Team Perry has released a new video to provide air support for the jobs plan he released last week. Take a look.
The Perry plan is here. As I wrote on Friday, this plan is a game changer for several reasons. It focuses on rolling back the executive branch regulatory excesses of the Obama administration and gets America back to rationally exploiting our real national wealth. It reduces the politics in our energy decisions. In doing all of that, it should put many Americans to work immediately in the energy sector and spur growth across the economy by helping bring fuel prices back down. Perry’s plan also focuses on legitimate use of the president’s executive authority, in a way that doesn’t depend on Congressional action. That means his plan is likely to get implemented; he alone will be accountable for making it happen. Compare the Perry plan’s clarity and simplicity with Romney’s 59-point plan that looks a bit like a wall of text designed to obscure accountability. Pound for pound, Perry’s is the strongest and most far-reaching economic and security plan on the table.
Meanwhile, Herman Cain’s 9-9-9 plan is attracting scrutiny and not holding up very well. Peter Schiff, the CNBC analyst whose comments inspired the Tea Party movement, says the Cain plan has a hidden fourth 9: The payroll tax.
Much of the plan’s virtue lies in its elimination of Social Security and Medicare taxes (payroll taxes) that fall heaviest on lower income workers. This includes the 6.2% Social Security tax and the 1.5% Medicare tax paid directly by the worker. But it also includes the 6.2% and 1.5% portions paid indirectly by workers through their employers. Payroll taxes are, in reality, a cost of employment. From the employer’s perspective these costs are part of the wage package. Absent these taxes, employers could raise wages by an equivalent amount without raising labor costs. Inclusive of this portion, payroll taxes currently cost workers 15.4% of their wages.
The Cain plan scraps this tax. But the elimination of wage deductibility from corporate taxes replaces it with a 9% payroll tax. Therefore a more honest name for Cain’s proposal is the 9-9-9-9 plan. The forth nine changes everything.
Read the rest. Schiff doesn’t dismiss 9-9-9-9 out of hand, but says that without significant spending cuts to accompany it, it won’t work. And we’ve seen what even some of the best in Congress consider “significant” spending cuts. For the most part they’re actually not significant at all.
I just don’t think 9-9-9 survives contact with Congress intact. Whatever party they happen to be in, there are just too many Beltway creatures who can’t help tinkering with the tax code for all kinds of reasons. The Byzantine tax code we have now serves their interests and they’re not about to give that power up without either a very significant fight or a very compelling reason to do it.
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