Art Laffer and Paul Ryan both made news today by praising Herman Cain’s 9-9-9 economic plan. Since Cain has risen in the polls, his plan has been under quite a bit of scrutiny, from both sides. My biggest concern has been that third 9 – the national sales tax. Others feel the same way, the question being, how will they prevent future congresses and presidents from incrementally increasing that 9% sales tax? If that puzzle can be solved, it probably is a great plan. At least Laffer and Ryan think so.
Arthur Laffer sent a statement to Human Events:
The famed economist told HUMAN EVENTS that the proposal was pro-growth and would create the proper conditions for America’s economy to expand and thrive again.
“Herman Cain’s 9-9-9 plan would be a vast improvement over the current tax system and a boon to the U.S. economy,” Laffer told HUMAN EVENTS in a statement. “The goal of supply-side tax reform is always a broadening of the tax base and lowering of marginal tax rates.”
Added Laffer: “Mr. Cain’s plan is simple, transparent, neutral with respect to capital and labor, and savings and consumption, and also greatly decreases the hidden costs of tax compliance. There is no doubt that economic growth would surge upon implementation of 9-9-9.”
Laffer also said that “such a system provides the least avenues to avoid paying taxes, yet also maintains the strongest incentives for work effort, production, and investment.”
The Daily Caller spoke to Paul Ryan:
House Budget Committee chairman Paul Ryan says he “loves” presidential candidate Herman Cain’s signature “9-9-9″ tax plan.
Ryan told The Daily Caller in an exclusive interview that Cain’s plan is a good starting point for debate, and shows the GOP presidential campaign season has entered into a more advanced stage where ideas — not just personalities — have come to the forefront.
“We need more bold ideas like this because it is specific and credible,” Ryan said. “I’m more of a flat-tax kind of a guy.”
The budget chairman went on to say that ideas like Cain’s plan could help shape the debate over tax reform moving into 2013.
“It’s great to see such bold ideas,” Ryan told TheDC.
Those are huge endorsements for Cain’s plan, but I didn’t see any explanation of how to keep future politicians from turning it into 20-20-20, or 9-40-27, or any other combination. I still like Herman Cain, and would vote for him in a heartbeat, but that question does need to be addressed.
Update: See the comments below, on both sides of the issue. Notable is that there’s nothing to stop the current president and congress from raising tax rates and eliminating deductions. Hence, the president’s constant campaign for his “jobs bill” that would punish success.