The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Althouse on the Cain Train?

Posted on | October 16, 2011 | 72 Comments

“I thought David Gregory really lost his cool early on, as he was questioning Cain about 9-9-9. If you watch the video, you can see he’s agitated and grimacing in a way that really lacks the usual polished journalist quality.”
Ann Althouse, “Herman Cain Nailed Meet the Press”

This is an unexpected but really quite welcome development. Professor Althouse has been critical of Cain previously and (like most in academia) is not generally a fan of the populist style. From the transcript of Meet the Press, she excerpts these examples of David Gregory’s visible frustration:

The reality of the plan is that some people pay more, some people pay less…. You’re saying [prices] actually go down?… This isn’t about behavior, Mr. Cain, this is about whether you pay–if you don’t pay taxes now, and you now have income tax and a sales tax, you pay more in taxes…. Mr. Cain, we talked to independent analysts ourselves…. We’re not just reading newspaper clips here… They tell us, they’ve looked at this, based on what’s available of the plan, and it’s incontrovertible.

I hadn’t really spotted that, but she’s right: Cain stood his ground, and one of the points that flustered David Gregory was this:

MR. GREGORY: The wealthiest Americans would pay less, the poorest Americans and middle class would pay more. You don’t dispute that.
MR. CAIN: I do dispute that. You are making — you and others are making assumptions about what wealthy Americans would do with their money, and you’re making assumptions about what the middle class and the poor. You can’t predict the behavior. If wealthy Americans…
MR. GREGORY: This isn’t about behavior, Mr. Cain, this is about whether you pay — if you don’t pay taxes now, and you now have income tax and a sales tax, you pay more in taxes.
MR. CAIN: More people will pay less in taxes. More people will pay less in taxes when you consider all the taxes.

What Cain was saying is that every system of taxation involves hidden economic incentives, and incentives influence behavior. Cain was correctly saying that the sales tax element of “9-9-9,” which Gregory and others assume would impose higher taxes on the poor, would only cause them to pay more taxes if they do not respond to the incentives, namely to spend less — or buy more secondhand merchandise, which isn’t taxed under his plan.

Cain is likewise correct in saying that “you can’t predict behavior” – i.e., The Law of Unintended Consequences. While this is as good an argument against “9-9-9″ as it is in favor of it, Cain is correct that we cannot make easy assumptions about how such a radical alteration of the federal tax system would impact the economic behavior and financial well-being of various classes of people.

We can agree that a flat tax will generally be of most benefit to the wealthy (who pay a much higher percentage of their income under the existing progressive system) without assuming, willy-nilly, that others will be impoverished as a result. And the point of “9-9-9″ is not to achieve “social justice,” but rather to unleash capital investment to spur economic growth. It is a supply-side solution to our current economic woes, and as such has been praised by the Club for Growth and by Art Laffer.

Would a man rather be unemployed and paying no taxes, or would he rather have a job and pay taxes? That’s the real choice, and yet David Gregory can’t seem to understand it.

We could update an old joke Ronald Reagan used to tell: “A recession is when your neighbor loses his job. A depression is when you lose your job. And a recovery is when David Gregory loses his job.”

PREVIOUSLY: Remember When David Gregory Raked Obama Over the Coals on ‘Meet the Press’?

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Comments

  • Anonymous

    Gotta go to war with the dogs you have, man.

  • Anonymous

    Completely agreed.

  • http://twitter.com/sdo1 Steve in TN

    The more I look at Cain the more I see very real danger.  He knows nothing – as he himself admits – about foreign policy.  He has demonstrated a decided lack of understanding about personal liberty.  Now, on a topic where he is supposed to be well versed, he has submitted a plan that is the reverse of Obama’s class warfare.  Cain has declared war on the poor and middle class by replacing taxes that the “rich” and corporations pay with taxes that WE will have to bear.
     
    Instead of creating a VAT and “broadening” the tax base to strip the average American further of their bounty to replace capital gains and other taxes on the “rich” he should simply declare he will ELIMINATE those taxes.  We don’t need a broader tax base, we need to reduce taxes and streamline government.  I’m stunned that those who call themselves conservatives and say they are members of the Tea Party movement have fallen for this type of corporate welfare.  We are Taxed Enough Already.  We don’t need to replace bad taxes with worse taxes, we need to reduce and eliminate taxes.
     
    To borrow a phrase from last election stated by the author of this blog; IT WON’T WORK.
     
    My objection to the “buy second hand” line – which is reminiscent of “Let them eat cake” – is the class warfare bent it has.  Hey, you guys that aren’t rich, too bad for you…  Want a shirt?  Shop at Good Will.  New shirts are only for us rich.  I don’t like it from Obama and I don’t like it from Cain or those who support him.
     
