Conservative heroine Phyllis Schlafly opposed the territorial tax system the Republicans are about to shove down our throats

Here in November 2011:

Although the Perry plan's most striking feature is its anti-marriage bias, his proposal for corporate income is equally pernicious. Perry would shift businesses to a "territorial" tax system, which means that corporations would be taxed only on the profits they earn inside the United States.

We should do exactly the opposite. We should reduce or eliminate taxes on businesses that employ Americans producing goods and services inside our own country, while increasing taxes on the profits that corporations earn by outsourcing or manufacturing overseas.

Above all, we should eliminate the foreign tax credit, a self-destructive provision that allows corporations to pay China, Venezuela or Saudi Arabia the money they would otherwise owe the U.S. government. Let's also cut out the deductions that U.S. corporations take for hiring foreigners to do work that Americans can do.

Those who support a territorial business tax argue that it will encourage multinational corporations to bring home the profits they earn overseas, but that's unlikely so long as it remains more profitable for them to invest in cheap-labor countries. Of Republican presidential candidates, only Herman Cain and Rick Santorum understand that what corporations need is lower taxes on their operations inside the United States rather than on the profits they earn in other countries.

Herman Cain urges Cruz and Kasich to withdraw for the good of the country

Quoted here:

“If I were Ted Cruz and Gov. Kasich I would step back and say, 'OK, let’s do what’s best for the party which would be best for the country now.' That’s putting patriotism above the delusional idea that there’s a path to victory for them ... There is no path to victory,” Cain said.

Cain said the same thing on an appearance on Sean Hannity's radio show this afternoon.

Nolan Finley Of The Detroit News Wants To Junk The IRS, And The Income Tax

THIS IS NOT NOLAN FINLEY

Here:

"[R]eplace the income tax with a national sales tax. You’d pay tax on the money you spend instead of the money you earn. That would eliminate the need for an IRS that audits tax returns, hands out non-profit status and enforces a tax code that is egregiously complex and unfair. If the national sales tax isn’t the answer, then a similar outcome might be achieved by drastically lowering current income tax rates in exchange for eliminating all deductions and credits. With no reason to examine returns, the IRS could be much smaller. Without auditing power, it’d be less intimidating."

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Why not do both? A low flat sales tax and a low flat income tax? We already have one flat tax, called Social Security. And we already pay an average state sales tax of 5+% everywhere. Just abolish the income tax and augment the current flat Payroll Tax with the new one. Business everywhere is already set up to collect that and withhold, so dovetailing that with a corporate flat tax should also be easy to do. Presto. No IRS needed for America's 151 million wage earners and the millions of businesses who employ them.

Herman Cain's more or less revenue neutral 999 plan looks better and better with every passing day of the IRS scandal targeting Obama's political enemies: a flat 9% federal sales tax, a flat 9% tax on all income, and a flat 9% corporate income tax.

A man before his time.

Herman Cain Endorses Newt Gingrich Saturday, January 28th, 2012

As reported by Politico, here:

"I hereby officially and enthusiastically endorse Newt Gingrich for president of the United States," Cain told the cheering crowd here. "Speaker Gingrich is a patriot. Speaker Gingrich is not afraid of bold ideas. And I also know that Speaker Gingrich is running for president and going through this sausage-grinder-- I know what this sausage-grinder is all about. I know he is going through this sausage-grinder because he cares about the future of the United States of America."

In Order For Third Parties To Rise, They Have To Have Representation

Third party candidacies for president fail in this country, as do those for representative or senator, because the two parties have a lock on the political process. The lock concentrates power and money in their hands, to the exclusion of the other interests which no longer have representation.

How did the two parties lock it?

Or to put it another way, how did Americans lose representation to the Republicans and Democrats?

The Republicans deliberately ignored the constitution's re-apportionment requirements after the 1920 Census, some say out of fear of competition from representatives of the massive number of then-new immigrants, and eventually prevailed in fixing representation at the arbitrary number of 435 in the US House through legislative fiat. There's absolutely nothing sacred about the number 435. It's just a number we reached when population required that number of congressmen after the 1910 Census.

