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Cain blows up 999 Plan with “Empowerment Zones”

By: Paula Bolyard (Diary)  |  October 14th, 2011 at 12:23 AM  | 

RESIZE: AAA

I’m not going to lie. I was getting close to hitching a ride on the Cain Train.  The 999 plan’s simplicity was appealing and almost mesmerizing. Paul Ryan giving it some love was the cherry on top.  Ryan told the Daily Caller:

“We need more bold ideas like this because it is specific and credible I’m more of a flat-tax kind of a guy.”

But then I heard Cain’s interview with CNN’s Erin Burnett (transcript) and Cain said this in response to a question about affirmative action:

“I believe in empowerment zones. Most of the unemployed black Americans in this country are in these mostly economically depressed areas. It could be, and I’m only using this as an example, because we haven’t finished establishing the parameters yet. Instead of in a designated empowerment zone, it being 9-9-9, it could be, as an example only, 3-3-3.

What this does, because you have a lot of African-Americans located in cities like Detroit, disproportionately, it would encourage businesses to stay in business there or to move there. It would encourage people to work there, because if you live in the empowerment zone, you’re going to pay a smaller percentage in taxes.”

[exchange starts at 2:25]

And so we have the first tax loophole. So much for the flat tax.

Rich Lowrie, Cain’s economic advisor, told the Bangor Daily News that critics of the 999 plan should withhold judgement until they’ve seen “the empowerment zone piece that we are rolling out next.”

This is likely in response to criticism that his plan would disproportionately affect the poor (whether real or perceived). And frankly, I think the only way Cain’s plan could ever pass would be for there to be some sort of progressive aspect to it. Whether that means a lower rate for the bottom 5% or an exemption of some sort for the lowest wage earners, I just can’t imagine a scenario where a 9% sales and income tax on the poor could ever pass.

But “empowerment zones” smack of big government intervention and take us right back to Big Brother picking winners and losers. It begins the process of a sprawling, complicated tax code with a myriad of rules, regulations, and loopholes.  If Cain is opening that door this early in the process, his plan is doomed. D.O.A.

COMMENTS

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  • Danielle Davis (ocleverone)

    I agree with you.

    I have my concerns that there is no cap on the 9/9/9 plan and that we are basically trusting that future lawmakers will do the right thing to not turn this into a 20/20/20 tax plan.

    We decry this Congress for leaving our children and grandchildren broke with future tax hikes but seem to accept that they will square this plan later on down the road.

    Congress has never met a dollar it didn’t want or an agency that it didn’t need.

    • capitalistpig

      black-get taxed less
      white-get taxed more.
      I have a huge problem with this,and im not even white..

      • 6eorge Jetson

        for the zone to retain it’s high unemployment-qualifying status </RollingEyes>

    • 6eorge Jetson

      allow for a sales-tax multiplier on the individual in the future.

      • http://dreamsfrommyforefathers.com RoguePolitics

        How long before ID cards are issued allowing for discounts or multipliers based on income, race or perhaps party affiliation used to determine sales tax rates or income tax rates, etc.

        How many folks have handicap placards because of who they know?
        How long before political connections get sales tax discount cards?

        How long before “empowerment zones” are the space within 10 feet of a union thug or party staffer?

        Hey mom, look at me. I’m an empowerment zone….

  • lineholder

    Cain may have expressed this in the context of how it will influence primarily black people, but my understanding so far is that empowerment zones are targeted at areas where unemployment is the highest. Granted, that does include a lot of inner city areas, so it is likely to have an impact on a lot of black communities, but it isn’t limited to only black people who would be affected by this.

    Still, I will be glad when the specifics on empowerment zones are released, because if it pertains to what I’ve read so far, it’s a fairly strong one-two punch at addressing our current economic situation.

  • rightwingmom52

    would be largely based on what Art Laffer outlined in his WSJ article last month. I’m not a subscriber, so I couldn’t pull the entire article, but I found a link that gives the bullet points here:

    In the Wall Street Journal this morning, economic guru and Libertarian Arthur Laffer, co-author, with Stephen Moore, of “Return to Prosperity: How America Can Regain Its Economic Superpower Status,” offers these suggestions for putting Americans in inner cities like Detroit back to work.

