Will 9-9-9 Hurt the Middle Class?

There's a lot of mish-mashed conservative talk out there about Herman Cain’s proposed 9-9-9 tax plan being a tax-hike for the middle class.  The latest came from Rick Santorum in last night's debate, in which he suggested that cutting corporate and income taxes to a flat 9% while applying a federal sales tax of 9% would equate to a tax increase for 84% of Americans, as reported in a recent tax analysis.  Exacerbating this travesty, he suggests, is that Cain’s plan allows no deductions for poverty stricken families and the middle class.

In trying to discredit Herman Cain, Rick Santorum discredits himself- by regurgitating scare tactics and broad, untrue statements akin to Obama's promise in 2008 to "cut taxes from 95% of American families."  

First, let's do some basic math.  Utilizing the current marginal tax rates, a family earning $75,000 annually finds itself in the 25% tax bracket.  With the progressive application of federal income tax, this tax is actually ~15% of wages.  This is 3% less than Cain’s suggested 18% that would be paid in federal income tax on wages earned and sales tax on items purchased.  Sounds like Herman might be giving the middle class a raw deal, huh?  Well, consider the payroll taxes that wage earners currently pay, and this same family will see an additional 7.65% of their wages garnished for Social Security and Medicare, for a grand total of 22.65%.  Cain’s suggested plan replaces these costs in the simplistic 9-9-9 plan, and this 18% is 4.65% lower than this number.

If I know anything about which number is lower than the other number, Cain’s 18% is a reduction in federal taxes for middle-class Americans, not a tax-hike.     

Second, consider that high corporate taxes account for added consumer cost, as companies generally pass these levied corporate taxes on to consumers in the form of higher prices.**  By reducing corporate taxes, prices will naturally fall for competing companies in multiple areas of production.  You don't have to call it "cutting taxes for the middle class" if that doesn't agree with you.  Let's just call it, "a plan to let the middle class keep more of their hard-earned money."

Finally, it’s clear that Santorum didn’t think through his accusation that the plan “eliminates” deductions.  Cain’s website clearly states that deductions on both income and sales tax will be applied via “empowerment zones” to lessen the burden on those who might need such support.  Herman kindly reminded him of this on the stage, another well-placed nail in the coffin containing Santorum’s presidential ambition.

Herman Cain's 9-9-9 plan does have some questions surrounding it.  For example, the aboliton of current tax code would decimate the accounting industry, harming growth and GDP while costing American jobs.  Another concern I have is that retirees, who generally keep income low to avoid higher taxation of retirement accounts, might see increases in taxes paid, which could harm their retirement outlook.  But how are we to address these questions and find solutions if Herman Cain is constantly having to deflect untrue claims that 9-9-9 amounts to a huge tax-hike?

William Sullivan

** Argument supporting this economic reality can be found here.

Race Before Reason

Rick Santorum effectively destroyed Sharpton's moral credibility a couple of weeks ago. Santorum had suggested that, as a black man and a constitutional lawyer who should be sensitive about civil rights, our president should be against abortion in all forms. Sharpton took exception to that, and was subsequently beaten down by the logic that spewed forth from Santorum's mouth.

Santorum suggested that unborn children are legally allowed to be killed and siphoned from their mother's womb for the same reason that slavery was tolerated: an obscure legal distinction about the value of their lives in society.

This makes perfect sense to most people-- but not Sharpton. Al goes on to suggest that this scenario is entirely different, because it was not a state of biological development that caused the obscurity for blacks; whether a fetus or an elderly, blacks were considered less worthy of civil rights than others. He goes on to question the humanity of the fetus, whether it has a heartbeat, or developed lungs, is crucial to the abortion debate.

Really, Al? Even many of the pro-choice abortion advocates I speak with or encounter blogging concede the fact that the fetus, after a certain point in fetal development, is a human life. And for those that are still wacky enough to argue otherwise, science, not religious doctrine, handily proves them wrong. After twenty weeks or so, a fetus can sleep, urinate, and respond rapidly to stimulus such as a bright light. This would also suggest the nervous development to feel pain. Yet pro-choice advocates would still suggest they be eligible for legal destruction?

Going even further, (as I'm sure Al knows, being a fan of Obama and all) our president failed to vote against infanticide, or partial birth abortions. Maybe Al should think about that. Our president has advocated the murder of a fully developed fetus, so in Obama's eyes, biological development, or any lack thereof, obviously isn't any concern of his. It is apparently his belief that a fully developed child lacks not only civil, but human rights until the moment he leaves his first home in the womb.

Santorum's points about the fetus’ lack of legal humanity certainly stand true. What about his contention that the unborn children of the black community are bearing the brunt of the savagery?

Not only is this a tragic fact, but destroying the unborn children of the black community has even been suggested as public policy by leaders such as Nancy Pelosi! She has suggested that abortion be a vital factor in her version of a “final solution” to stemming the social cost of welfare. And we certainly don’t have to remind Al Sharpton about the racial tapestry of the welfare recipients in this country. He’s made quite a comfortable living exploiting poverty stricken blacks.

And his reluctance to pay taxes for his success presents yet another blow to his moral credibility, this one being rather ironic. On one hand, he insists that the rich should pay heftier taxes in order to provide for the blacks in poverty that he and Obama wish to keep aborting at holocaustic levels. On the other, he refuses to pay the taxes that would be redistributed among the masses that he supposedly champions.

There is nothing to revere in the “Reverend” Al Sharpton. Rather, he seems to lack any semblance of a moral compass, clinging to race-baiting and defense of President Obama rather than embracing morality and reason.

William Sullivan