Tag: Tax policy

Herman Cain Wants You to Try the New 9-9-9 Recipe

Godfather of gold ties and GOP Presidential candidate Herman Cain has taken a lot of heat for his 9-9-9 tax plan. While it has a nice ring to it, not too many people are crazy about 9-cubed including his fellow GOP hopefuls, their tax taskmaster Grover Norquist, and every tax wonk within the DC delivery area.

Sensing something needed to be changed, Cain got his economics advisor accountant and whomever else is crunching the numbers to go back to the drawing board. And what did they come up with, you ask? Are they throwing in free bread sticks? Fresher ingredients? A gluten-free crust stuffed with cheese? Nope! That would just cause more confusion, so they just dropped a nine:

For people living under the poverty line, “your plan isn’t 9-9-9, it’s 9-0-9,” Mr. Cain said in a policy speech in Detroit. “Say amen, y’all. If you are at or below the poverty line…then you don’t pay that middle 9” – i.e. the individual flat tax.

Mr. Cain’s bold 9-9-9 plan – which includes a 9% individual flat tax, a 9% business flat tax, and a 9% national sales tax – has helped vault him into the top tier of GOP presidential candidates.

But free bread sticks would still be nice.

Herman Cain Tweaks 9-9-9 Tax to Remove Flat Tax for Poorest Americans [WSJ]

Who’s Afraid of Tax Reform?

The last time I saw the family dentist while I was in college, he asked me what I was studying. When I told him I was studying tax accounting, he got a strange, smug look on his face and asked, “what are you going to do when there is a flat tax?”

It’s been almost 30 years since I saw that dentist, and so far I’ve dodged the flat tax bullet. There has been one big tax reform since I started public accounting, and next to getting fired by good old Price Waterhouse, The Tax Reform of 1986 has been the best thing that happened to my career.


The 1986 Tax Reform Act’s 25th anniversary is tomorrow. With talk of radical tax reform in the air, from Herman Cain’s 9-9-9 plan to Rick Perry’s embrace of an old-fashioned flat tax, young tax nerds may lose sleep worrying that this time tax careers really will be legislated out of existence.

Go back to bed. For young tax nerds, radical change can be a huge career boost.

The 1986 tax reforms were enacted during my third year out of school. The local office of my national firm was going to put on a big client seminar, and I was put in charge of organizing the presentation. In the pre-Internet days, we got one paperback copy of the legislation, which I tore apart at the bindings so the presenters could have their part of the law. I proofread the slides, sent them to the photographer, and then manually arranged the presentation in the slide carousel (there was no PowerPoint, kids).

The seminar came off well (I did passive losses), which helped keep me (and the evil manager who didn’t like me) from getting me fired again. But in the following weeks the real benefit began to dawn on me — thanks to tax reform, I suddenly knew more about most of the tax law than everybody in the office who outranked me — including the evil manager. It got me promoted quickly, and it gave me much-needed credibility a few years later when a bunch of us went over the wall to start a new firm.

If there is radical tax reform, it will trash a lot of accumulated tax trivia knowledge that experienced tax nerds trade on. But it will also create huge opportunities for young, smart nerds who are willing to learn the new rules. It will be a great leveller in the profession, and a huge advantage to the young and strong.

But it will probably make it almost impossible for me to sell my collection of 1986 Tax Act books for a good price on e-Bay.

Frank Wolf Has Grover Norquist’s Attention

Earlier we learned that Virginia Congressman Frank Wolf is completely creeped out by Tax Terminator Grover Norquist’s BSD status in the Republican Party.

It’s been bothering Mr. Wolf so much that his “conscience” compelled him to give a speech on the House floor today to remind everyone what kind of Grover company keeps (i.e. the “unsavory” kind).

And since Grover has Viking DNA coursing through his veins, you’d be a monkey’s uncle if you thought that he was going to let this shit slide:

Norquist branded Wolf’s speech a “hissy fit” and a “compilation of whack job criticisms.” He added that he thought the Virginia Republican, one of the relatively few GOP members of Congress to have not signed the tax pledge, was lashing out at him because he did not want to call out his Republican colleagues. “He is the only Republican arguing that tax increases are a good idea,” Norquist told The Hill. “What he has is a problem with the American people and the modern Reagan Republican Party.”

