Henry Cain is a viable candidate for President.
I like much of what this man says, but his '9-9-9" plan does not give me tingles. "No tingles?" you may very well ask. "Why so?"
The answer is simple - because it imposes a new federal tax, a national sales tax or Value Added Tax. Cain's 9-9-9 plan would establish a 9% personal income tax, a 9% business tax and a 9% value added tax while eliminating nearly all deductions.
Allegedly everyone would pay taxes. For about 15 minutes.
Because that's how long it would be before Congress started monkeying around with the tax laws to accomodate their friends. And now with a VAT jackhammer in their tax toolkit, Congress could really nail the most productive segment of the economy in order to benefit the least productive segment, all in the name of fairness.
Europe has been playing with VAT since the 1950's. The VAT rate has only increased from one year to the next. In Spain it is 18%, in France it is now over 19%, England 20% and in Denmark, 25%!
Food for thought.
How to reduce government? Gridlock. Bind up those thieving SOBs in Congress and the WH so badly that they can't do any damage.
This is from a 2000 interview by "Uncommon Knowledge" host Peter Robinson with economist Milton Friedman.
According to Friedman, gridlock was the unintended mechanism through which the federal government finally realized some budget surpluses during the later years of the Clinton administration.
Milton Friedman: The better model is Reagan, cutting taxes. The reason you have a surplus today, in my opinion, the credit for that has to be given overwhelmingly to gridlock.
Peter Robinson: To gridlock?
Milton Friedman: If you had had a Democratic House and Senate, as well as a Democratic president, you would not have a surplus today in my opinion. They would have spent it. Similarly if you had had a Republican president as well as a Republican House and Senate, I doubt that there would have been a surplus today. Because they would either have spent it or had tax reductions.
Peter Robinson: So when President Clinton steps forward to take his bows, you don't applaud at all?
Milton Friedman: Well, I applaud. He provided gridlock.
Peter Robinson: Okay, you applaud but for a different reason than the one he supposes.
Milton Friedman: The winning thing that really contributed to our successful economy over recent years is that the government has stayed out pretty much, with the White House and the Congress and the Senate haven't done much.
Peter Robinson: In this upcoming election, you'd hope for the White House and Congress to be captured by different parties? You vote for gridlock? Or what would you tell the next president about keeping the economy growing?
Milton Friedman: First of all, I don't think the president has a great deal to do with keeping the economy going.
Peter Robinson: All right.
Milton Friedman: I think presidents have a great deal to do with keeping the economy from growing. They can follow follow-throughs which will cause contractions. But I think the economy is largely independent of the government, and what keeps it going is its own internal development.
However, you can short-circuit that internal development. If you impose very high taxes, and eliminate the incentive to innovate, to improve, to take risks, and do things, you'll kill the economy. And that's what's happened over and over again in other countries around the world.
[...] Peter Robinson: But if you cut taxes, what does that do to help the government meet its unfunded obligations.
Milton Friedman: It doesn't do a thing, but let's go back. To meet the unfunded obligations, you really need a change in Social Security. All the rest of this talking about paying down the debt as a way of solving the Social Security problem--
Peter Robinson: Is nonsense?
Milton Friedman: --is an evasion. In the long run government will spend whatever the tax system will raise, plus as much more as it can get away with. [emph. mine ~ sig94] That's what history tells us, I think. So my view has always been: cut taxes on any occasion, for any reason, in any way, that's politically feasible. That's the only way to keep down the size of government.