Normally, the constitution's requirements have to be overcome by amendment, not legislation. But that's what we have, legislative fiat, because both parties found it in their best interests to concentrate power in themselves. The last thing they wanted to do was diffuse power to additional new players as the constitution requires. Since the constitution doesn't specify the upper limit of representation, only the minimum number and minimum proportion (Article 1, Section 1), a problem of first importance in the founding era but never resolved, they got away with it. But they shouldn't have. We're all the poorer for it.

Republicans in particular wear its stain. Today its Tea Party claims to wear the badge of constitutional originalism, but that badge is covering a huge blot of hypocrisy.

If Americans actually had the government the constitution requires but the Republicans of the '20s prevented, we'd have a US House today with 10,000 representatives, not 435.

There would most likely be a number of odd duck political parties represented in that sea of representation, like Greens, Communists, Fascists, Socialists and Constitutionalists. And probably a Gay Party from Saugaytuck, Michigan. But there might also be a rather substantial number of Conservatives and Independents. Considering that "conservative" is today's most identifiable political self-description, you can bet Republican golfers everywhere certainly don't want the competition.

But consider, for example, New York State. It has a Conservative Party, whose most famous public face is perhaps the radio host Sean Hannity. Another famous conservative from New York was the brother of William F. Buckley, Jr. US Senator Bernie Sanders of Vermont is a Socialist, from a state with next to no gun laws! Why not have more of their ilk as the people desire in the US House? Lots more.

Once there, the give and take of politics on a grander scale would most probably change the dynamics of the current politics of not-a-dime's-worth-of-difference between Republicans and Democrats. New actors would arise and give voice to ideas which in the past have had to settle for one congressman's endorsement here, or one there, only to be squelched by the Republicrat party apparatchiks.

More importantly, Republicans and Democrats would have to make alliances and share power in exchange for support. This would increase representation of ideas which today see the light of day in legislation only infrequently. And more importantly still, candidates for national office would have to forge alliances with such representatives too, which means third party candidates for president would actually begin to have some credibility with legislative support, without which a tax reformer like a Herman Cain, Ron Paul or Steve Forbes goes nowhere.

Think about it America!

Stop settling for representation without representation!

"One Representative For Every Thirty Thousand!"

George Will, Free Trader, Labels Herman Cain Entrepreneurial Charlatan, Disrespectful

Yeah, after Cain has withdrawn from the race.

Coward.

Here.

Obama Must Be Crackin' a Cold One Tonight: Herman Cain Finished Off in Record Time

The very likeable black Republican with the easily understood tax proposal was neutralized in record time by making him very unlikeable with half of the electorate.

It isn't just that our politics have degenerated into playing the race card, but also the gender card.

Herman Cain didn't help himself when on top of inspiring no confidence on some of the issues he mismanaged the lynching. The thing is, no one expected it would be a female lynch mob, probably Herman most of all. Men are stupid that way. That Herman should have known the Obama m/o in Illinois only demonstrates another disqualification for the big leagues.

What was he thinking?

The LA Times has the story of the end of the Herman Cain for president campaign here.

Herman Cain's Plan For Your Money is 999, Obama's is Mine, Mine, Mine!

So says Kyle Wingfield here in The Atlanta Journal Constitution.

Sharon Bialek Lived In Same Building As David Axelrod And Knew Him

An important article connects all the dots showing that the Herman Cain smear campaign bears all the marks characteristic of Obama's favorite m/o against political opponents and just happens to be centered in Chicago:

Within 24 hours of Bialek's press conference, friends and acquaintances of hers stepped forward to say that she's a "gold-digger," that she was constantly in financial trouble -- having filed for personal bankruptcy twice -- and, of course, that she had lived in [David] Axelrod's apartment building at 505 North Lake Shore Drive, where, she admits, she knew the man The New York Times calls Obama's "hired muscle."

Don't miss one word of it here.

Kathleen Willey Says She Believes Herman Cain's Denials

Just now on WLS AM 890 with Don Wade and Roma.

See some of her controversial history, here.

Cain's Accuser Bialek Was Accused by Father of Her Son of Mental Problems

As reported here:

The father of Bialek’s now-13-year-old son sued in an ugly paternity fight to win sole custody of the child, accusing her of “significant mental and emotional problems,” court papers from 2000 show.

Bill Bennett Should Just Shut Up About Herman Cain

What does he want Herman Cain to do? Some kind of magic dance to make the accusations stop? 

