Cain refutes conventional wisdom

Herman Cain/Newt Gingrich

It is an exciting time for Herman Cain. Rasmussen Reports shows Cain defeating President Obama in their most recent polling.

The latest Rasmussen Reports national telephone survey of Likely U.S. Voters shows Cain attracting 43% support, while Obama earns 41%. Given such a matchup, eight percent (8%) prefer some other candidate, and another eight percent (8%) are undecided.

If the main argument against Herman Cain is that he can’t win a general election against President Obama continues to be erased by polling data that suggests otherwise, and he backs those polls up with increased fundraising and strong debate performances, what argument will media and establishment have against Herman Cain?

To put Herman Cain’s polling into perspective:

Rick Perry is the only other GOP candidate to have ever held a lead against the president in this cycle. That came just as the Texas governor entered the race when he was widely perceived as the front-runner. Perry now trails Obama by double digits.

Mitt Romney trails President Obama by just 2 percent in a matchup. Also worth noting is that Newt Gingrich appears to be on the rise in recent polling.

Former House Speaker Newt Gingrich is the only other candidate aside from Romney and Cain who earns double-digit support among likely Republican primary voters. He gets 10% backing, well behind Romney and Cain who each pick up 29% of the vote.


20 Replies to “Cain refutes conventional wisdom”

  1. Stan Gibilisco

    When people find out what’s in Cain’s 999 plan — how it would actually affect them in the real world — I suspect his numbers will gradually decline.

    I don’t think the 999 plan has a chance of passage, but it sure has stirred up a lot of discussion about tax reform. That’s good, I guess.

    Hopefully, by bringing the national sales tax option out into the light of day, responsible politicians can take the Senate’s recent 85-to-15 resolution against it a step further, and kill it off once and for all, or for at least another few years.

    If Cain actually gets elected President, and if his plan actually comes down to a vote in Congress, I sure hope they’ll make sure that they know what’s in it before they pass it. It’s an assault on the poor so thinly disguised that I can hardly believe people aren’t railing against it by the millions (yet).

    I’m with Romney. He’s the least weak and the least flawed of all the Republican candidates, in my opinion.

    1. Anonymous

      At least Cain has a plan Cory. Obama’s is to spend this country into the ground.

      I don’t care what the tax plan is. Let’s discuss it and be open to ideas across the board.

      I like Cain in the respect that he the only one discussing a plan.

      Other than Newt who I will probably vote for. Perry speaks to off the cuff, I’ll vote for Romney in the general.

    2. duggersd

      Cory, you are assuming all things stay the same and not figuring the actual costs. The plan actually decreases the COSTS for everybody. Because the corporate income tax is decreased to 9%, the costs of doing business will drop significantly. Perhaps you are unaware, but corporations do not pay taxes. Taxes are either passed on to the consumer or taken away from the employee in the form of wages not increased or taken away from the investor in the form of dividends not given. Because the corporate tax goes from 35% to 9% there is a significant decrease in costs which will get passed on to the consumer. Yes, it will because another corporation will and they have to remain competitive.
      Now, under the 999 plan, a family that makes $50000 would pay $4500 in taxes. Assuming every dime that family makes is spent, that would be another $4500 for total of $9000. Considering that person no longer is paying in to SS and Medicare, the family would save $7500 in payroll taxes. This is a difference of $1500. The only way that family pays $5000 more under this plan is if that family is currently getting more back in taxes than what they pay in. And that is welfare.
      As for used goods, what kind of a car do you drive? I just bought a 2003 pickup. There would be no sales tax on that. Did you buy your bicycle brand new? You could purchase a used one with no sales tax.
      Stan, you usually analyze things quite well, but I believe you need to think this one through a little more.

      1. Stan Gibilisco

        I think Herman Cain needs to think his plan through a little more, so that people in “peculiar situations” (like me) know what to expect.

        Nearly all of my income derives from copyright royalties. Right now I file a Schedule C. Because I have no dependents, no mortgage interest, and practically no business deductions (no overhead, no expenses!), I would probably benefit considerably under the 999 plan compared to my situation right now. But I can’t be sure.

        Will the “business flat tax” apply to my royalty income in addition to the personal income tax? The two incomes are in fact one and the same thing. If it’s taxed once it’s 9 percent, if twice, 18 percent. Of course, I could always incorporate and pay myself a dividend, so that would wipe out the “business flat tax” (which, by the way, is not the same thing as a corporate income tax as it exists today).