But hey, GN is old political cat; he knows how the game is played:

“[I]f he wants to chew on my ankles, I can take it.”

How’s that for a visual?

Norquist: GOP lawmaker’s criticism ‘beneath him’ [OTM/The Hill]

Grover Norquist Gives Congressman Frank Wolf the Heebie Jeebies

“My conscience has compelled me to come to the floor today to voice concerns I have with the influence Grover Norquist, the president of Americans for Tax Reform, has on the political process in Washington,” Wolf read from a statement on the floor of the House of Representatives today. Wolf listed a series of associations that he said undermines Norquist’s credibility as a policy advocate. Among them, he cited a relationship Norquist had with former lobbyist and convicted felon Jack Abramoff. “Mister Abramoff essentially laundered money through ATR and Mister Norquist knew it,” Wolf said. [Bloomberg]

Let This Be a Lesson to All Billionaires That Give the Thumbs-up to a ‘Rule’ with Their Name Attached to It

The GOP is making a concerted effort to pressure billionaire investment guru Warren Buffett to release his tax returns to the public. Republicans say Buffett — the public face of Obama’s proposed “Buffett rule” to increase taxes on the wealthy — needs to reveal his finances if his views on tax rates are going to serve as the basis for Obama administration policy. “Will Warren Buffett release his tax returns so we can see why he should be the standard for tax policy?” Sen. John Cornyn (R-Texas) questioned in a tweet Thursday. “If he’s going to be the gold standard, so to speak, in terms of what our tax policy should be, yeah, let’s look at it [his tax returns],” Cornyn told ABC News. [OTM/The Hill]

Is President Obama Insane When It Comes to Tax Policy?

Yesterday we learned how President Obama would pay for his jobs bill. If you make more $200k ($250k for marrieds), have carried interest income, have a corporate jet or are an oil & gas company, you probably won’t be too happy with the ideas put forth.

If any of these proposals sounds familiar, that’s because they’ve been put through the ringer already and they weren’t received warmly. It’s unlikely that this time around will be any different.

Considering all that, Christopher Bergin at Tax.com is perplexed:

What I can’t figure out is why the Obama administration keeps trying the same thing over and over again expecting different results.

Joe Kristan only goes so far to call these recycled ideas “lame” but if you hold Rita Mae Brown in high regard, then the President definitely has a screw loose.

President Obama’s Tax Plan: ‘No Games, No Politics, No Delays’ — No Chance [Christopher Bergin]

Wilbur Ross Would Like to Torpedo the Income Tax and Replace It with a VAT

Why? Because we need the tax policy equivalent of Law & Order: SVU.

“We need something that is very far-reaching, very dramatic,” said Ross, the head of W.L. Ross & Co. “An idea I’ve been in favor of is to scrap all of the corporate income taxes, all of the individual income taxes, and substitute a value-added tax on all goods imported into the country and manufactured and consumed here, and then rebate it on exports.”

Oh and that jobs bill? It’s bupkis:

“The amount being put in relative to that plan, compared to the jobs they say it will produce, is way out of whack,” Ross said.

Implement VAT, Cut All Income Taxes to Create Jobs: Ross [CNBC]

Study: Progressive Taxation More Likely to Put a Smile on Your Face

[R]esearchers analyzed the relationship between tax progressivity and personal well-being in 54 nations surveyed by the Gallup Organization in 2007—a total of 59,634 respondents. Well-being was expressed in people’s assessments of their overall life quality, from “worst” to “best possible life,” on a scale of 1 to 10; and in whether they enjoyed positive daily experiences (such as smiling, being treated with respect, and eating good food) or suffered negative ones, including sadness, worry, and shame. Finally, the analysis looked at the participants’ satisfaction with their nation’s public goods, from schools to clean air. […] On average, residents of the nations with the most progressive taxation evaluated their own lives as closer to “the best possible.” They also reported having more satisfying experiences and fewer discomfiting ones than respondents living in nations with less progressive taxes. [via TaxProf]

GOP Congressman: All Tax Cuts Are Good But Some Are Gooder Than Others

The Associated Press is reporting that some Republican Members of Congress are fighting their natural inclination to extend all tax cuts to infinity. The tax cut at risk of expiration is employees’ share of the social security tax of 6.2%. Last year the rate was cut to 4.2% for one year. President Obama would like to extend this cut, while some aren’t so keen on it.