"Four women are not an insignificant number. One or two anonymous charges, perhaps. Three anonymous charges (where, as I understand the story, Cain knows of at least two of the women) plus one woman who went very public and opened herself up to all manner of investigation are a lot. It is no longer insignificant. Neither is it insignificant that the Cain campaign discounted the charges in the initial stories, saying they were based on anonymous sources, only to make a mockery by blaming other campaigns with less substantiation than the original stories."

It's all here, but I look in vain for a defense of the rules of evidence, fair play and the like, all of which one would expect one's allies to marshall at a time like this in defense of one of their own.

But Bill Bennett is not a reliable ally.

Democrats on the one hand know Herman is the real threat to Obama, not Romney. Moderate Republicans, on the other, know Herman is the real threat to Romney.

Their joint mission is to destroy the source of Herman's success, which is his likeability. Relentless below the belt stuff will be tried until something sticks. Herman isn't even that important. It's the Tea Party he represents. Dispirit that and you automatically depress the turnout. Meanwhile Democrats can count on the individualist vein in Republicanism to cause Republicans to hang Herman out to dry as a matter of principle, the last refuge of the scoundrel.

"A man big enough to run for president should be big enough to have a full and candid press conference on all of this."

One important difference between Republicans and Democrats is that when a Democrat gets attacked, Democrats circle the wagons around their wounded, but when a Republican takes a hit, Republicans either run and hide like sissies, or join in the attack.

The electorate respects party unity, not because it's often right but because it's logical and predictable. Republicans aren't unified and haven't been since Reagan, which is why no one trusts them. They're insane, and occasionally fly off the handle and hurt somebody in the process.

And right now it's Herman Cain Republicans want to hurt.

I Got Your Sexual Harassment Right Here, Pal

According to The Chicago Sun Times, here, Herman Cain's latest accuser was awfully chummy with the so-called scoundrel only a month ago:

"[Cain and Bialek had an] encounter a month ago while backstage at the AM 560 WIND sponsored TeaCon meeting in Schaumburg Sept. 30-Oct. 1 at the Renaissance Hotel and Convention Center."

The very attractive one time reporter for NBC's WMAQ in Chicago, Amy Jacobson, is the source for the story. She is now on AM Radio Station WIND in Chicago.

Peter Morici Says Herman Cain's 999 Plan 'Makes Great Economic Sense'

Here, but doesn't explain why in the same breath he criticizes Cain for being short on explanations (!):

Mr. Cain’s 9-9-9 tax proposal makes great economic sense but when pressed, he cannot explain why it does or how it would work. For example, when asked about how the nine percent sales tax would treat imports, he doesn’t know—this despite the fact that European countries have extensive experience with this issue, economist and lawyers have studied those issues ad nauseum, and the treaties the United States and EU have signed permit applying sales taxes to imports and refunding the same on exports to maintain neutrality in competition between foreign and domestic products.

I think Herman is being coy about treatment of imports because he intends to apply tariffs wherever necessary to level the playing field to make American exports more competitive.

Herman can't be entirely candid about that sort of thing at this stage because Republicans have been hooked on free trade since at least the 1960s. In the general campaign against Obama, however, Cain could conceivably make a bid for the Democrat union vote with such a tariff threat as part of an overall strategy to form a broader coalition not unlike Reagan put together in the 1980s.

The Broadest Tax Base Which Can Possibly Be Imagined Implies a Tax Rate of 6.2%

Herman Cain's 999 Plan is focusing attention on the perennially perplexing problem of taxation for the American electorate in 2012. His plan has brought questions about broadening the tax base for tax reform front and center, including: What tax base is large enough to generate adequate federal revenues? and: What rate of taxation is fair?

Herman's big idea is to scrap the entire tax code and start over with three new bases taxed at the same low rate for a temporary period of time, eventually transitioning the country permanently to just one of these bases, taxed at a much higher single rate.

His scheme is quite conventional in that it looks to the existing traditional bases of taxation with which we have been familiar for decades: corporations and individuals.

What is new, however, is the national sales tax, the base for which was fairly sizable in 2008 at $10.1 trillion in personal consumption expenditures [PCE], and running at almost $10.8 trillion annualized through August 2011.

Currently the overwhelming burden of taxation falls on the individual filer whose personal income is taxed in order to provide Social Insurance and Federal revenues, which in 2011 are currently running at an annualized rate of $2.3 trillion, as shown here by the Bureau of Economic Analysis. Corporations, excises and tariffs provide puny sums by comparison: less than $500 billion in 2008.

This means that in 2011, Herman Cain's ultimate idea of taxing consumption to replace current revenues of approximately $3 trillion would imply a national sales tax rate of 28 percent on $10.8 trillion in goods and services expenditures this year. That's a pretty hefty rate by comparison with present conditions.

Currently the personal income base on which we exact that $2.3 trillion in Social Insurance and Federal taxes is just over $13 trillion. This implies an overall tax rate of 18 percent. If personal income in that aggregate amount had to do all the pulling to generate the full $3 trillion in revenues, personal income would have to be taxed at a rate of 23 percent to do the same thing as the consumption tax. Not as high, but still much higher than the 9 percent Herman Cain has called for currently, if only temporarily, in deference to the God of the Bible who asked for just 10 percent from his chosen people.

By way of comparison, if there were some way to easily tax GDP, currently running at $15 trillion, the effective tax rate would have to be 20 percent.

So is there a tax base which is broader still, from which we can derive the necessary sums and get that rate even lower?

Given that people by definition receive income in consequence of the conduct of business of one kind or another (aside from gambling, prostitution and bank robbery), it seems reasonable to look at the size of the various tax bases available strictly from businesses, without whom none of the other tax bases would exist in the first place. If we really mean it when we say we want to tax income only once, we need to go to its source, and for nearly everyone in our society, that source is business.

Corporations in 2008 had total receipts of $28.5 trillion, 2.8 times the size of Herman Cain's PCE tax base. It would have taken a gross receipts tax of merely 10.5 percent on this sum to have generated $3 trillion in tax revenue in tax year 2008, a year when revenues were actually lower at $2.5 trillion. That implies a gross receipts tax of only 8.8 percent on corporations in 2008.

In such a world, there would be no more income taxes on individuals, no Social Security or Medicare taxes either, and no capital gains taxes nor taxes on investment income or savings of any kind, and government would not go wanting. Nor would business be constrained by other taxes and fees imposed on it if we were to throw out the current code and replace it with this simple levy.

But the base could be made broader still in order to lower the effective rate even more.

Add in partnerships, which had $5.9 trillion in total receipts in 2008. And S corporations, which had $6.1 trillion in total receipts in 2008. Both of these added to corporation total receipts yields a gargantuan tax base for 2008 of $40.5 trillion in gross receipts.

All of that could have been taxed at a mere 6.2 percent to meet the federal revenue of $2.5 trillion collected in 2008.

No more talk of a flat income tax, nor of a progressive income tax, nor of a consumption tax. No more compliance costs of $450 billion because of the current code. No more lost time equivalent to 3 million full time jobs.  Just one, low, simple, rate on business. That's it.

In addition to God, John Tamny might go for it, too:

"The answer as always is for the government to simply get out of the way. If it must tax corporations, its taxation should be blind in the way that justice is. A flat gross receipts tax would make all corporations equal before the IRS. That would ensure the most economic allocation of capital on the way to rational, market-driven growth."

Herman Cain's Consumption Tax Is Firmly Rooted In The Framers' Original Intent

Lawrence Hunter for Forbes provides an excellent primer on the Framers' argument for indirect taxation, which is to say taxation on consumption, showing how such taxation was chosen by them on purpose because it is by nature self-limiting, which is a necessary predicate to limited national government:

Hamilton’s exposition in Federalist #22 illustrates the sophistication of the theory of political economy that informed the original constitutional design, which gave rise to a constitutional pincer holding the national government firmly in check.  History has borne out the Framers’ expectations that taxes on consumption are to a large degree self-limiting, while direct taxes know far fewer limits.  In the case of the original Federal design, the self-limiting tendency of indirect taxes on consumption augmented the other arm of the constitutional pincer—limiting the national government solely to the exercise of delegated powers—to make unnecessary other specific constitutional limitations on the national government’s taxing and spending authority, i.e., explicit taxing, spending and borrowing limitations.

The whole thing, here, is must reading.

Phyliss Schlafly Likes Herman Cain's Corporate Tax Reforms

As reported here:

We should reduce or eliminate taxes on businesses that employ Americans producing goods and services inside our own country, while increasing taxes on the profits that corporations earn by outsourcing or manufacturing overseas.

