Herman Cain is a man with a plan, he is sticking to it, and because of his bold, clear message he has seen an impressive boost in the polls. While 9-9-9 is “bold and simple,” if history is a lesson it is foolish to think that some Congress in the future will not turn it into 20-20-20 or higher!
In 1913 the 16th Amendment was passed and for the first time a permanent income tax was established in America. As always, it was sold as a tax on the rich to support World War I. Depending on the bracket you were in taxes ranged from 1% to 7%. However, it only took the government five years to hike the rates to 6% all the way to 77% with a bunch of new brackets in between – way more than we have today. The top rate did not drop below 50% until 1924 and then to 25% in 1925 – thanks to President Calvin Coolidge (more on this here).
The point of that history flashback is to understand that government cannot be trusted to make good on tax promises (and most everything else too). Prior to the 16th Amendment some politicians and concerned citizens argued that the top rate of 7% might become an unthinkable 10%. Income tax supporters laughed that off as outrageous and a wild exaggeration. Since then the top rate has been as high as 94% (1944-1945) and over 90% from 1946 – 1963.
While Cain is on the right track by pressing for a bold restructuring of our tax system he is going at it the wrong way. I am sure his plan simplifies a lot of the tax code. I am sure it will be an improvement to the current system. But how long will that last? How long will it be before 9-9-9 is increased on everyone and used as a class warfare tool like the current progressive tax code? Then Americans will not only be under pressure to pay federal income taxes along with state and local taxes, but a new federal sales tax will be on top of it all. It is that new form of taxation that Harry Reid probably thinks “makes sense.”
With exception to the 9-9-9 plan Cain has earned some of my respect and support. I would absolutely love to watch him go head to head with Obama. He has proven capable of defending himself against experienced and polished Republicans in the primary debates and I am certain he can more than hold his own in the general election. But perhaps his lack of experience in public policy (which I do not believe is a prerequisite), or at least tax policy and it’s history in America may be a weakness for Cain as well as a strength. Personally, I’d much rather see a flat tax system or if the 16th Amendment could be abolished then a Fair Tax system. But ultimately it will take a bold Congress as well as a President that is willing to take action to lower taxes and shrink the size of government.
For a historical chart of federal income tax rates click here.