But wait a minute! Doesn’t this go against every fiber of Republican orthodoxy? Won’t Ronald Reagan be spinning in is his grave? Did Grover Norquist’s marching orders get lost in the mail?

Republicans say no, as this position is “consistent with their goal of long-term tax policies that will spur employment and lend greater certainty to the economy.”

Okie dokie, then. But if that’s the case, it’s a little strange to discover that House Speaker John Boehner hasn’t made up his mind on whether to extend this tax cut (or put another way “raise taxes”). Perhaps, that’s because he’s already said that tax hikes are off the table. So what gives?

Fortunately, we have Texas Representative Jeb Hensarling to explain it to us:

“It’s always a net positive to let taxpayers keep more of what they earn,” says Rep. Jeb Hensarling, “but not all tax relief is created equal for the purposes of helping to get the economy moving again.”

So wait…not all tax cuts are effective at “getting the economy moving”? Is that what he’s saying? Or is this simply an Animal Farm approach to tax policy? Grover needs to get involved ASAP so everyone can get on the same page. The troops seem confused.

GOP may OK tax increase that Obama hopes to block [AP via BI]

Letting the Bush Tax Cuts Expire May Not Be a Violation of the Taxpayer Protection Pledge But Grover Norquist Would Still Advise You Against That Course of Action

As you well know, signing Grover Norquist’s Taxpayer Protection Pledge is the equivalent to having your name written in the Fiscal-Conservative-Starve-the-Beast Book of Life. If you break tservative credentials will go up in a poof of red, white and blue smoke, you’ll be bludgeoned to death with a rolled up copy of the U.S. Constitution and hopefully Ronald Reagan will have mercy on your soul.

Lately though, partly due to this little debt ceiling debate, the Pledge has come under increased scrutiny and after the Senate approved a repeal of ethanol tax credits without a corresponding reduction in tax rates, some suggested that it is meaningless. Since this is obviously nonsense, Grover has gone on a PR offensive, in order to spell it for the RUBES out there so they can understand what constitutes a violation and what does not. Everything seemed to be back on the up and up until today, the Washington Post ran an editorial that may further muddy the waters:

Would allowing the Bush tax cuts to expire as scheduled in 2012 violate this vow? We posed this question to Grover Norquist, its author and enforcer, and his answer was both surprising and encouraging: No.

In other words, according to Mr. Norquist’s interpretation of the Americans for Tax Reform pledge, lawmakers have the technical leeway to bring in as much as $4 trillion in new tax revenue — the cost of extending President George W. Bush’s tax cuts for another decade — without being accused of breaking their promise. “Not continuing a tax cut is not technically a tax increase,” Mr. Norquist told us. So it doesn’t violate the pledge? “We wouldn’t hold it that way,” he said.

Naturally, some DOPES out there got all worked up as The Hill reports, “Democrats had jumped on that quote, suggesting it was a sign that Norquist was willing to be more reasonable on taxes than many congressional Republicans.”

As you can see, the words “Norquist,” “reasonable,” and “taxes” are in extremely close proximity which indicates that these “Democrats” are what I’d like to call “COMPLETE IDIOTS.” Problem is, whomever grabs the loudest megaphone first in DC usually gets dibs on what the dish is so Americans for Tax Reform has AGAIN clarified how this Pledge thing works:

ATR opposes all tax increases on the American people. Any failure to extend or make permanent the tax cuts of 2001 and 2003, in whole or in part, would clearly increase taxes on the American people. In addition, the failure to extend the AMT patch would increase taxes. The outlines of the plans are deliberately hazy, but it appears that both Obama’s Simpson-Bowles commission proposal and the Gang-of-Six proposal dramatically increase taxes on the American people.

It is a violation of the Taxpayer Protection Pledge to trade temporary tax reductions for permanent tax hikes.

In other words, if you let the “Bush Tax Cuts” expire that’s fine but you just be sure replace them with “Obama Tax Cuts” to ensure there’s no trouble.

Out from under the anti-tax pledge [WaPo]
Grover Norquist tries to clarify Bush tax cut remarks [The Hill]
ATR Statement on Washington Post Editorial [ATR]