Move Over Keynesian Economics, Cainsian Economics For The Win!

(Via Sunshinestate Sarah) As politcal ads go, this one is awesome!

What I love about this ad is that after Herman Cain tells us he approves this ad, he lets us know “…but Obama doesn’t.” That one line sets up what this ad is all about. It’s simple and gets straight to the point. It tells you to go to 999MeansJobs.com and there it will explain what the 999 Plan will do.

Some people confuse the 9% Sales Tax as a VAT, it is not. The current sales tax is not a VAT and only charged at the retail point-of-sale and not when value is added.

Why is is such a great plan? You only have to turn to Art Laffer who can explain it better than me:



(Crunching The Numbers) In the recent past, federal tax revenues from the personal and business income taxes, all payroll taxes, and the capital gains, gift and estate taxes have averaged $2.3 trillion, while gross domestic product has averaged about $14.5 trillion. The total revenue from these taxes as a share of gross domestic product averages around 16%. Sometimes it’s a good deal higher, as in the boom of the late 1990s, and sometimes its lower, as in today’s “Great Recession.” But a number in the 16%-19% range is as good as you’ll get under our current tax code.

By contrast, the three tax bases for Mr. Cain’s 9-9-9 plan add up to about $33 trillion. But the plan exempts from any tax people below the poverty line. Using poverty tables, this exemption reduces each tax base by roughly $2.5 trillion. Thus, Mr. Cain’s 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax.





I couldn’t have said it better myself. I hate to just throw a block of text up in blockquotes but I know I can’t easily explain the plan, because I am not an economist like Art Laffer. I won’t even pretend that I am one. I suggest you read the whole article if you have to the time as it is a great read.


PS: Title inspired by comment made on HotAir.com.

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