NBC's Isikoff Warns Cain's 9-9-9 Plan May Mean 'More Pain' for 'Struggling Families'
On Saturday's NBC Nightly News, correspondent Michael Isikoff filed a report recounting criticisms of GOP presidential candidate Herman Cain's 9-9-9 plan, as Isikoff asserted that "critics see more pain, not gain, for struggling families." His report continued:
MICHAEL ISIKOFF: A family of four with an income of $50,000 could face a tax hike of more than $5,000, says one tax analyst.
PROFESSOR EDWARD KLEINBARD, USC SCHOOL OF LAW: Anybody who works for a living and has an income below six figures a year is going to find him or herself very sorry that they live in a 9-9-9 tax environment.
The NBC correspondent soon featured a soundbite of Cain advisor Rich Lowry which did not address the charge that the poor would pay more, as Lowry was instead shown arguing in favor of eliminating the capital gains tax to help increase investment.
But, on the same night's Huckabee show on FNC, host Mike Huckabee allowed guest Cain the chance to argue that his plan would not cause the poor to pay higher taxes because the 9-9-9 plan would also eliminate hidden taxes that increase the prices of consumers goods, thus allowing prices to drop as the sales tax is introduced.
Returning to NBC, Isikoff undermined Cain's plan as he concluded the report:
Nobody disputes that the 9-9-9 plan would radically change current policy. But while Cain says it will recharge the economy, his critics say there's no guarantee of that, and that his proposal would unfairly shift the tax burden away from the wealthy and onto working class Americans.
Below is a complete transcript of Isikoff's report from the Saturday, October 15, NBC Nightly News, followed by the relevant portion of Huckabee's interview with Cain from the same day's Huckabee show on FNC:
#From the Saturday, October 15, NBC Nightly News:
LESTER HOLT: As you heard, Herman Cain raised far less money in the third quarter than some of his opponents. But those numbers were, of course, tallied before his recent surge in the national polls which has brought Cain a new level of scrutiny especially over his 9-9-9 tax plan. Tonight NBC's national investigative correspondent Michael Isikoff takes a closer look at what Cain has in mind.
MICHAEL ISIKOFF: Herman Cain wants to cure the economy by dumping the tax code and replacing it with a simple formula.
HERMAN CAIN: 9-9-9
ISIKOFF: By slashing personal and corporate income taxes to nine percent and adding a nine percent federal sales tax, Cain says his plan will expand the economy by $2 trillion, create 6 million jobs. But critics see more pain, not gain, for struggling families. A family of four with an income of $50,000 could face a tax hike of more than $5,000, says one tax analyst.
PROFESSOR EDWARD KLEINBARD, USC SCHOOL OF LAW: Anybody who works for a living and has an income below six figures a year is going to find him or herself very sorry that they live in a 9-9-9 tax environment.
ISIKOFF: Rich Lowry is an investment advisor and free market enthusiast who developed Cain's economic plan.
RICH LOWRY, HERMAN CAIN ADVISOR: I just asked him how bold do you want to be. And with his signature smile and that big booming, you know, bass voice, he just kind of leaned in and said: Bold.
ISIKOFF: Bold under 9-9-9 means scrapping all personal exemptions and deductions for child care, tuition, and interest on home mortgages. And the national sales tax? Nine percent on top of state and local taxes, and no exemptions for food and medicine. Cain's 9-9-9 plan would eliminate all taxes on capital gains from the sale of stocks and bonds. Lowry says to free up money for new investment.
LOWRY: Risk taking drives growth. You have to allow risk taking to happen.
ISIKOFF: Nobody disputes that the 9-9-9 plan would radically change current policy. But while Cain says it will recharge the economy, his critics say there's no guarantee of that, and that his proposal would unfairly shift the tax burden away from the wealthy and onto working class Americans. Michael Isikoff, NBC News, Washington.
#From the Saturday, October 15, Huckabee show on FNC:
MIKE HUCKABEE: All right, you heard the criticism of Herman Cain's plan. We've got Herman Cain. He's joining us from Tennessee, and he's going to tell us why the 9-9-9 plan is a good one. Herman, you heard what was said, that this is going to hurt lower income people. True or not true?
HERMAN CAIN: That is false and here's why. And, Governor, thankfully, you pointed it out. What a lot of people don't understand is, the 9-9-9 plan and the sales tax piece is a replacement tax. We are going to replace invisible taxes that are embedded in all products and services with a visible tax, and, as a result of that, competitors are going to take out the invisible taxes so the costs of goods will go down, and when they pay the nine percent retail tax, they will essentially not be paying anymore because we're taking the invisible taxes that are embedded and replacing it with a visible tax of a nine percent retail sales tax.
HUCKABEE: And one of the - you talk about invisible taxes. Are you talking about the tax that is built in because of payroll taxesand the taxes on the products as they're being developed - corporations - and this is something I think a lot of people don't understand - corporations don't pay tax. They collect it- CAIN: Right. HUCKABEE: -but they pass it on to the consumer in the cost of whatever it is they're doing. Whether it's a product or a service. So you're saying that this is now transparent, you know exactly what you're paying.
CAIN: You're right, Governor. Let's take a loaf of bread. Well, the producer who makes the flour and he sells it to the baker, he's got to make a profit to pay his taxes, then the baker who bakes it has got to sell it to the grocery store. He's got to make a profit to pay his taxes. Well, then, the grocery store sells it to the consumer, then he's got to make a profit to pay his taxes. So you have all of those embedded taxes in the cost of that loaf of bread. What we do is we don't tax the production of that loaf of bread, those hidden taxes are pulled out, and you pay that nine percent because the costs of goods will go down. So it is not regressive on the poor. It liberates the poor because tax prices don't go up, number one, and they also don't pay any retail taxes on used goods, just like the fair tax.
HUCKABEE: You know, when you talk about a loaf of bread like that, I get the distinct impression that we get the heels and the government gets the loaf. It kind of sounds like that. But I want to ask, another criticism that Michael (Michael Linden of the Center for American Progress) leveled was that this hurts senior citizens. So that's going to be a question you'll have to deal with. What's the response?
CAIN: The response is it does not hurt senior citizens for the following reasons: If you're drawing Social Security, you don't pay taxes on your Social Security income. You've already paid it. If you have investments and you're living off dividends, well, guess what? You don't pay taxes on dividends twice. You've already paid it. Many seniors are living off of their Social Security as well as they're living off of their dividend income or they're living off of income they might have coming in from stocks. Things only get taxed once. That's a big advantage to seniors. So to say that seniors are going to be negatively impacted, no. And the goods and services that they buy, here again just like on the poor, prices are going to go down so they will not be negatively impacted by the retail sales tax.
- Brad Wilmouth is a news analyst at the Media Research Center
