For a $50K household, married couple, two kids, all income from earnings and standard deductions, the current tax burden is $8.3K. Under 9-9-9, that would grow to $13.5K, an increase of over $5,000 (hat tip: CCH, BS). The WaPo fact checker came to a similar conclusion. E Klein too.
(I expect that any minute now the Tax Policy Center will release a slew of data supporting these points with their much more detailed tax model.)
But Lowrie wouldn’t accept that conclusion. In fact, he asserted that their federal tax would be lower because they’d move from a 15% payroll tax to a 9% income tax. This, as I said on air, is “patently wrong.”
First of all, assuming they plan to exist, they’ll need to consume stuff, and thus they’ll also face the 9% sales tax. That already makes their tax rate 18%, higher than the 15%.
But as Michael Linden points out, and this is widely agreed upon by tax economists, the incidence of the 9% tax on business income (which denies businesses a deduction for wages paid) also hits them, which is why former Joint Tax Committee chief of staff Ed Kleinbard described the tax as a 27% payroll tax for families whose incomes derive from earnings (note that Lowrie is perfectly comfortable with the standard assumption assigning the incidence of the employers side of the payroll tax to the family—this one re the business tax is equally standard).
For a family with $500K, same assumptions as above, their tax bill would fall by $44K.
But where this plan really gets regressive is when you get up into the families who derive their income from non-labor sources. While the details of the plan are fuzzy when it comes to capital gains and dividends, it seems clear that those earning thousands or even millions of dollars in these types of non-labor income would enjoy a massive tax cut. And that would further widen the disparity between the highly preferential treatment of capital gains and dividends on the one hand, and the taxation of “ordinary” wage and salary income on the other.
We’ve got enough income and wealth inequality coming from the pretax distribution—we don’t need to exacerbate it through the tax code.
Middle class families that depend on earnings will pay more taxes under the Cain tax plan. High income families will pay a lot less. His advisors who say otherwise are misleading the electorate and that must not stand.
Herman Cain (wikipedia)
Herman Cain was born on December 13, 1945,[1] in Memphis, Tennessee, to Lenora Davis Cain, a cleaning woman and domestic worker, and Luther Cain, who was raised on a farm and worked as a barber and janitor, as well as a chauffeur for The Coca-Cola Company President Robert W. Woodruff.
.. In 2006 Cain was diagnosed with Stage IV cancer in his colon and metastases to his liver and given a 30 percent chance of survival. Cain underwent surgery and chemotherapy following the diagnosis, and has since reported that he is in remission.[8]
Disclosures filed during his campaign in 2011 categorized Cain’s wealth at that time as being between $2.9 and $6.6 million, with Cain’s combined income for both 2010 and 2011 being between $1.1 and $2.1 million.[9]
Cain also serves as an associate minister at Antioch Baptist Church North in Atlanta, which he joined at the age of 10.[10] The church is part of the National Baptist Convention[11] and is politically liberal and theologically conservative; the church’s senior pastor, Rev. Cameron M. Alexander, did not share Cain’s political philosophy.[12][13]
.. After completing his master’s degree from Purdue, Cain left the Department of the Navy and began working for The Coca-Cola Company in Atlanta as a computer systems analyst. In 1977, he moved to Minneapolis to join Pillsbury,[17][18] soon becoming director of business analysis[19] in its restaurant and foods group in 1978.[20][21]
.. At age 36, Cain was assigned in the 1980s to analyze and manage 400 Burger King stores in the Philadelphia area. At the time, Burger King was a Pillsbury subsidiary. Under Cain, his region posted strong improvement in three years.[17][22] According to a 1987 account in the Minneapolis Star Tribune, Pillsbury’s then-president Win Wallin said, “He was an excellent bet. Herman always seemed to have his act together.”[20] At Burger King, Cain “established the BEAMER program, which taught our employees, mostly teenagers, how to make our patrons smile” by smiling themselves. It was a success: “Within three months of the program’s initiation, the sales trend was moving steadily higher.”[23]
