Cain's 9-9-9 the Cure for a Convoluted Tax Code
Arthur Laffer on the stimulating powers of lower taxes
By Newser Editors, Newser Staff
Posted Oct 19, 2011 2:25 PM CDT
Herman Cain participates in the Republican presidential debate in Las Vegas.   (Getty Images)

(Newser) – Herman Cain’s 9-9-9 plan has come under a lot of fire, but Arthur Laffer, of the Laffer Center for Supply Side Economics, thinks it will “right the wrongs of our federal tax code.” These days we’re mired in “ever-more arcane tax codes” that seek not just to raise revenues but to redistribute income and encourage and discourage various industries and behaviors, he writes in the Wall Street Journal. “The whole purpose of a flat tax, a la 9-9-9, is to lower marginal tax rates and simplify our tax code.”

With marginal rates down, Laffer thinks “both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs.” Tax revenues will ultimately increase, thanks to all that economic growth. Individuals and businesses could spend less hiring lawyers and accountants to navigate tax law, and will thus actually pay their taxes instead of ducking them. “Some tax revenues at low rates is a heckuva lot better than no tax revenue at high tax rates.”

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Showing 3 of 32 comments
gzuckier
Oct 20, 2011 8:56 PM CDT
oh, Laffer likes it, well then. We have the answer, folks, no more calls, please.
Heatmiser
Oct 20, 2011 9:15 AM CDT
I think it's a non-issue at this point, because Cain seems to be doing a lousy job of explaining the plan to the public. Nobody seems to be aware that the payroll tax & the capital gains tax would be going away altogether, which is a crucial part of the plan. Everybody is focused only on the 9% sales tax, & on top of that, they seem to be assuming that everyone will spend every cent they make on taxable goods.
mrag
Oct 20, 2011 2:44 AM CDT
To quote M Yglesias "But basically you’re talking (Cain's 9-9-9) about a nice tax cut for the $200k-$500k crowd and a really big tax cut for people who earn more than that, plus mid-sized tax HIKES for everyone else." I expect this trash from Cain, he is running for office. For the WSJ to even give Laffer space says everything I need to know about them. But then maybe we should give the rich even more? A nice, simple graph at: http://preview.tinyurl.com/6atk5fq