Reagan Adviser Laffer: Cain’s 9-9-9 Plan Will Work
Wednesday, 19 Oct 2011 09:28 AM
By Julie Crawshaw
Economist and former Reagan adviser Arthur Laffer says Herman Cain’s 9-9-9 tax plan is a good one.
“Once the dynamics take hold, many of those below the poverty line will find good jobs and thus will rise above the poverty line and start paying taxes,” says Laffer.
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“This is the type of tax increase I wholeheartedly support. I support collecting more in taxes from people with high incomes who choose to actually pay taxes at lower tax rates than use lawyers and accountants to avoid taxes at higher tax rates.”
| Herman Cain (Getty Images photo) |
“Some tax revenues at low tax rates is a heckuva lot better than no tax revenues at high tax rates.”
Laffer notes that a number of his fellow economists don’t like the retail sales component of the 9-9-9 plan.
“They argue that, once in place, the retail rate could be raised to the moon,” says Laffer. “They are correct, but what they miss is that any tax could be instituted in the future at a higher rate.”
“If I could figure a way to stop future Congresses from ever raising taxes I’d do it every day of the week and twice on Sunday. Until then, let’s not make the perfect the enemy of the good.”
The Wall Street Journal reports that an analysis by the Tax Policy Center concludes that more than 90 percent of people earning less than $37,090—the bottom 40 percent of earners—would see a tax increase under Cain’s plan.
It also estimated that those who earn $17,900 or less per year—the bottom 20 percent—would pay $1,854 more per year on average in U.S. sales taxes and income tax levies that many now are exempt from paying.
By contrast, about half of households in the top 20 percent of earners, with incomes greater than $111,000, would get an average tax cut of $14,400.
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