PJ Media

Can Cain Sustain the Big Mo?

The GOP nominating contest has featured several conservative candidates who created some excitement, achieved good polling numbers, and then came rapidly down to earth. This list includes Minnesota Congresswoman Michele Bachmann and Texas Governor Rick Perry. The establishment candidate, Mitt Romney, has plowed ahead, with solid debate performances and steady polling numbers.

Now, Herman Cain — the candidate who, several months back, seemed one of the least likely to mount a challenge to Romney for the nomination — has pulled about even with him in the GOP race, and has become the darling, for the moment, of those who want a more conservative GOP nominee than Romney. Cain has replaced Perry, who had supplanted Bachmann on the right side.

Can Cain continue his charge, and become a real contender for the nomination, now that his candidacy and his signature issue — wiping out the federal tax code, and replacing it with his 9-9-9 plan — are getting more scrutiny? Cain’s appeal has several elements. In the debates, where several GOP candidates have unloaded on either Mitt Romney or Rick Perry, he has stayed positive. He communicates a warmth and optimism that stand out in a period when an overwhelming majority of Americans believe the country is on the wrong  track. Compared to Romney, who is seen by  many on the GOP side as a smart, capable businessman/politician whose views are malleable and can change as political circumstances warrant, Cain comes off as authentic and solid.

And then there is the 9-9-9 plan, a single phrase that has become the only campaign program of any of the candidates that can be easily identified and paired with that candidate.

Cain has bolted to the top of the race while several other conservative contenders, with little or no chance to be nominated, remain in the race.  If Bachmann does not win Iowa, or Santorum finishes way off the pace there, both will likely be gone from the race.  If Perry does very poorly in Iowa, it could be the death knell to his chances. If Cain finishes first or a close second in Iowa, and winds up as the principal conservative standard-bearer against Romney , he will still have a shot at the nomination, even if Romney wins both Iowa and New Hampshire. As the race moves towards primary days with several states voting the same day, if Cain maintains  high approval ratings and popularity, he could win some states, even if he is not well organized on the ground and has little ability to match Romney’s campaign spending.

However, the scenario just laid out is the most optimistic one than can be derived  for the Cain candidacy. There are many stumbling blocks along the way.  The biggest may be the 9-9-9 plan. Many people who have tried to run the numbers have concluded two things about  the plan: it is highly regressive, compared to the current tax code, and is likely to produce less revenue than the current system, not accounting for any growth bonus (more revenue from faster economic growth).

In general, wealthier Americans  spend a smaller share of their income than middle income or poorer Americans. This is particularly true among the very wealthiest people who invest a considerable share of their income. This means that the 9% sales tax will be close to a  9% income tax for many lower income people, while for wealthy people, the 9% sales tax will amount to less than 9% of income, or in some cases,  far less than 9% of income.  In essence, higher income people will pay lower average tax rates than the lowest income people.

Cain has argued that low income people will have some of their income excluded from the 9% income tax, and also contends that 9% is less than the 15% Social Security/Medicare tax that is now paid by all working people. However this is artificial, since the employee only pays half of that, and the remainder is paid by the employer, who is not obligated to provide the other half as additional income to the employee under Cain’s approach.

For many Americans, the plan will amount to an 18% overall income tax burden, with the sales tax effectively being a second  9% income tax.  This approach is more regressive than Steve Forbes’ simple flat tax from the 1996 GOP contest.

As for how much revenue the plan will raise, a lot will depend on details that have not yet been explained. How much is excluded from the income tax for lower wage earners?  What items are not subject to the sales tax? Cain has not helped his cause by revealing little more than to repeat 9-9-9 when asked for such details, and identifying only one advisor who helped him create the plan.

There is, of course, the possibility that such a plan, with permanent lower tax rates, would be stimulative and help create jobs, and  grow the economy (and tax revenues) more effectively than all of the Obama short-term fixes and patches. But that is not a certainty.

So far, Cain’s appeal among conservatives has not been matched among all voters in polls that look at head-to-head matchups with President Obama. Here, Romney runs better, with more appeal to independents. But Cain is a new phenomenon, and Republicans have been looking at the race and the candidates far more closely than other Americans. Romney is far better known nationally than Cain, and if Cain survives through the early contests, he will get a closer look and could build his support. There are few African Americans in the GOP primaries, but they make up 13% of the national electorate.  Were Cain the nominee, he figures to do far better with this group than Romney.

The next few weeks will be critical for Cain. Can he raise a lot more money? Can he get organizers for Iowa, a caucus state, and New Hampshire, the first primary state, where voters like  to be personally courted? Can be put some flesh on the bones of 9-9-9?  Can he become more comfortable talking about Afghanistan and other foreign policy issues? Can he broaden his team to give a hint at how he would govern? Cain’s sudden rise has likely surprised  him as much as everyone else. He now has an opportunity to become a serious contender, or the gaps will become more obvious, and he will fall off.