Cain's Plan May Not Need a Sales Tax

Republican presidential candidate Herman Cain has done the nation a great service by proposing major changes in the byzantine way the U.S. government collects its revenue.  Cain maintains that his so-called "9-9-9" plan restructures the nation's tax system in a way that significantly boosts real growth.  He also claims that his program is revenue-neutral.  This means that it is designed to replace the revenues generated by the current tax system. Restructuring the U.S. tax system along the lines Cain proposes might promote explosive economic growth.  However, there are serious problems with tax proposals that claim to be revenue-neutral.  One potential flaw is a tendency to assume that individuals will behave the same way regardless of the tax system.  If this were true, there would be no reason to change the current system. The main reason to change the tax structure is to remove impediments to economic growth.  If the new structure succeeds in...(Read Full Article)

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