GOP presidential candidate Herman Cain is refusing to disclose the names of his top policy advisers.
According to the latest poll, if not necessarily the conventional wisdom, Atlanta businessman Herman Cain is currently the frontrunner for the GOP presidential nomination. The natural consequence is that people now care about the actual ideas he has proposed, and the results aren't pretty: Independent analyses of Cain's signature 9-9-9 tax plan show that it would double taxes on the middle class, and hike taxes on low-income Americans by a factor of nine. That's less surprising when you consider that the plan was crafted not by a professional economist or budget wonk, but by Rich Lowrie, a financial manager at a Wells Fargo office in Pepper Pike, Ohio, with a B.S. in accounting.
So how has Cain responded to the scrutiny? By clamming up. CNN's Kevin Liptak reports that Cain is now refusing to name any of his other economic advisers, because he's concerned that they will become punching bags for his opponents:
There are a number of different components to this, but one of the most glaring elements of 9-9-9 is that it puts a 9 percent federal sales tax on food. That's on top of whatever other sales tax exists (Alabama and Mississippi, for instance, already apply a full sales tax to groceries). Cain says that this is only fair, because everyone buys groceries. But that ignores the fact that taxing groceries is incredibly regressive. As you can see in this handy chart, poor people have to spend a much higher percentage of their income on food than rich people. Obviously, with more disposable income you can buy fancier varieties of food and do all your shopping at Whole Foods, but there's a limit even then; it's not as if Warren Buffett subsists entirely on $1,600 muffins:
Self-explanatory: The less money you have, the more of it you have to spend on food.: Courtesy of the USDAPoor Americans spend a lower percentage of their income on food than the rest of the world because poor Americans are pretty well-off, relative to the rest of the world, but the overall trend is pretty obvious. Cain has attempted to argue away the point that 9-9-9 is regressive by noting that under 9-9-9, there would be no tax on used goods. Food isn't much good once it's already been used once, though.
If nothing else, Mitt Romney came prepared to Tuesday's GOP presidential debate. While his top rival Rick Perry seemed only semi-alert (perhaps he needs more sleep?), Romney was more than up to the task of responding to a steady stream of jabs from the field's also-rans. He told Herman Cain that sometimes short and simple plans are "inadequate" when the Georgia businessman asked Romney to recite his economic plan from memory.* And when former Utah Gov. Jon Huntsman challenged Romney on his record at the private equity firm Bain Capital, stating (accurately) that Romney was not a job creator, he fought back. Hard.
Here's what Huntsman asked: "Some might see you because of your past employment with Bain Capital as more of a financial engineer, somebody who breaks down businesses, destroys jobs, as opposed to creating jobs and opportunity, leveraging up, spinning off, enriching shareholders. Since you were number 47 as governor of the state of Massachusetts—where we were number one for example—and the whole discussion around this campaign is going to be job creation, how can you win that debate given your background?" Romney had been asked a variation of the question at previous debates, but this time he came prepared with specifics:
If you watched Tuesday evenings' GOP presidential debate, you heard a lot about Herman Cain's 9-9-9 plan. For the unfamiliar, it's pretty straightforward: 9 percent corporate tax, 9 percent sales tax, and 9 percent income tax. Win-win-win! Or maybe not. Cain was asked at the debate to explain away the charge that his 9-9-9 plan would effectively raise taxes on low-income workers. (Among other things, Cain's plan would implement a sales tax on groceries, which only two states currently do.)
Cain rejected the notion, but the facts are pretty clearly not on his side. Don't take it from me, though. None other than Bruce Bartlett, a former economic adviser to Ronald Reagan and George H.W. Bush, says so. Here's how he explained it at the New York Times' "Economix" blog earlier this week:
At Tuesday evening's GOP presidential debate at Dartmouth, Michele Bachmann was asked by the Washington Post's Karen Tumulty whether she believed Wall Street had ever really paid for the financial crisis it caused. The Minnesota congresswoman, whose campaign has hit a rut of late, rejected the premise. She argued instead that the financial crisis had been created by the policies of Fannie Mae and Freddie Mac, the quasi-governmental housing agencies.
It's an enticing narrative for conservatives—pin the blame on government lending money to poor people—but it's not true. My colleague Andy Kroll explained over a year ago why exactly this is wrong: