Maybe Cain Was Not So Stupid

A year ago, I wrote a story about Herman Cain’s 9-9-9 plan and of course one leftist troll simply stated that Cain was nuts and didn’t bother with explaining why. Cain’s own philosophy was then, and still is, to find a path toward elimination of income tax in favor of a national sales tax. The beauty of Cain’s 9-9-9 plan was not only its simplicity, but the broadening of the tax bill of business tax, sales tax, and income tax. The broadening of the tax burden allowed for lowering marginal tax rates for both income and businesses. While 9-9-9 may be a way station for Cain to move toward a sales tax to replace the income tax, it also stands as a plan of its own. In addition, Cain added a version for inner cities that would have lower taxes, even further for urban areas struck down by poverty.

Cain’s own theories about tax reform are having their own effect upon many governors, who are leading the way to reforming taxes. Already, Florida, Texas and Tennessee have no state income taxes and other states are moving toward that direction. Bobby Jindal, who has been working on reforming education, is also looking to reforming the Louisiana tax system while eliminating business and income taxes in favor of a sales tax and North Carolina Republicans are looking toward following suit.

Kansas and Oklahoma are devising long term plans to replace their income taxes with energy extraction and expanded sales taxes, and Utah has its own tax cutting parade. One way to judge the success of these states is to observe where people are leaving and where people are going. California used to be the place where people dreamed of going, now it is a state where everyone is leaving, and it is Texas where people travel to. The south and sunbelt continue to grow while much of the northeast regions are seeing folks fleeing.

One reason is that many of the growing states are reducing taxes and regulations, nor does it hurt that many of these states have right to work laws, meaning workers actually have more rights as workers than in those states where workers are often forced to join unions and see much of their income diverted in the hands of union bosses.

Many of these states have advantages in that not only are they rich in resources, but they are taking advantages of those resources. While New York is debating whether to develop their natural gas and oil resources, states like Texas, North Dakota, Montana, Wyoming, and even blue states like Ohio are developing oil and gas, which is adding to their wealth.

In the south, we may be seeing a tax reform domino where in states like Georgia, legislators must ask themselves whether can they maintain a 6% income tax rate when they are being surrounded by states like South Carolina, Florida, and Tennessee with lower income taxes or no income taxes. Along Interstate 35 from Kansas City to Texas, you are witnessing another tax reform zone as Kansas and Oklahoma feel the pressure to compete with Texas.

Wisconsin governor Scott Walker and Ohio governor John Kasich turned deficits into budget surpluses without raising taxes while Illinois continues to sink economically after substantially increasing taxes. We are seeing a laboratory in which many Southern and Western states are adopting pro-growth while Illinois and California along with Northeast states are increasing taxes with very little growth-oriented policy. So far, the Republican and free market advocates are winning on a state level! While the national trend is going left, state trends are going the opposite way, the way toward freedom.

So the trolls who wrote to me about what an idiot Herman Cain is might want to see what is happening on a state level as many state governments are looking at some of Cain’s ideas and showing that moving from overtaxing income to becoming less dependent upon taxing income and broadening the tax base are good ideas.

 

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