For some reason, I guess because it’s getting some serious attention, I found myself wondering if Herman Cain’s 9-9-9 tax plan raises the same amount of revenue as the current federal tax system. The WaPo says the following:
“Cain has said that his plan would collect about the same amount of revenue that now flows into the government, and that it would increase as the economy strengthened. Experts, however, say that is difficult to know because the candidate has given only broad outlines for his proposal…”
I checked with some colleagues who tell me that the usual scorekeepers of such things haven’t looked into this yet, probably because they need more than three numbers—or one number three times.
So what makes Mr. Cain so confident about revenue neutrality? After all, he exempts capital gains, estates, the payroll tax, and the corporate part of dividends—that’s a lot of the base.
I went to his web site to learn more. I found this point, under “Phase 1 – 9-9-9:”
“The Phase 1 Enhanced Plan incorporates the features of Phase One and gets us a step closer to Phase two”
…which helped a lot, but I wanted more.
Thankfully, a colleague sent me this, from a recent TV appearance by the candidate (hat tip, CCH):
“I had some of the best economists in this country help me to develop this plan. You know, my background is mathematics. It was a simple regression analysis. We took the government data and looked at how much tax revenue from personal income tax, how much tax revenue came from corporate tax, how much revenue came from capital gains tax, how much revenue from the death tax. We added them all up, and you do a simple regression analysis and say in order to reduce this much on corporate income, personal income and national sales tax, what should that number be if we equally break up those three buckets. It was a simple regression analysis.”
OK. Your background is math…that’s good. But regression analysis…really? What are you talking about? Can you just say freakin’ anything and get major freakin’ coverage in a major freakin’ paper?
Apparently so, but bad for the WaPo for its shoddy evaluation of this question—the framing above re revenue neutrality just says “Cain says it is; experts aren’t so sure.” What it should say is: Cain was unable to provide any evidence to support his claim.