PBS: Inequality in Herman Cain's 999 Tax Plan

Inequality in Herman Cain's 999 Tax Plan

Monday, October 17, 2011

 

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SUSIE GHARIB: With the 2012 race for the White House heating up, tonight's commentator weighs in on the economic cornerstone of the latest Republican front-runner. Here's Jared Bernstein. He's with the Center on Budget and Policy Priorities and as former chief economist to Vice President Joe Biden, he's no stranger to presidential politics.

JARED BERNSTEIN, SR. FELLOW, CENTER ON BUDGET/POLICY PRIORITIES: The long American election cycle is upon us. What matters most to the future of our country is that voters clearly understand the issues at hand. There is just too much at stake to throw up our hands in confusion on the policy, only to decide which candidate we'd like to share a beer with. So let's talk facts. Candidate Herman Cain claims that his 9-9-9 tax plan will lower the Federal tax bill for the middle class. Yet every independent analysis I've seen shows this to be false. The tax bill for a $50,000 household with two kids would go up by $5,000 under his plan and because the plan exempts so called non-labor income like capital gains and stock returns from taxation, the tax bill of the very wealthy would fall. This would exacerbate our already severe inequality problem, yet the candidate claims that his plan is notable for its fairness. Both Republicans and Democrats are arguing for a tax repatriation bill that will allow American businesses with overseas profits to bring those profits back to America at a much reduced tax rate. They claim that this corporate tax break would lead to more jobs and investments here at home. But last time we tried this, in 2004, all it did was lead to stock buybacks and dividend payouts. Meanwhile, the tax scheme is scored as adding $80 billion to the budget deficit. It's not exactly a newsflash that advocates distort the impacts of their favored policies, but it's getting worse. It seems fine to just say anything you want these days. Forget truth. Forget even truthiness! Well, I still think facts matter. And I suspect you do too. I'm Jared Bernstein.