    Create totally tax-free enterprise zones. Make those enterprise zones the principal residence of the employer. The employer’s business wouldn’t have to be headquartered in the enterprise zone to take advantage of the elimination of the employer’s portion of the payroll tax, the place where the work is actually done would have to be in the enterprise zone.

    Suspend all federal and state minimum wage guarantees in the enterprise zones. If not for all employees, then at least for employees under 30. Use these jobs as training opportunities.

    Loosen all government regulation in enterprise zones. Reduce every regulation that restricts business growth, including building codes and mandated union membership rules.

    Tax profits within the enterprise zones at one-third the regular tax rate. This would give investors motivation to support these enterprises.

    I heard Mr. Laffer address these in a radio interview today, and my take was that it’s a huge union buster.

  • LibertyWins

    he throws a curve ball.

    I can’t wait to see the details. The more I hear, the more I get concern.

  • http://whattoreadtoday.blogspot.com/ Paula

    aren’t we just getting back to the status quo of complicated tax code? It will start with jumping through hoops to qualify for the empowerment zones and spread from there.

  • rightwingmom52

    in the details.

    Not to threadjack here, but I very much enjoyed your part 2 of Occupy Cleveland. I had my own little run-in with the 5 who gathered to occupy a street corner in downtown Birmingham today. If you care to take a look, I commented over on EE’s open thread. Your 12 today was a crowd compared to our 5. LOL.

  • lineholder

    I’m interested to learn more about the details myself. I do think that combined with a type of tax reform that would help to encourage growth and development in the private sector, it could be a very strong program. Not ideal by any stretch of the imagination, mind you, but better by far than any New Deal type of government intervention would be.

  • Green_Lantern

    In my own sarcastic sort of way.

    So we have a whole bunch of bogus tax loopholes now, right? So Cain proposes a kind of flat tax. And then he adds one loophole.

    Oh no! We can’t have a tax system with a loophole! Now I am somewhere to the right of Genghis Khan. But regardless of what you think. A tax system with one loophole still sounds better than one that’s been around over 70 years, and all the loopholes it has gathered like dirt in a snowball.

    What’s the worst that could happen? They would have to fix it again in 70 years.

    I’m trying to get us to the next 10 years as of this point is all I’m saying.

  • http://whattoreadtoday.blogspot.com/ Paula

    Your story is hilarious! Way to go trying to engage them. How is it that these people all have money for cigarettes?

  • Scope

    Here is an article from a black magazine on the web. It goes through all the disparities that still exist between the blacks and the whites, despite the affirmative action laws. Here is a paragraph that the writer includes on how to help the inner city black populations-

    “Empowerment zones and economic development grants for indigenous inner city residents should be appropriated from the federal level, and incentives should be increased for businesses that want to re-locate in urban areas, low income environments.”

    I believe that the current sentiment within conservative circles is that we must stop giving people a hand out, but to work on giving people a hand up. We believe that everyone has the opportunity to advance themselves, and to prosper educationally and economically. That goes for people of all colors. There are poor white people, there are poor black people, there are poor hispanic people. Many poor people who want to do better for themselves don’t ask for particular handouts, or benefits, or advantages in order to advance their life station. There are many people of all colors that had the will and found the way through hard work and perseverance, who had the personal responsibility to get to where they have.

    Barack Obama has made it his most important effort to empower the poor by redistributing the wealth from the high earners to the lower earners. He has successfully kept the low earners on government handouts, as if he keeps them on the “plantation” and dependent on the government, that equals votes for him and the liberals, for their most basic needs. He has successfully awoken the giant of class envy.

    Herman Cain said, not long ago, that he would get at least 25% of the black vote. Is his proposal for tax breaks for “Empowerment Zones” his method to winning over those voters? All while he hurts those same poor people the hardest with the rest of his 999 plan?

    Sorry, but, I see his Empowerment Zones as still another method of government redistribution to a particular area or segment of the country as yet another means of furthering the Affirmative Action program, which includes all minorities of any color.

