Scrapping the Sales Tax From 9-9-9?

Reporting on Politics and Policy.
Oct. 18 2011 2:59 PM

Scrapping the Sales Tax From 9-9-9?

James Pethokoukis finds Stephen Moore considering the option, as he predicts that 9-9-9 will put the economy "on steroids."

David Weigel David Weigel

David Weigel, a former Slate politics reporter, is a reporter for Bloomberg Politics

Art Laffer and I helped design the plan. But I’ve come to the conclusion that the American people and the voters do not want a national sales tax. He’s going to have to replace that national sales tax with a 9 percent payroll tax. And if you do that it’s a total winner.
Advertisement

This doesn't make sense. 9-9-9 is a multi-stage plan, and the final stage is the Fair Tax -- a 27 percent sales tax. As designed the plan just gets people ready for a sales tax that has 12 or more years of Republican thinking behind it. Take this analysis, for example -- it's from 1995.

This is the only plan that fixes every one of the defects of the current income tax system. Here is how:
1) Because the sales tax exempts all savings and investment, the double taxation problem would be eliminated. Because the sales tax is a single flat rate, the disincentive effects from high marginal rates would be eliminated.
2) The sales tax eliminates the income tax entirely. Compliance costs would be substantially reduced.
3) The sales tax would virtually eliminate the Internal Revenue Service. The sales tax is the only plan that solves the invasive nature of the current system.
4) A sales tax would be paid by consumers every time they purchased a good or service at the cash register. The tax would appear on the receipt. Hence, the sales tax is one of the most visible taxes.

The author of that analysis was Stephen Moore, then at Cato. My point: Cain really believes in phasing in the sales tax. So, at one point, did Moore. And now, because the tax is politically tricky -- despite all of the economic benefits Moore sees -- it can be scrapped? This is serious tax policy?

David Weigel, a former Slate politics reporter, is a reporter for Bloomberg Politics

TODAY IN SLATE

Politics

Meet the New Bosses

How the Republicans would run the Senate.

The U.S. Is So, So Far Behind Europe on Clean Energy

The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers

The Best Thing About the People’s Climate March in NYC

Friends Was the Last Purely Pleasurable Sitcom

The Eye

This Whimsical Driverless Car Imagines Transportation in 2059

Medical Examiner

Did America Get Fat by Drinking Diet Soda?  

A high-profile study points the finger at artificial sweeteners.

A Woman Who Escaped the Extreme Babymaking Christian Fundamentalism of Quiverfull

John Oliver Debunks the Miss America Pageant’s Claim That It Gives Out $45 Million in Scholarships

Trending News Channel
Sept. 20 2014 11:13 AM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Over There
Sept. 22 2014 1:29 PM “That’s Called Jim Crow” Philip Gourevitch on America’s hypocritical interventions in Africa.
  Business
Moneybox
Sept. 22 2014 1:37 PM Subprime Loans Are Back! And believe it or not, that’s a good thing.
  Life
Outward
Sept. 22 2014 2:55 PM Nuptial Expert Sarkozy Worries About Gay Marriage and the Family
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Plus
Sept. 22 2014 1:52 PM Tell Us What You Think About Slate Plus Help us improve our new membership program.
  Arts
Television
Sept. 22 2014 2:12 PM Crusader, Sans Cape The superhero trappings of Gotham are just a clever disguise.
  Technology
Future Tense
Sept. 22 2014 12:14 PM Family Court Rules That You Can Serve Someone With Legal Papers Over Facebook
  Health & Science
Bad Astronomy
Sept. 22 2014 11:23 AM Two Impacts, One Landslide … on Mercury
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.