    We need a President that will get government out of the way and let American business get on with the business of American business.  Cain’s plan does not do that.  It just makes us poorer and eliminates customers for our entrepreneurs.

  • http://twitter.com/sdo1 Steve in TN

    Yeah, and I’m 99.9% sure I’ll vote for the eventual GOP nominee, as I hope all level headed Americans will. 
    [EDIT: aimed at Wombat, dunno why it didn't go as a reply]

  • http://twitter.com/DaMav DaMav

    lmao, you guys are hilarious.  ”Exposed” for hanging with some top wealth creating businessmen.

  • Nathan

    Do you think the ultra-rich pay more taxes under a complex, loophole-ridden tax code, or a simple, equitable one? Come, let us reason together: who spends more on lobbyists, Warren Buffet or his secretary?

    The current tax code is a scam. Anyone on the left or the right should be able to see that.

  • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

    Every deduction is a loophole intended to benefit a particular constituency.  Some like child credits appeal to families, others like certain business exemptions appeal to those who get it,  Some are intended to win votes, others donations.  Simple and straightforward is not only as close to “fair” as we are likely to get in this world, but it also promotes economic efficiency.  Deductions lead taxpayers to make irrational decisions just for tax reasons.

    I also caught your LBJ reference, but remember he also said “I never negotiate with a man until I have his pecker in my pocket.”

    The image is disturbing but I appreciate the advantage he wants.

  • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

    That’s my policy in every election since I abandoned any pretense of “independent” status around Reagan’s reelection.  I never endorsed every position popular with the Republicans, but it got to the point where I never agreed with any of the idiotic plans Democrats put forth, and Republicans were on my side of an issue most of the time.  I was no longer a “Republican-leaning independent” but an “independent-minded Republican” in all but formality.

    This year it should be a no-brainer for everyone.  Obama is the worst President ever – he’s not only incompetent and counterproductive on the economy, his regulatory policies have been extralegal, a most dangerous practice associated with dictatorship, not democratic republics.

  • Joe

    Allah does not believe.

  • Nathan

    They do pay taxes, they just don’t know it. As Cain says in the interview, everything you buy is loaded with taxes. That’s because taxation is a cost of business, and costs raise prices, as anyone with a high school education that didn’t focus exclusively on PC claptrap knows.

    The problem is that current tax rates are invisible and set by lobbyists. Which is why they will go balls to the wall to defeat any overhaul of the federal tax code.

  • Nathan

    It doesn’t matter! The employer’s portion is part of your salary, too.

  • Joe

    Jen Rubin, she really   ? Herman.  

  • Joe

    That is a strike through the heart if you miss the nuance. 

  • http://pulse.yahoo.com/_CQSOIAZV2OY2DH6AGL6IRCFTKU Max

    I am not a big  Cain fan. He run looks more like a hobby campaign than somebody who has seriously thought about how to win and how to govern(and why). Having said that, Australia and Switzerland introduced “sales” taxes (VAT & GST) to allow them to have lower overall rates. After a small blip neither were big news again. Clearly states that have very high current sales taxes will have really big overall consumption taxes, but so what. France and the UK have 22% consumption taxes.  Will CA and NY need to look again at their overall high taxes…sure…not a bad thing.

    I think the bigger problem is that he has no real plan to get spending down and he really seems to have no idea who would work for him if he were president. If he really wants to be president he should spend the next four years getting ready or run for Governor of GA to show what he can do.

  • bandit keena

    Gregory isn’t interviewing Cain – he’s doing OP research and intervention for the Dems – the mission he and his bretheren volunteered for.

  • http://thepagantemple.blogspot.com/ ThePaganTemple

    The only thing better than Sarah Palin getting back in the race would be the heavens opening and George Washington descending on a  white horse.

  • Anonymous

    Which is why we’ll need a Constitutional Amendment, like we did with income tax. Great vehicle for repealing the 16th Amendment income tax  while implementing the new one, both of which are needed.

  • Anonymous

    Allah believes ORomney spunk is an anti-aging treatment, taken either internally or externally.

  • Anonymous

    Which is why open primaries are so bad.

  • http://twitter.com/policygal Casey Kelley

    ‘Cain’s 9-9-9 plan is not perfect. But then again, the good should never the enemy of the perfect.’
    Kudlow: Is Cain Able to Kill the Tax Code? – Big Government http://bit.ly/pI2pa4

  • Anonymous

    With Louis Armstrong, Bix Beiderbecke, and Maynard Ferguson dressed like cherubim, blowing them horns!

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