  • jackdaniels11

    And one of them was a rape victim and another was a rapist? That’s just sad. The left couldn’t stop chuckling about the Tea Party. How come Jon Stewart, Bill Maher, and David Letterman didn’t save a few zingers for the group I call “The Flea Party” (hat tip to Ann Coulter for that one).

    The Flea Party just hops around and sucks blood out of any living host it can find. If you don’t have money or blood to donate, apparently, they rape you.

  • Matthew Morris

    It would seem that they are rooted in geography. That does keep things pretty simple. I suppose a Senator/Congressperson might wish to lobby for an empowerment zone in their state/district.

    (just thinking out loud here…) It would make sense if there were some sort of “cost” to this such that the lobbying will be done only when it really is necessary. And that is be temporary. But I must say…. wouldn’t it suck to be just on the outside of that zone’s border?

    Hmm… maybe scratch that plan Perhaps what is needed is empowerment states. The cost to be an empowered state? Less benefits.The bare minimums. All you get is the umbrella protection of the United States Armed Forces, Federal courts, FBI….. Hey! I might just move to an empowerment state! Maybe there could be states permanently empowered!

  • tommyc

    The original Idea of loop holes was to have a positive impact on what ever the loop hole was targeting. These tax expenditures have ballooned into what is now a 70k page tax code. Many of these loop holes are abused and miss use for purposes other than the ones they were originally intended.

    Empowerment zones seem like the would be less easy to manipulate and effectively target areas with high unemployment. Also it helps make it politically acceptable able when going through congress.

    Q: I don’t really to see a down side to it other then each congressman wanting his own empowerment zone, but Cain has said there will be guidelines for what Cain qualify. Does anyone see a way geography based empowerment zones can backfire like so many tax loopholes have?

  • APA Guy

    We are the party of earned prosperity, not the party of “empowerment”. A man empowers himself through hard work and achievement, not the federal government “empowering” him.

    Bad move here for Cain…his 9-9-9 was just beginning to gain a little steam and he unleashes this nonsense.

  • deuke

    Mr. Cain has one main goal with his “999″ and now these empowerment zones – put people back to work; revitalize the economy. The man is an economic guru – don’t you all get it? This is his expertise – do you really think he’s going to put some proposal out there that is ridiculous on its face, as some of you have suggested?
    With 14 million people out of work; smaller businesses wringing their hands because they’re having a hard time reinvesting, or ‘taking care’ of the employees they have, you’d think everyone would jump on the wagon that jump starts the economy. Is it the end-all? Maybe not, but I’ve yet to hear any plan from the Obama administration, or the Republican candidates that even come close to a real plan that could be the answer to many prayers.
    Get behind this man, full force, and watch the U.S. regain its footing – and believe me, we all must agree that we have been knocked clean off our feet, since the “sleeper” got into the WH.

  • Jim Tomasik

    This 999 plan was intended to garner him support from the flat tax supporters but it is not working.

    He has a huge pool of FairTax activists sitting on the side lines and flat tax supporters are just giving him the queer eye. This empowerment zone stuff is a very good reason for them to do that.

  • GregInFla

    Company A sets up its factory in a normal zone. Feds could accuse company of avoiding the nearby empowerment zone due to racial discrimination. This must not be allowed to happen, or this becomes the CRA of business world.

  • http://whattoreadtoday.blogspot.com/ Paula

    I see now that there’s a big difference. Once you put the word “fair” into the mix, funny things can happen.

  • jackdaniels11

    “empowerrment zones”? Hmmm. Sounds mighty Clintonian to me…

    http://en.wikipedia.org/wiki/Empowerment_zone

    As a matter of fact, it is a Clinton idea: increasing taxes on the residents of prosperous states like Wyoming and Florida so that areas like Detroit, Los Angeles, and New York could have some more of their money to spend. And there was very little accountability on what was done with the money. So a lot of the money went to waste, fraud, abuse, and union handouts like the sneaky “Teacher Next Door” program. http://www.governmenthousing.us/teacher_program.php

    What will Candidate Cain come up with next? Busing kids from D.C. to Falls Church so that they can get a good education?

  • Xasteius

    Steve Forbes, who as endorsed by Herman Cain in the 2000 GOP race, is now working for Rick Perry as economic advisor.

