Wednesday, October 19, 2011

Cain's Stimulating '9-9-9' Tax Reform

Arthur B. Laffer

excerpts:
  • in today's world the tax mandate has many more facets. These include income redistribution, encouraging favored industries, and discouraging unfavorable behavior
  • Republican presidential candidate Herman Cain's now famous "9-9-9" plan is his explicit proposal to right the wrongs of our federal tax code.
  • the plan exempts from any tax people below the poverty line
  • 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.
  • Still, a number of my 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. They are correct, but what they miss is that any tax could be instituted in the future at a higher rate

Comment: Taxes should be for the funding of government and nothing else-neither income redistribution, nor favored industries, nor changing behaviors. Any true conservative should love this plan because a limited government is what it is all about.

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