        Perhaps less tax, but a whole lot more paperwork.

        In effect I “sell” copyright royalties to my publisher. Would Herman Cain define it as a “retail sale”? (South Dakota does not, and most states do not, but Hawaii did when I lived there, so there’s no guarantee.) If not, then this tax would not apply to me, but I might have to register and file a return anyway (as I do for South Dakota). At best, this tax would not affect me at all. At worst, it could slap another 9 percent on me for a total of 27 percent. And that’s before I buy any used food, used pharmaceuticals, used lawyers’ services, used electricity, used heating fuel, or any of the other stuff.

        Fact is, I just don’t know what to expect. I’ve e-mailed the Herman Cain folks (from their Web site) and what do you suppose I have heard from them? I ask you, what do you fancy their response has been? Aloha! You got it. Silence.

        Noooo — Herman Cain needs to think this one through a lot more.

  2. Stan Gibilisco

    Please allow me to rant some more about Mr. Cain.

    Actually, I like the man’s demeanor, his candidness, and the fact that he doesn’t seem full of himself (ever keeping in mind, of course, that things are not necessarily as they seem). I also like the fact that he’s a black Republican!

    However, he has some obvious shorcomings, most particularly, his well-intentioned but ill-conceived tax plan and his lack of savvy in the international-relations realm. Here, I’ll focus on the tax issue some more, and put aside his electrified fences and what that sort of attitude could imply for, say, Pakistan or North Korea or Iran or Afghanistan or …

    As I said earlier in the thread, I have practically no deductions. Even in the absolute worst-case scenario where I could get hit with 27 percent tax on my income, it’s still beat my situation now — 15.3 percent self-employment tax along with roughly 15 percent income tax — before I bought anything. I don’t spend much on anything except necessities like food and medical care, and I can’t get those things “used.”

    The other day, Mr. Cain reiterated that his reduced tax burden on corporations would get passed along to consumers in the form of lower prices, which could offset the sales tax or maybe even more than offset it. My response, a la Tom Leykis (a hangover from my days in L.A.): “Oh, reeeeeally?” Like the way the banks have passed along their bailout money. Like the way the insurance companies have passed along their bailout money. Mmmm-hmmm.

    Then Mr. Cain went on to say that people could change their behavior by consuming less. Okay, fine. Good idea. But here’s the rub: If everybody cuts their consumption by, say, 9 percent on taxable goods to make up for the additional expense, how will that “create jobs”? It seems to me like reduced consumer demand would not create jobs, but kill them.

    He rails with his “9, 9, 9, jobs, jobs, jobs” plan and people just go wild, they just cheer and jump and smile, they do just like they did when Barack Obama appeared in his rock-star-like performances in 2008. Well, if people are stupid enough to buy into Herman Cain’s 999 plan, they’re stupid enough to elect him president, and stupid enough to deserve what will happen to them if that plan actually defeats all odds and gets passed into law.

    Noooo — As much as I like the guy, I can’t vote for someone who would sock the poor with such abandon, and who seems utterly ignorant of the backlash that such an action would ultimately cause.

    Not to mention electrocuting wayward, hungry Mexicans.

    1. 605

      “Hope” and “change” for 2012?

      People like simple.

      I for one don’t think Cain needs to be married to his tax plan. The main theme of his plan is that we need to throw out the current tax code. That theory alone makes him viable to me.

      1. caheidelberger

        Wow: so you’ll vote for theory over workable plans now? What are you, some kind of Berkeley liberal? Unbelievable the philsophical contortions to whcih you guys will resort to justify your preconceived notions. Cain has no plan. He’s got slogans and Koch money. What little he has proposed immediately and directly raises taxes enormously on lower- and middle-income Americans. You’re dupes to back him.

    2. duggersd

      The way I read it you would be taxed 9% as income. Keep in mind you are no longer paying the 15% self-employment tax. About the costs being passed on to the consumers, let us take a basic item like a washing machine. If the price of producing that washing machine were suddenly reduced by let’s say 25%, would the maker continue selling it at the old price? Yes, if that was the only maker. However if there is more than one maker, then they either collude or compete. If they compete, the other maker will cut the price. They will continue until they arrive at a price they can continue to stay in business.
      BTW, have you checked into getting a mortgage lately? They are going for around 4%. 12 years ago, I think I paid 7%. But that is not due to bailouts. It is due to competition.
      About the added revenue stream. One of the facets of his plan is requiring Congress to pass a 2/3 (if memory serves me correctly) majority to increase taxes. That should stop most tax increases.

