Cain’s Conventional Wisdom: Boost the Rich, Raise Taxes on Everyone Else

Sometimes Bill Clay, a.k.a. Hans Grüber, the biggest fake blogger in South Dakota, says something really stupid. Today's dose of DWC-dumb: Grüber claims with breathless excitement that presidential candidate Herman Cain is refuting the "conventional wisdom" as he surges in the polls.

Do you think we're stupid, Hans? Cain confirms the conventional wisdom that the rich and powerful, like the Koch brothers, can hijack our political process. Cain confirms the conventional wisdom that a candidate can get a lot of mileage out of a snappy slogan and folksy generalizations before people realize just how bad his actual policies are...

...which brings me back to that devilish 999 tax plan. I wanted to limit my coverage of the 999 proposal to what it really is, a joke. Are we seriously going to elect a President who would govern as if he were playing Sim City? (Next up: I run for Governor with policies based on my Freeciv strategy focused on obtaining Philosophy, Invention, and Leonardo's Workshop and sending out lots of Explorers to raid villages for scientific advances.)

But neighbor Stan Gibilisco presses the 999 issue, seeing in it a serious assault on the poor. Stan is right: 999 is another cog in the Koch brothers' machine to redistribute more wealth from the poor to the rich. USC law professor Edward Kleinbard, who used to work for the Congressional Joint Committee on Taxation, says Cain's tax slogan cuts taxes for the rich and raises them for most working folks:

He says under Cain's plan, a family earning $120,000 a year would see their after-tax disposable income drop by about $500.

"Basically from that point down, most everybody is worse off, and the further down the income ladder you go, the extent to which a family is worse off under the Cain plan increases dramatically," says Kleinbard.

For a family of four earning $50,000 a year, Kleinbard says the hit would be about $5,000 under the 9-9-9 plan [Tamara Keith, "Herman Cain's 9-9-9 Plan Gets a Closer Look," NPR: All Things Considered, 2011.10.17].

The Center for American Progress finds that we should add another 9 to Cain's slogan: all those 9's add up to the bottom fifth of taxpayers paying nine times as much in taxes to Uncle Sam, even as Cain explodes the national deficit.

A private correspondent suggests that such analyses miss the benefits of lowering upper-income tax rates. Lowering tax rates on wealthy people and corporations will lower their cost of doing business, and competitive forces will lead them to lower the prices we pay for their goods and services. Give rich people and corporations our money, and they hand it right back to us, just like this summer when House Republicans shut down the FFA and made the airline ticket tax disappear for a couple weeks. The airlines all dropped their ticket prices and refunded the taxes they had collected from passengers, right?

The only conventional wisdom Cain is defying is the conventional wisdom Republicans like Clay Grüber espouse, that you can't advocate a tax increase and get elected. If we look past the cute slogan at what little Cain and his advisors will actually explain about the "plan," we see that Cain would raise taxes on a majority of Americans.

And the conventional wisdom says that proposal is political suicide. I trust the first actual votes in Iowa and New Hampshire will bear that wisdom out.