Cain’s success at Burger King prompted Pillsbury to appoint him president and CEO of another subsidiary, Godfather’s Pizza. On his arrival on April 1, 1986, Cain told employees, “I’m Herman Cain and this ain’t no April Fool’s joke. We are not dead. Our objective is to prove to Pillsbury and everyone else that we will survive.”[20] Godfather’s Pizza was performing poorly, having slipped in ranks of pizza chains from third in 1985 to fifth in 1988.[17] Under Cain’s leadership, Godfather’s closed approximately 200 restaurants and eliminated several thousand jobs, and by doing so returned to profitability.[9] In a leveraged buyout in 1988, Cain, executive vice president and COO Ronald B. Gartlan, and a group of investors bought Godfather’s from Pillsbury.[17]
.. Cain left Godfather’s Pizza in 1996 and moved to Washington, D.C. From 1996 to 1999 he served as CEO of the National Restaurant Association, a trade group and lobbying organization for the restaurant industry, on whose board of directors he had previously served.[26] Cain’s lobbying work for the association led to a number of connections to Republican lawmakers and politicians.[9] Under Cain’s leadership, the Association lobbied against increases to the minimum wage, mandatory health care benefits, regulations against smoking, and lowering the blood alcohol limit that determines whether one is driving under the influence.[27]
Cain was on the board of directors of Aquila, Inc., Nabisco, Whirlpool, Reader’s Digest, and AGCO, Inc.[20][28][29]
.. Cain’s senior economic advisor during his 2012 presidential campaign, Rich Lowrie, who helped devise Cain’s 9–9–9 tax plan ..
.. Cain’s addresses to conservative groups were well received,[66][67] and in late September and early October 2011, Cain won the straw polls of the Florida Republican Party, TeaCon, and the National Federation of Republican Women‘s Convention.[68][69] “My focus groups have consistently picked Herman Cain as the most likeable candidate in the debates,” said GOP pollster Frank Luntz. “Don’t underestimate the power of likability, even in a Republican primary. The more likeable the candidate, the greater the electoral potential.”[68][70]
.. For President Barack Obama’s 2012 State of the Union address, the Tea Party Express chose Cain to give its second annual response.[95
.. Although Mitt Romney was endorsed by Cain on May 15, 2012,[100] he would eventually lose the general election to President Obama.[101] Cain then told Bryan Fischer that the Republican Party no longer represented the interests of conservatives in the United States and that it did not have “the ability to rebrand itself.” He believed that “a legitimate third party” would be needed to replace it.[102]
Herman Cain is the latest test of Senate Republicans’ loyalty to Trump
Some Republicans are actively opposing his consideration for the Federal Reserve Board, while others are standing by the president.
Several Republicans, too, have voiced their opposition, and Majority Leader Mitch McConnell has even gone so far as to urge members of the caucus to reach out to the White House and clue the administration into their concerns before the nomination is official, CNN reports. Yet, while some Republicans have taken issue with Cain’s nomination, others — at least publicly — say they’re plenty open to considering him.
“I think he’s very qualified, he’s a business guy, he’s got experience on the board … out there in Kansas City, so I think he’s a great choice,” said Sen. David Perdue (R-GA), one of Trump’s reliable allies on the Hill who also sits on the Senate Banking Committee, which would oversee Cain’s confirmation hearing.
.. “I think sexual misconduct is wrong,” said Sen. Chuck Grassley (R-IA), while adding, “if it’s a barrier to people being in public office, the president wouldn’t be president.”
.. Sen. Mitt Romney (R-UT) was among one of the earliest Republicans to come out against Cain, and Romney has said he worries Cain’s presence would make the Fed a more partisan body, given the former executive’s longstanding political support for Trump. Romney argued last week that Cain would likely help Trump fulfill his plans to slash interest rates and harm the independence of the institution guiding America’s monetary policy... Growing blowback against Cain’s nomination has led Senate Republicans to stage a behind-the-scenes effort to prevent his selection from being formalized by the White House, Politico reports.
“It’s hard for me to imagine that he would be confirmed,” said Sen. Kevin Cramer (R-ND).
Still, there are lawmakers within the Republican Party who remain bullish on Cain’s chances. Supporting Cain could also be a means to align themselves more closely with Trump, especially ahead of 2020.
“I think he’d probably be confirmed,” said Sen. John Cornyn (R-TX), who noted that he did not see Republicans as divided on the matter.
But Cornyn, a top Senate Republican who recently pushed back at Trump’s staffing changes at the Department of Homeland Security, added that he’d like to see more consultation from the White House on nominees down the road.
“I don’t think it’s a given that everybody whose name gets floated, without vetting and without consultation, could get confirmed,” he said.
Republican seem less worried about Stephen Moore
Moore, the second person Trump has said he intends to appoint to the Fed, appears to be getting a warmer reception from Senate Republicans, even though he also faces challenges of his own.
Democrats also view Moore, a current fellow at conservative think tank the Heritage Foundation, as a baldly political choice — and pointedly wonder whether someone who’s encountered personal finance issues in the past is qualified to help run the US’s central bank
.. As Amanda Sakuma wrote for Vox, Moore was previously held in contempt of court for failing to pay child support and alimony to his ex-wife in the wake of their divorce settlement. He also owes more than $75,000 in taxes to the IRS, which he says he’s been paying back in the aftermath of what he claimed was a paperwork-related mishap, according to the Guardian.
Those issues, however, aren’t necessarily disqualifying for all Senate Republicans; multiple lawmakers mentioned that they were familiar with Moore and spoke positively of his consideration.
“I know Stephen Moore, he’s a smart man, he’s the head of Club for Growth,” said Sen. Richard Shelby (R-AL). “We have to do this in regular order, but I think he would probably be a good voice on the Fed. One, he’s got to be nominated first. Second, he’s got to be confirmed.”
“I said, ‘Pay your taxes; pay your support!’” Shelby said, when asked about Moore’s financial problems.
“Stephen is a solid guy, I know Stephen pretty well. I think Stephen has been right about a few things, with regard to the Fed’s treatment of interest rates, especially,” Cramer said. “I want to hear more about the specific issues surrounding some of his financial situations.”
The North Dakota senator added that he did not see Moore’s run-in with the IRS or the divorce settlement being disqualifying for his nomination if he had cleared up both issues.
Some Republicans said they’d be open to vetting both Moore and Cain further as part of the confirmation process, and making a decision after more steps had been taken. The Senate confirmation process is typically used to scrutinize potential concerns about nominees, though these lawmakers could be trying to diplomatically dodge the question of where they actually stand on the latest of Trump’s controversial nominees.
“They’re unconventional picks, and I want to see what the banking committee hearings reveal,” said Sen. Susan Collins (R-ME). “I’m sure there will be many, many questions about both nominees.”
Potential Federal Reserve board member Herman Cain frequently promoted scammy financial emails
Right-wing commentator Herman Cain, who is reportedly being considered for a Federal Reserve seat, has spent years pushing scammy financial emails to his mailing list. Those sponsored emails touted a “weird trick” that supposedly “adds up to $1,000 a month to Social Security checks”; advice on “the best place to hide your money”; and financial trades that could “turn $1,000 into $1.6 million.”
.. After dropping his 2012 presidential bid, Cain profited off his email list of supporters by sending sponsored content. (Those emails contained the following disclaimer at the end: “The sender of this email may receive compensation for the advertising contained in this message. Any products or services offered by sponsors or advertisers have not been evaluated by Herman Cain and as such no warranty or claims are made.”)
.. Cain sent a sponsored email from Agora Financial suggesting that Americans could piggyback “onto ‘Canadian Social Security’” and collect “extra benefit checks between $400 and $4,700 every month.” CNBC criticized Agora Financial for the ad, stating: “There’s only one problem: that’s not the way it works, according to authorities.” Mother Jones’ Tim Murphy reported that “Agora and its subsidiaries have been accused of crossing the line between aggressive salesmanship and deception.”