Sunday, October 16, 2011

Herman Cain Meets/Schools The Press

Herman Cain appeared on Meet The Press this morning. This can be nerve-wracking for Republicans to watch, as "our" side is always walking into a buzz saw of hostile questioning seeking stuttering responses to  various gotcha questions and requests to name their favorite Supreme Court decisions. The expectation was that Cain - who has never held elective office and is thereby "unelectable" - would have at least one awkward moment, if not a candidacy-scuttling meltdown. 

Turns out we didn't have to worry. Cain "nailed" MTP, (in the estimation of Althouse) and managed to make David Gregory look foolish and even ignorant about fundamental questions about taxation and federalism. Just look what Cain does with Gregory's attempts to discredit 9-9-9 by bringing up the effect Cain's plan would have once state taxes are factored in:          

MR. GREGORY:  The other defect in the plan comes from fellow conservatives who say, "You've got some problems here." This is what The Wall Street Journal said about it this past week.  "The real political defect," the Journal writes, "of the Cain plan is that it imposes a new national sales tax while maintaining the income tax.  Mr. Cain's rates are seductively low, but the current income tax was introduced in 1913 with a top rate of 7 percent amid promises that it would never exceed 10 percent.  By 1918 the top rate was 77 percent.  The politics of a national sales tax is bad enough on its own.  A 9 percent rate when combined with state and local levies would mean a tax on goods of 17 percent or more in many places.  The cries for exemptions would be great."

MR. CAIN:  Don't combine it with state taxes.  This doesn't address state taxes.  If you add them together, yes, you'll get that number.  This is a replacement structure.  These are replacement taxes.  They're not on top of anything.
MR. GREGORY:  Mm-hmm.
MR. CAIN:  We replace capital gains tax.  We replace the payroll tax.  We replace corporate income tax, replace personal income tax, and replace the death tax.  It is a replacement tax structure.
MR. GREGORY:  But where do state taxes go?  You're saying they're going to be repealed?
MR. CAIN:  If you--with the current structure, you have state taxes, right? So with this new structure, you're still going to have taxes--state taxes. That is muddying the water.
MR. GREGORY:  How so?
MR. CAIN:  Because today, under the current tax code, state taxes are there if they have it.  If they don't have a state taxes, they don't have it.  It has nothing to do with this replacement structure for the federal tax code.
MR. GREGORY:  But that doesn't make any sense to me.  If I'm already paying state taxes, and I have a new Cain administration national sales tax, I've got more state taxes
MR. CAIN:  No you don't.
MR. GREGORY:  How so?
MR. CAIN:  David, David
MR. GREGORY:  You're not saying they're going away.
MR. CAIN:  Your state taxes are the same.  Your federal taxes, in most cases, are going to go down.  That's muddying the water.
MR. GREGORY:  The Wall Street Journal says you have one on top of the other. There's a combined levy.
MR. CAIN:  That is not correct, David.
MR. GREGORY:  Right.
MR. CAIN:  Let's try this one more time.  State taxes are there today.  The current tax code is a 10 million word mess.  You have probably 100--you have thousands of loopholes and tricks and what I call "sneak attaxes" in the current code.  State taxes today, whatever they are, zero or some number, has nothing to do with replacing the tax code.  Nothing.

Geez, David! Mr. Cain is speaking very slowly and clearly (and, no doubt, politely restraining himself from using too many $5 words), and you just can't seem to grasp that (1) states collect their own sales and income taxes now (2) they will continue to collect their own sales and income taxes in the future and, most important (3) there's nothing an American president can do to change that. Quite the opposite. 

(actually, it just occurred to me that, were the federal tax bite be reduced, Blue States would probably raise their income tax rates. Right now, even tax-happy places like NY and CA don't dare raise their income tax rates much beyond 10%, given the sizable bite the feds take. With a reduced 9% federal rate, don't you want to bet CA would be much more willing to raise its income tax to 35 - 40%?)

Herman Cain may not be a professional politician. He might be unelectable. But, unlike a lot of the pros in the Republican ranks, Cain was able to enter one of the MSM's lions dens and use common sense and the facts to turn David Gregory's talking-points based questions upside down. Why can't all of our guys do this?

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