One of the more exotic policy tendencies of Wingnut World is a history of strong and pervasive support for replacing income taxes with higher consumption taxes. Many conservatives support this step on grounds that it will promote savings and investment, which is another way of saying that they believe capital should not be taxed at all. Others like the idea of getting rid of the compliance costs and “bureaucracy” associated with income taxes, and still others are attracted to the “flat” nature of consumption taxes, which do not vary based on the taxpayer’s personal circumstances (whether it’s income, or the various characteristics that earn deductions and credits against income tax liability).
The so-called “Fair Tax”—the general term used for any number of schemes for shifting from federal income to consumption taxes—has been a hardy perennial for years among conservative activists and talk show hosts. Among the latter was Herman Cain, whose so-called 9-9-9 (replacing current federal income, capital gains and estate taxes with a 9 percent national sales tax, a 9 percent VAT on corporations, and a 9 percent income tax with no deductions or credits) plan is explicitly advertised as an intermediate step towards a “Fair Tax.” Like the “Fair Tax,” Cain’s plan seems to have great curb appeal for rank-and-file conservatives, but less so for opinion-leaders.
Cain’s recent surge in the polls as a presidential candidate has suddenly put 9-9-9 and the broader movement to get rid of progressive income taxes under a microscope. On the eve of Tuesday night’s candidates’ debate in Las Vegas, the Urban Institute/Brookings Tax Policy Center published an analysis of the distributional implications of Cain’s proposal that immediately became fodder for his rivals and for critics generally. Faced with claims that 9-9-9 would boost total taxes for most American households with annual income under $200,000, Cain was reduced to repetitive denials without much in the way of explanation. Even among conservatives who are not troubled morally or politically by the idea of making federal taxes massively more regressive, the argument that 9-9-9 would give Uncle Sam a new instrument for confiscating private dollars (the national sales tax) is getting some traction. One of 9-9-9’s designers, the ubiquitous Steven Moore, is already urging Cain to replace the sales tax proposal with a 9 percent payroll tax.
There is virtually no broad-based polling of 9-9-9 available (figuring out how to describe it in a survey question is a real challenge, particularly since Cain and his advisers are not always very precise). But a new HuffPo/Patch survey of activist leaders in early caucus and primary states (whom they call “Power Outsiders”) shows lukewarm support at best.
The timing of the intra-party assault on Cain’s signature domestic policy proposal is no coincidence. It is based on the belief that he is a flash-in-the-pan phenomenon whose lofty support levels represent a “parking place” for conservatives who don’t like Mitt Romney but haven’t been sold on any of his competitors, and find Cain interesting and refreshing, not to mention his usefulness as an all-purpose antidote to suspicions that conservative hatred of Obama is at least partially racial in origin.
Tuesday night’s debate represents a transition point from a six-week stretch of frequent debates, to the run-up to actual voting events. Earlier this week another important piece of the nominating contest puzzle fell into place when Iowa set a firm date of January 3 for its “First-in-the-Nation Caucus.” There remains a not-insignificant chance that New Hampshire will schedule its primary for early in December in order to avoid too-close proximity to Nevada Caucuses currently planned for January 14, though it’s more likely that Nevada will move a few days in order to let NH have its event on January 10. Any way you slice it, though, candidates have a relatively brief window of time to get their act together before voters in the early states begin to become distracted by the holidays, which will also make negative campaigning problematic on grounds that it conflicts with the “spirit of the season.”
With Mitt Romney presumed to have a commanding lead in two of the five January events (NH and Nevada), developments in Iowa, South Carolina and Florida are of particular interest at this juncture. New NBC/Marist polls in SC and FL show Cain and Romney basically tied with just under a third of the vote each, with Perry mired in the high single-digits. This state of affairs is close to where the most recent polling in Iowa has placed the race there as well. If, as the conventional wisdom suggests, Cain soon begins to lose support because of attacks on 9-9-9, his lack of policy sophistication generally, or simply the fading novelty of his candidacy, the big question is whether those votes go back to Rick Perry, are scattered among various candidates, or even go in significant numbers to Mitt Romney. In any event (barring a December NH primary), media coverage of the campaign will now focus ever-increasingly on Iowa, where the picture is complicated by the relative importance of the “ground game” and Romney’s decision so far not to seriously compete in the state. Cain’s organizational weakness in Iowa is perhaps best illustrated by the fact that his former state director (who quit because her candidate seemed to be ignoring the state) just signed up for a less elevated job with Rick Santorum. So in the place where the 2012 nominating contest formally begins in less than eleven weeks, the two front-runners in that state and nationally are not really running at all. Something’s got to give, and soon.
Photo Credit: Gage Skidmore


At a time when we are constantly being told that no one in America cares about anything other than the economy, one of Wingnut World’s most durable forums for people who intensely care about cultural issues was held this last weekend. The Value Voters Summit, sponsored by the Family Research Council, attracted every significant GOP presidential candidate other than Jon Hunstman. But as has often been the case, the controversial nature of the event’s sponsors and speakers overshadowed anything the candidates had to say.
President Obama’s tax offensive may be aimed at energizing his despondent base, but it’s also touching a nerve with the broader public. A new Gallup poll finds that Americans overwhelmingly (66 percent) back the president’s call to raise taxes on families making more than $250,000 and individuals making more than $200,000.
When you compromise between a good plan and a bad plan, you get a less good plan. So what happens when you compromise between two bad plans? We’re about to find out, as Congress this week tries to reconcile deficit reduction blueprints drawn up by House Speaker John Boehner and Senate Majority Leader Harry Reid.
Not a moment too soon, the Gang of Six has resurfaced in the U.S. Senate, breathing new life into hopes for a bipartisan “grand bargain” on deficit reduction.
The stock market plunged over 150 points yesterday as Republicans hardened their stance in debt reduction talks with the White House. The sharp drop was a timely reminder that a political failure to raise the debt ceiling would be a body blow to America’s already weak economy.
Last week, President Obama vented his frustration at Congressional Republicans for storming out of White House budget talks over raising the debt ceiling. Anyone who thinks the president overreacted should look to the Congressional Budget Office’s (CBO) latest budget
In the GOP’s Establishment v. Tea Party battle, this round, at least, looks like it was won by the outsiders. And, so it seems, the Establishment looks to be fine with that.
Ideological litmus tests have always been a big feature of Wingnut World, with Americans for Tax Reform chief Grover Norquist’s “pledge” against support for tax increases being the most famous example. Grover’s pledge has been in the news lately, as Senate Republicans grappled with the question of whether a vote to kill tax incentives for ethanol development would run afoul of Norquist, who has always demanded that any revenue-enhancing action to close off a tax loophole be paired with a tax cut to make the action revenue-neutral.
The Tax Day (or more accurately, Tax Weekend) observances of the Tea Party movement weren’t as large or well-publicized as in the past, but they did reflect the hardening consensus of conservative activists against both the appropriations deal just agreed to by congressional Republicans, and the coming legislation increasing the public debt limit. This consensus is being reinforced by potential presidential candidates and other opinion leaders who are encouraging the perception that the Beltway GOP is once again “selling out” the conservative movement and its latest Tea Party incarnation.