9-9-9, Herm Cain and David Gregory

I first wrote about what an impressive fellow Herman Cain was back in May (click here for the post) so it's nice to see him doing well the past month or so. Part of his appeal is that he seems like a pretty straightforward, no-nonsense kind of guy who is willing to say what's on his mind.

Today he had an interesting exchange with David Gregory, host of Meet the Press, as Cain tries to explain his tax reform plan, which he calls "9-9-9" (9% income tax, 9% corporate tax, 9% national sales tax). I think the approach has a lot of appeal, though I need to study it more.

David Gregory, however, feels no such obligation for further study. His handlers in the Democratic Party have told him it's bad, and so he devoted a great deal of time this morning trying to trip Cain up about the plan, by talking about its effect on state sales taxes. Cain tries over and over to explain that the plan has nothing to do with state taxes, but Gregory just isn't smart to enough to figure it out. The relevant transcript:

MR. GREGORY: The other defect in the plan comes from fellow conservatives who say, “You’ve got some problems here.” … “The real political defect,” the Journal writes, “of the Cain plan is that it imposes a new national sales tax while maintaining the income tax. … A 9 percent rate when combined with state and local levies would mean a tax on goods of 17 percent or more in many places. The cries for exemptions would be great.”

MR. CAIN: Don’t combine it with state taxes. This doesn’t address state taxes. If you add them together, yes, you’ll get that number. This is a replacement structure. These are replacement taxes. They’re not on top of anything.

MR. GREGORY: Mm-hmm.

MR. CAIN: We replace capital gains tax. We replace the payroll tax. We replace corporate income tax, replace personal income tax, and replace the death tax. It is a replacement tax structure.

MR. GREGORY: But where do state taxes go? You’re saying they’re going to be repealed?

MR. CAIN: If you–with the current structure, you have state taxes, right? So with this new structure, you’re still going to have taxes–state taxes. That is muddying the water.

MR. GREGORY: How so?

MR. CAIN: Because today, under the current tax code, state taxes are there if they have it. If they don’t have a state taxes, they don’t have it. It has nothing to do with this replacement structure for the federal tax code.

MR. GREGORY: But that doesn’t make any sense to me. If I’m already paying state taxes, and I have a new Cain administration national sales tax, I’ve got more state taxes.

MR. CAIN: No you don’t.

MR. GREGORY: How so?

MR. CAIN: David, David.

MR. GREGORY: You’re not saying they’re going away.

MR. CAIN: Your state taxes are the same. Your federal taxes, in most cases, are going to go down. That’s muddying the water.

MR. GREGORY: The Wall Street Journal says you have one on top of the other. There’s a combined levy.

MR. CAIN: That is not correct, David.

MR. GREGORY: Right.

MR. CAIN: Let’s try this one more time. State taxes are there today. The current tax code is a 10 million word mess. You have probably 100–you have thousands of loopholes and tricks and what I call “sneak attaxes” in the current code. State taxes today, whatever they are, zero or some number, has nothing to do with replacing the tax code. Nothing.

I once heard someone say to another person, in exasperation, "I can explain it to you, but I can't understand it for you." The fact that David Gregory, entrusted with hosting Meet The Press, can't grasp the distinction between federal and state taxes tells you a lot about the pool of talent at NBC.