Herman Cain’s economic plan.
Presidential candidate Herman Cain has been talking for some time about his vision for tax reform and encouraging investment. The creation of private sector jobs is one of the keys to recovery; public sector ones or those propped up by government spending actually create a greater burden on the economy. This is his plan:
This is the worst jobs recovery since the Great Depression. If the Obama administration's aim was to merely tie for last place with the previous worst recovery, it would have created eight million more jobs, based on comparative data from the Bureau of Labor Statistics. If our recovery were more typical of the postwar era, as former Sen. Phil Gramm reported in April, we would have 14 million more jobs today.
"Cain's Vision for Economic Growth," also known as the 9-9-9 Plan, is founded upon three guiding economic principles: Production drives the economy. Risk-taking creates growth. Units of measurement must be dependable.
The plan begins with restructuring the tax code to include the broadest possible base at the lowest possible rate. The elements are:
A 9% corporate flat tax. Businesses would deduct purchases from other businesses and all capital investment. The resulting gross income is taxed at 9%.
A 9% personal flat tax. Individuals would deduct charitable contributions, then pay 9% on the rest of their income. Capital gains are excluded.
A 9% national sales tax. This levy would be placed on the consumption of all new goods. Used goods purchased would be excluded.
My plan would also permanently eliminate taxes on repatriated profits, as well as payroll taxes and the estate tax.
All of these measures would free up capital, spur production, and incentivize risk-taking, thereby fueling the economy and creating jobs. The plan has been designed to be revenue neutral initially, and then revenues would grow in line with the economy.
But these policies must be coupled with sound money. A dollar must be worth the same tomorrow as it is today. Stabilizing the dollar's value starts with the federal government taking significant measures to rein in its spending and pay down the national debt. Americans must be assured that the federal government will live within its means and get serious about eliminating our crippling debt. Repealing ObamaCare, Sarbanes-Oxley and the Dodd-Frank bank-regulation bill would be critical steps.
Finally, my plan promotes enterprise zones, also known as "empowerment zones." Coupled with tax reform and monetary stabilization, empowerment zones would revitalize inner cities by providing tax credits to businesses that hire workers living and working in underprivileged areas.
Each job lost today is not merely a statistic. Americans are struggling to determine whether to pay their mortgages or buy groceries, whether to buy school uniforms or pay the electric bill.
Such despair is unfitting for the greatest nation the world has ever known. After all, it is inherently American to work, to risk and to dream. Our government's policies should encourage that, not stifle it.
Mr. Cain, a Republican, is running for president of the United States. He is a former chairman and CEO of Godfather's Pizza and a former chairman of the board of directors to the Federal Reserve Bank of Kansas City.
Post a Comment