      1. Stan Gibilisco


        Thanks for bringing up the mortgage issue! I’ve been looking at a cute little acreage in Wyoming with three rental units on it. If I can sell a bit of land here near Lead to make the down payment, I could more than pay off the mortgage with the rent I would get. In addition, as I understand it, all of that mortgage interest would be tax deductible! I could turn a few hundred extra dollars a month into a real estate investment trust … well, doggone it, I really would rather just sit in a corner and write books.

        My point? Under the Cain plan, that mortgage interest would no longer be tax deductible. (To be fair, many of the plans put forth recently would do the same thing.) That would cut my profit in half, or maybe even more — a disincentive to go through with the deal in the first place. Multiply that by a few hundred thousand dreamy land-baron-wannabes nationwide, and you get nothing but trouble.

        If I understand it right, most plans recently proposed would get rid of the mortgage interest deduction only for second homes or vacation homes or rental properties, not for primary residences. But the Cain plan would get rid of it even for primary residences. What sort of effect would that have on existing homeowners (unless they were “grandfathered”) with big mortgages? You guessed it — a foreclosure spike! And it would also discourage a lot of would-be homeowners from taking the plunge. Maybe that’d be a good thing in the long term, but it the short term it would unjure an already anemic housing market. It would cause home prices to decline, most likely, good for the buyer with cash, bad for everyone else.

        If you’re right about how my income would be interpreted, Dugger, then one might wonder why I’m not drooling all over the prospect of the Cain plan. Two reasons: (1) It’s regressive and unfair, and (2) I just don’t trust politicians with any new source of revenue. I might add a corollary (2a) I don’t trust any massive tax reform proposal, for, as Crazy Shelley might say, “The devil’s in the details.”

        I guess I’m also rather cynical, as anyone who has followed my blant (blog rant) trail herein can see by now. I’m inclined to look with a jaundiced eye on any big tax reform proposal that comes up suddenly as the Cain proposal has. Someobody’s going to get hammered, and it could be me. Even the tax director in the State of Hawaii admitted to me, when I lived there, that the way the code treated me was strange and unfair. (Postscript: I survived anyway, and even thrived there, dammit! You’ll have to try harder to do me down, you masters of fate.)

        My proposal, then? Like the doctor treating a sick patient, first, do no harm! For now, leave the tax code alone. Cut spending, and get things stabilized. Over the long term, make a series of minor tweaks, not one massive change all of a sudden (which no one knows anything about, least of all, it would seem, its authors).

  3. Stan Gibilisco

    He’s already using wind power! It’s working, too, evidently. Question is, do we have Hurricane Herman or merely a transient thundershower?

    Incidentally, 605 makes a great point. If Cain were elected, the tax reform discussion would certainly take off. It already has now, thanks to him.

    I doubt that the 999 plan will get implemented in anything like its current form. More likely, we’ll end up with something more like what Paul Ryan proposed in his deficit-reduction plan.

  4. caheidelberger

    Cain raises taxes on 80% of Americans, then pretends that the upper 20% will decide out of the goodness of their hearts to share their gains with everyone else. Stan’s right: that’s a pipe dream. And when mitigating the effects of the plan depends on telling 80% of Americans to buy all their clothes at Goodwill, I have to wonder just what sort of third-world country you want America to become. (And I say this as a regular Goodwill shopper.)

    1. LK


      If people don’t want to click on your link, I’ll just cut and paste a paragraph to make it easy for them.

      “A middle income household making between about $64,000 and $110,000 would get hit with an average tax increase of about $4,300, lowering its after-tax income by more than 6 percent and increasing its average federal tax rate (including income, payroll, estate and its share of the corporate income tax) from 18.8 percent to 23.7 percent. By contrast, a taxpayer in the top 0.1% (who makes more than $2.7 million) would enjoy an average tax cut of nearly$1.4 million, increasing his after-tax income by nearly 27 percent. His average effective tax rate would be cut almost in half to 17.9 percent. In Cain?s world, a typical household making more than $2.7 million would pay a smaller share of its income in federal taxes than one making less than $18,000. This would give Warren Buffet severe heartburn. ”

      Until someone can refute Gleckman’s numbers, I’d say that the only way Cain is confounding convential wisdom is by being rather transparent about his efforts to eliminate America’s middle class


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