that it gets government out of the business of picking winners and losers, giving advantages to people in their districts, or buying votes through sin taxes and tax breaks for good behavior. With Cain’s empowerment zone approach, there is a risk of taxes being a political selling point to the extent that they are now.
The complexity of empowerment zones, brackets and exemptions for good behavior will bog this system down in compliance issues. The sales tax will basically replace the payroll tax on a business’s to do list, but with added complexities if that is possible.
Anyone with a “get rid of the IRS” bumper sticker may need to rethink Herman Cain.