Posted Wednesday, Oct. 12, 2011, at 12:59 PM
Photo by Chip Somodevilla/Getty Images
What do you think, Grover Norquist? A bunch of Republican candidates are running around the Granite State accusing Herman Cain of backing tax hikes with his 9-9-9 plan. Is 9-9-9 a tax hike?
"I don't believe so," says Norquist. "The guys who created it -- I've talked to Rich Lowrie, who helped design it -- believe they created it to be revenue neutral. They're not trying to raise more revenue with taxes." That's key, because the long-term purpose of Norquist's tax activism, the so-called "starve the beast" plan, is to deny Washington the revenue it needs for more spending.
"Now," says Norquist, "There are two or three problems with the Fair Tax." (That's the national sales tax, a replacement for all income and FICA taxes, that Cain has long supported -- it's the eventual goal of 9-9-9.) "Because there is a transition period of some length with any tax phase-in, the fear that people have about the sales tax is that, at some point, Democrats win the House or the Presidency, and you get stuck with both the income tax and the new sales tax. Under 9-9-9 they deliberately set up a time period where you have three taxes. They say they are doing what some of us have feared could happen. Even if you say the income tax is going away, there's a chance of getting both."
Second problem: The sales tax has proven to be a "political loser" when torn apart in the heat of a campaign. Third problem: "Let's say you're 20 years old. You don't care what tax you pay -- you haven't paid any yet. But if I'm 65, I've spent my whole life paying income taxes. I'm about to stop paying them. What's the benefit to me if you bring on a sales tax? Thanks -- you've just made ever retired person's pension 33 percent less valuable."