Herman Cain may be only the Republican flavor of the week, but he is the frontrunner and he is actually going to campaign in Arkansas next week, seven months before the usually insignificant Arkansas primary. We are flyover country for all the others.
The theory goes that a firebrand populist government hater like Cain is just the kind of Republican who could not only fetch Republican votes but also overcome blue-collar racial bias in Arkansas. After all, he’s leading in places like South Carolina, where bigotry is still ascendant, and among corn-fed Iowans.
It is a nice theory. It might work if Cain could keep up the populist charade through a long campaign when people would start to look behind catchphrases like “fair tax,” 9-9-9 and “save Social Security” and see what Cain actually wants to do.
Were Herman Cain not an African-American and something of an authentic self-made man, no one would hesitate today to call him an oligarch. His political career and his campaign for president are managed and heavily bankrolled* by the billionaire Koch brothers and the rich boys club, Americans for Prosperity. They want to eliminate taxes on the rich and corporations, remove environmental restraints on the oil and gas industry, turn Social Security over to Goldman Sachs and Merrill Lynch and wipe out unions. Cain is their apostle but he is not their only Manchurian candidate. Even Mitt Romney, who a few years ago loved to tax corporations, is suitable. They know Cain will never be president.
One reason that Cain may be momentarily atop the polls is that, unlike Romney and all the rest except the iconoclast Ron Paul, he hasn’t changed his stripes to fit into the milieu. Well, not until this week, when Cain said he had been spoofing when he told cheering crowds that he would wall off Mexico with a high-voltage fence and electrocute Mexicans who tried to get through it. But unlike the others he even stands by his stance on Social Security. He would take a cue from Chile and require people to send part of their paychecks every week to stockbrokers to invest for them in lieu of Social Security.
Cain’s tax reform, which he calls 9-9-9, has helped raise him in the polls. Everyone loves simplicity. The phrases are appealing but the mechanics appalling. You have to assume that people would get it if it comes down to him and Barack Obama.
He would replace all federal taxes — individual and corporate income taxes, and social security, Medicare, disability, unemployment, gasoline, cigarette and all other excise taxes — with three simple tax rates: 9 percent on personal income, 9 percent on business income and a 9 percent sales tax on all commercial activity. That sounds fair enough. There would be no exemptions and deductions. Well, only a few. Investment income — capital gains, interest and dividends, the income of the leisure class — wouldn’t be taxed at all. Your Social Security? Yes, tax it. As for the 9 percent business tax, it would apply only to the share of a company’s revenue that was spent on wages.
It would be a mammoth tax cut for the rich and corporations and a giant tax increase for the middle class, the elderly and disabled. For the 47 percent of tax filers whose incomes were so low after the standard deductions and credits last year that they owed no taxes, they would pay 9 percent of their gross income plus a 9 percent sales tax on everything they bought, from a haircut to a hospital visit. Citizens for Tax Justice put its calculators to work. The richest 1 percent of Americans would pay an average of $210,000 less a year while the poorest 60 percent would pay an average of $2,000 more. The government this year would take in $340 billion less. Add that to the national debt.
But the 9-9-9 reform would be only to get working people used to paying a bigger share of the cost of government. After several years of personal adjustment, those taxes would be halted and the country would go to a 30 percent national sales tax on every single commercial transaction.
Tea party crowds cheer when Cain and the Fair Tax’s other adherents say the IRS would be abolished. States would collect the taxes. But think what kind of bureaucracy the state would have to erect to enforce a law that requires everyone who sells something — from your lawn man to, as former Gov. Huckabee liked to say, a prostitute, pimp or drug dealer — to collect and remit a mammoth tax on penalty of prosecution.
You want another tea party rebellion? Try that.
*A spokesman objects to Dumas’ characterization of AFP “bankrolling” Cain’s campaign (through its promotion of him in ways that have enhanced his public profile). AFP makes no direct contributions to the campaign and is prohibited by its nonprofit status from participating in partisan politics.