  • http://whattoreadtoday.blogspot.com/ Paula

    has been that campaign staffers will choose the nominee. Whichever candidate the staffers have all fled to at the end wins.

  • capitalistpig
  • Matthew Morris

    unforced errors

  • MikeG (Icythus)

    I’m going to have to disagree with you on this one. I don’t think advocating for “Empowerment Zones” is an example of Big Government thinking at all. I do not see how reducing the government’s influence in certain areas to an even greater degree than in the nation as a whole is somehow an example of creeping statism. I think it is an open acknowledgement of the fact that the effects of government interference in the economy and society have had disproportionate effects in certain areas and among certain populations, such as out inner cities, and therefore require a stronger dose of medicine to set things right.

    Ronald Reagan and Jack Kemp championed the idea of “Enterprise Zones” back during the 1980 campaign, and there is no substantive difference between what Ronaldus Magnus proposed back then and what Herman Cain is advocating today. In fact, it would not surprise me if the latter is cribbing off of the former! I see your point about the government picking winners and losers, but I still think you are off-base on this one. “Empowerment Zones” are no reason not to support Herman Cain.

  • http://www.hakubi.us/ Neil Stevens

    .

  • jackdaniels11

    Because President Cain (shudder) would not be able to pass 9-9-9 without the consent of Congress and Congress will never go for it. So he’d first have to get rid of any part of the constitution that gave Congress the power to lay and collect taxes. THEN, he would have to pass a constitutional amendment that would give him dictatorial powers to lay and collect taxes without the consent of Congress.

  • gator_hoo

    Don’t forget, part of the 9-9-9 plan is a sales tax. And an “empowerment zone” will have borders. If I have a business near, bur not in an “empowerment zone” then I automatically have a 6% increase in the price of my goods over a similar business in the zone. Big issue.

    Secondly, By endorsing “zones” as an exception, it opens up all sorts of shenanigans. For example, “empowerment industries.”

    No thank you.

  • gator_hoo

    As soon as you have the first empowerment zone, every major corporation is going to buy a small office there and recharter in the economic zone. That is not to say they are going to move their headquarters there, but just have a physical address there so that they can claim they are chartered there.

  • explodinghead

    I think empowerment zones once again give crony capitalists the ability to choose winners and losers. Their chosen support groups win and anyone who is not in their chosen demographic loses. If you are going to have a flat tax based system, (if 9-9-9 really is phase 1 moving towards this) then no-one should be chosen as winners or losers. Obama has shown us what happens when he picks winners.

  • Scope

    keeping the minorities on the plantations, as they’ve been called. Seems we now have a Republican proposing a similar idea, but calling them “empowerment zones.” I wondered how Cain was going to gain support from all those “braindead” blacks that he said he would take away from Obama.

  • Common_Cents

    SNL just did a skit on the 999 plan as well.

    Cain also I think missed an oppty in the interview when he said he is not African American, but a Black American. A good step but wish he would have said. Huh? I am an American. Period.

    The media is trying to play the gotcha game with Cain. He is refreshingly honest and people should give him a little leeway on “gaffes” because of it.

    Watch out what you wish for, or you’ll get a super slick politician that stands for nothing.

  • nick2253

    nt

  • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

    not! Mitt? Please.

    Perry? Check out the “exceptions” he fostered in state law to attract certain kinds of businesses.

    You will search in vain for a conservative Utopia. In fact, that there is no Utopia this side of Eden is a main conservative tenet that we preach to the libs. We need to learn it too.

  • Justin Spagnolo (standardcandle)

    no text

  • Green_Lantern

    Maybe I wasn’t clear. I support Herman Cain and the plan. He’s been more consistent than Romney (not hard to do) or Perry. What I’m saying is, who cares if there are one or two addenda to his rule. It’s better than 10,000 addenda, which is what we have right now.

  • jackdaniels11

    some more information before I answer that question.” First, he has to talk to his secret, unnamed advisers. Then, he will answer questions like, “Are you for or against increasing foreign aid?” “Would you exchange prisoners with terrorist networks?” “Won’t your 9-9-9 plan just raise taxes on the poor and middle class?”

    I have never seen a presidential candidate, much less a front-running candidate, so unable to answer basic questions about what he will and won’t do as president.