Friday, October 14, 2011

Cain's Gimmickry?

Gimmicks are the mother’s milk of candidates for most any office, not least because they seem to provide both simple and immediate answers to problems that are far too complicated for either easy or quick solutions. In 2008, Senator McCain had a huge problem occasioned by the fact that his campaign, if not completely bogged down, was going nowhere fast. Solution: Put Alaska Governor Sarah Palin on the ticket, never mind whether or not she had any presidential credentials. She was a woman. This was the penultimate in gimmickry. It didn’t work for McCain, of course, but it made an instant celebrity of Palin, not to mention a very wealthy person account her being exponentially opportunistic and smart enough to milk the whole sordid affair for every last cent.

This is not to imply that Palin was anything but bright. And she was far better prepared for the presidency than Obama but that doesn’t mean much in terms of conducting the office. One of Obama’s gimmicks as president has been speechifying, thus freeing himself from the rigors of governance through keeping the minds of the people on his words, not his actions or inactions. This has involved a certain amount of egomania, such as exhibited in his recent speech to Congress, conducted in the imperial pomp and circumstance of a state-of-the-union message, notwithstanding its importance being neutered by its postponement account another political circus (one of those squirrelly debates that mean nothing) and then having its schedule determined by a ballgame.

The best example of gimmickry currently may be the “9-9-9 tax-plan” espoused by republican candidate Herman Cain. This is not to say that Cain is not a knowledgeable and valid office-seeker. It is to say that he has brought it forth summarily without a thorough explanation of how the plan works. Indeed, even he has indicated that it is still in the working stage. He has made significant changes in it as the campaign has progressed. No one seems to know precisely what it is and can’t know as long as he changes his mind about it.

Apparently, his main selling point has been that the plan will bring in as much revenue as is currently being brought in under the current system, but that the sources of the revenue will be reconfigured so that everyone will suffer less and be happy. There would be a flat income tax of 9%, a flat corporate tax of 9%, and a flat sales tax of 9%. With the exception of the latter, the other rates are considerably lower than current rates, at least for those actually paying taxes, remembering that 46% of the population pays no taxes now. Presumably, his program would affect some or most of those people with respect to only the sales tax.

Forty-five states raise revenue through sales taxes, with California’s the highest at 8.25%. Adding a 9% federal sales tax would bring that burden to an intolerable 17.25%. Imagine paying $234.50 for a lawnmower costing $200. Does Cain mean to place a 9% sales tax on food? A family of four with an annual income of $35,000 has to eat as much as a family of four with an income of $100,000. If each family spends $600 a month on food, the former will have $27,800 left at the end of the year while the latter will have $92,800. Cain’s plan hurts the worse-off people big-time while not materially affecting the better-off.

Consider those two families with respect to the 9% income tax. The former will pay $3,150 in taxes and have $31,850 left while the latter will pay $9,000 and have $91,000 left. Again, Cain’s plan hurts the worse-off while greatly benefiting the better-off. The former is in the current 25% bracket while the latter is in the 28% bracket, another example of benefiting the better off at the expense of the less well off. The earner making $400,000 is now in the 35% bracket (taxes=$140,000) but in Cain’s 9% bracket he would pay $36,000, a huge benefit of $104,000, three times as much in tax-break alone as the $35,000-a-year guy makes in wages.

Actually, there’s no argument with the income-tax aspect. People should have the right to equitably keep what they earn. Everyone receives the same government-services as everyone else, but Cain will have a hard time selling this since the nation has been in “progressive-tax mode” for decades. His 9% sales tax is too off-the-wall even to consider, especially if it applies to food and is added to the already over-the-top gasoline taxes charged by states and the federal government.

So…is Cain indulging in gimmickry that sort of sounds good until examined carefully? The Kentucky sales tax on automobiles is 6%, high enough. Adding 9% to that in buying a car for $25,000 means paying a tax of $3,750 or $28,750 altogether in one of the poorer states. That will be a hard sell.

Sounds like gimmickry!

And so it goes.
Jim Clark


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