999 tax plan does not solve economic problems
While reading Kyle Henson’s article “Cain’s Simplified Tax Plan is Step in Right Direction,” I could not help but agree with the sentiment that our tax system is in need of a radical reform, especially given the economic decline over the past several years. But Herman Cain’s proposed tax plan is not this reform. In fact, the 999 plan would be detrimental to our progress as a nation.
At its heart, the concept of Cain’s tax plan is incompatible with our economy. Capitalism depends on the existence of a disparity of wealth. Therefore, it should be logical that our taxation system account for that disparity. As a flat tax, Cain’s plan does not account for this fact, as seen in the non-partisan Tax Policy Center’s analysis of the 999 plan. Taxes would increase for the bottom four quintiles of the population, while they would decrease for the top 20 percent. Economist Jared Bernstein put this in numerical terms: Citizens within the second-highest quintile would pay an extra $4,299 on average, while the top quintile would have an average tax cut of $14,442. For the top 0.1 percent, the decrease would be over $1.3 million.
Even if wealth in our nation was previously equally distributed, these number aren’t very reasonable. The wealth analysis of G. William Domhoff, a research professor of sociology and psychology at the University of California, Santa Cruz, should also be considered: It demonstrates that there is already a huge disparity of wealth in this nation, with 85 percent of the nation’s wealth concentrated in the top 20 percent.
Cain’s reactionary 909 plan, which exempts people at or beneath poverty level from the 9 percent income tax, raises even more issues about the plausibility of his tax program. With Cain’s 999 plan there were already concerns — not least by economist Bruce Bartlett, who held senior policy roles in both the Reagan and H.W. Bush administrations — that the plan would not generate enough revenue. Under this new plan, the tax burden falls almost entirely on the middle class, or at least more so than it currently does.
Also, the implications of the 909 plan are that anyone above the poverty line, regardless if they’re $10 or $10,000 above, would have to pay the full 9 percent income tax. The 909 tax is not so much a remedy but an obfuscation — there will still be people hit with a tax hike in a time when they are already struggling to survive.
Perhaps what is most frightening about Cain’s policy is Cain himself. His public desire to abolish federal welfare and his public derision of poor people — stating that if people are poor, it’s their own fault — is indicative of a mindset that is completely ignorant of the subtleties of a capitalist economy. There are many who view capitalism as an evil system based solely upon greed. But the fact is, capitalism is only an economic idea. It is people like Cain, who have no compassion for the necessary poor in a capitalist society, causing this nation to be so fractured.