Herman Cain has been running through the motions of campaigning to be the republican nominee. Last week he got a lot more public about his support for the fair tax. The fair tax proposes to replace income tax and payroll tax with a 23% consumer sales tax. On a Fox News interview, he was asked "Why do you think you can carry this message and win the nomination where Mike Huckabee failed 4 years ago on a similar platform?" He didn't really have an answer. He's proposing a 2-phase boost to the economy? He wants to cut taxes and then educate the public about the fair tax? The public is too smart for that. They will make up their mind about the fair tax LONG before they ever put you in office, Mr. Cain. Cain says he can defend all the lies about the fair tax. But what he can't defend the open-ended questions.
I have discussed the fair tax at length in the past. It is an "idea", moving towards flatter taxes, but there are some major concerns that I feel are deal breakers:
<> In order for this to take place, you have to repeal the 16th amendment. Impossible. Good luck.
<> They claim this will eliminate 90% of the IRS. Cain says these folks are smart enough to find new jobs. HOW WILL YOU CREATE NEW JOBS FOR THEM WHEN CONSUMER SPENDING WILL HALT THE SECOND THE FAIR TAX IS IMPOSED?
<> This would drive a lot of sales underground, to the black market. Wealthy people work hard to keep their wealth, and the instant his would be put in place, a mutli-billion dollar underground market would be created. You would need an enforcement team twice the size of the current IRS just to combat the black market.
<> This would bankrupt anyone on fixed income. Those who don't currently pay income tax, such as the poor and retired citizens, would have the same income or the same savings and then be expected to pay 23% more for everything. Retired citizens would not support this bill. They have been working their entire lives and paying income taxes. Can you imagine the effect of them having to pay the equivalent of an income tax through their consumer spending? It would drive them to buy everything.......on the black market.
So the concerns are separate yet tied one to another. This is just my opinion, but it sure seems illogical and UN-Fair to a lot of folks who have been working their whole lives to enjoy retirement.
Herman Cain is banking on the Fair Tax to win over a few percentage points in the polls from the fair taxers out there. And why shouldn't he be a fan of it? He's a CEO. He realizes that he could eliminate payroll taxes, and raise prices 23% simultaneously. And he knows it would be pretty hard to buy a Godfathers extra large pepperoni pizza on the black market. Win-win for him. Lose-lose for his GOP nomination aspirations.