Rep. Michele Bachmann delivered a clever line during Tuesday night’s Republican presidential debate: She slammed Herman Cain’s “9-9-9” tax plan by suggesting that the numbers be turned upside down “because the devil is in the details.”
Devil, nothing. Outcries from the right notwithstanding, the former restaurant executive’s plan should be viewed more like manna from heaven for conservatives and true tax reformers, because Cain has delivered the equivalent of the term “net neutrality” to the movement: a masterstroke that reduces a complex debate into a catchy catchphrase which galvanizes interest and disarms opponents.
People like slogans — and simplicity. In fact, the devil can’t be in the details — because there are no details. Although Cain slobbered on his pièce de résistance with his efforts to differentiate treatment of foreign versus domestic investment, 9-9-9 is pretty much “what you see is what you get.” Nine percent personal income tax, nine percent corporate tax, nine percent sales tax — with no exemptions, deductions or loopholes. It doesn’t get much simpler than that.
It’s no wonder 9-9-9 — in contrast to Mitt Romney’s 59-point stupefier of a program and Rick Perry’s vague generalizations about transferring Texas’s successes to Washington — has helped catapult the former entrepreneur to the head of the Republican presidential class.
But 9-9-9 does much more than that. It provides a delivery vehicle to blast through a range of long-time goals of tax reformers. Low, low, flat rates — the corporate tax reduction alone would move America from the most punitive rates in the world to the most attractive, making our nation once again a magnet for global investment. Not to mention that flat taxes are the answer to the Buffett Rule — executives and their secretaries would indeed be paying the same rate on every dollar of income. That’s the definition of fairness.
If implemented, the 9-9-9 plan would broaden the tax base. We would truly return to the principle of everyone paying his or her fair share, with no more free-riders. Everyone would have skin in the game.
The plan would dramatically reduce compliance costs, which now run to an astounding 14 percent of revenues. Simpler is cheaper. No more of those H&R Block commercials celebrating the rescue of taxpayers being ripped off by their government because the Internal Revenue Code is too complex to navigate. And by the way — no more General Electrics avoiding corporate taxation by filing mountainous returns taking advantage of every nook and cranny of that 3-million-plus word code. There would no longer be any point, profit or even possibility.
Most importantly, the plan would increase transparency. The Wall Street Journal and some conservative tax reformers are whining about the possibilities of rampant tax increases resulting from the combination of income and consumption taxes, as in Europe. But that possibility would be more than offset by the clarity of 9-9-9. There would be nowhere to hide tax increases as was done in the past by stealth elimination of exemptions, deductions and credits and hikes on small classes of earners.
In fact, the transparency inherent in 9-9-9 points to another extraordinary benefit — the discipline the plan would impose on government spending. As 9-9-9 takes hold in the public consciousness, the cost of government would be out in the open. Any dramatic expansion would require a change in one or more of the numbers that would be hugely transparent. Ironically, though, the gusher of revenues produced by its pro-business provisions would take some of the pressure off budget-cutters.