FRONT PAGE CONTRIBUTOR
Herman Cain’s Unrealistic Economic Plan
One of the first things you learn as a young infantry officer is that hope is not a method. You don’t hope the enemy behaves in a certain way. You don’t hope support shows up at the right time. You don’t lead an operation that is based on hope.
There is a lot that is superficially attractive about the plan. It’s shortcoming is that it relies entirely on hope. Not just any hope but a hope that runs contrary to everything we know about human nature and the way government operates.
For the sake of argument we’ll stipulate that the Plan will do all those things Mr. Cain claims. It will produce more revenue in a fairer way than the current system. I don’t disagree with that. Sending regiments of Cossacks out to pillage the countryside would achieve the same purpose.
The plan is unrealistic for two reasons: Congress must pass it and Congress must sustain it.
Anyone can see the inherent difficulties in passing the bill. Between the armies of lobbyists who would oppose the bill and the armies of lobbyists trying to make the plan an 10-9-4.3 Plan to help their clients the odds of passage in anything resembling Mr. Cain’s proposal approach zero. Mr. Cain is not going to have 60 votes in the Senate to prevent a filibuster and even absent a filibuster the responsibility for taxation lies in the House of Representatives. The House rarely, if ever, shows deference to a president, even one of their own party, when it comes to this core function. Again hope is not a method.
Of course, I could be wrong on that because were I a Liberal Democrat I’d vote for this plan for a simple reason: it provides an additional source of taxation.
The idea that fiscal conservatives who have lambasted no less than Tom Coburn for not being sufficiently anti-tax thnk that giving the federal government a brand new tax, a national sales tax, is a good idea continues to baffle me.
You don’t have to be a genius to see how the 9-9-9 movie will end. It will be 10-10-10, 11-11-11, and so on because the plan makes no provision for capping increases.
I know, Mr. Cain has claimed the bill will require 2/3 vote of both the House and the Senate to change it. But just as he doesn’t have a vote, literally, in what the Conress might pass in the way of a revenue bill, he doesn’t control the rules the House and Senate will use to raise or lower the rate.
Absent a Constitutional amendment, which Mr. Cain is not advocating, there is no mechanism to prevent the Congress from changing a 2/3 vote requirement to a simple majority vote in some subsequent piece of legislation.
Conservative support for a sales tax or a VAT has historically been predicated upon the concurrent repeal of the Income Tax Amendment. That this long standing principle should be tossed aside makes no sense.
Mr. Cain’s plan has an appeal that some wonkish 57-point plan never will. That it is appealing doesn’t mean it is either workable or a good idea. The 9-9-9 Plan, even if it passes Congress in the form favored by Mr. Cain, simply cannot survive constant Congressional tinkering any more than did the original income tax. Plus it gives the federal government access to a revenue stream that it currently does not have. So it is hard to understand the excitement this plan is generating.