Above all, we should eliminate the foreign tax credit, a self-destructive provision that allows corporations to pay China, Venezuela or Saudi Arabia the money they would otherwise owe the U.S. government. Let's also cut out the deductions that U.S. corporations take for hiring foreigners to do work that Americans can do. ... 

Of Republican presidential candidates, only Herman Cain and Rick Santorum understand that what corporations need is lower taxes on their operations inside the United States rather than on the profits they earn in other countries.

The Collection is Eluded: Consumption Taxes Allow YOU to Control How Much Government Gets

And that's why the FAIR TAX has gone nowhere so far. Neither Democrats nor Republicans want YOU to kill the golden goose.

But now we have the very likeable Herman Cain, who advocates the consumption tax, the tax the Founders advocated. Even Alexander Hamilton, to whom we owe our strong central government, advocated for it in Federalist 21:

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

Two important commentators at Forbes are coalescing around the perfections associated with a consumption tax, Lawrence Hunter and John Tamny, but Hunter is clearly the constitutional originalist in this matter.

John Tamny, who has argued for a gross receipts tax on corporate business if there must be a corporate tax, however, has caught the spirit here:

As Larry Hunter, another fellow Forbes contributor has noted recently, the beauty of a consumption tax is its limiting nature. Quite unlike taxes on income that are paid no matter what, with a consumption tax individuals would be able to limit the amount of money handed to the government by virtue of spending less.

This is particularly important during times of economic hardship. While with income taxes we pay regardless, if a consumption tax were implemented Americans could put the federal government on a diet at the same time that economic uncertainty is forcing them to tighten their own belts.

At present, and as evidenced by the boomtown that Washington, D.C. currently is, the government industrial complex is gorging at the same time that most Americans are reducing expenditure. This is wrong on so many levels, and as it’s true that during downturns individuals tend to spend less (their savings once again an economic stimulant), so should Washington be forced to. 

Herman Cain's National Sales Tax Might Make Renters Better Off, With Transitional Problems For Existing Owners of Residences and Rental Income Properties

An important study published in 2008 here simulating the effects of the Fair Tax, Herman Cain's ultimate goal, namely a consumption tax to replace all other federal taxation, concluded the following about its impact on housing:

The enactment of H.R. 25 thus causes the homeownership rate to gradually decline as the demand for housing falls. Demand for owner-occupied housing decreases because of the elimination of the tax on normal returns to capital in the nonresidential and rental housing sectors (which reduces the relative tax advantage of owner-occupied housing) and the elimination of the tax deductions for mortgage interest and property taxes. Note that under H.R. 25 all consumption goods are treated roughly the same since most nonresidential consumption is taxed, rental housing payments are taxed, and the tax on new investment in the owner-occupied sector is roughly equivalent to a front-loaded or prepaid tax on the flow of housing services from such investment; only housing services from existing, owner-occupied housing are untaxed. As a result, there is no preferential tax treatment of new investment in owner-occupied housing under H.R. 25. Because of this, a portion of the investment in owner-occupied housing that would have occurred under the income tax is shifted to the nonresidential and rental housing sectors. Rental capital as a share of the total capital stock increases from 13.4 percent to 13.7 percent in the long run and the output of rental housing as a share of total housing output increases from 24.9 to 26.2 percent. This decreases the real price of rental housing services as the stock of rental housing increases, which makes renters better off. ...

Our results indicate that such a reform would generate significant overall macroeconomic improvement in both the short and long runs, reflecting the labor supply and savings responses to lower overall tax rates on labor income and the elimination of the taxation of normal returns to capital income (a marginal effective tax rate of zero on the income earned by new investment). In particular, the model simulation results indicate that GDP would increase by 3.8 percent in the long run, reflecting a 2.9 percent [increase] in labor supply and a 5.3 [percent] increase in overall investment. However, the implementation of such a reform would raise some significant transitional issues, especially in the housing sector. These can be grouped into effects on the owner-occupied housing sector and the rental housing sector. ...

[T]he simulations suggest that the prices of existing homes would fall by 10.1 percent in the year of enactment of H.R. 25, although this effect would dissipate rather quickly, with declines of only 2.6 percent two years after reform, 1.2 percent five years after enactment, and no effect in the long run. ...

[T]he real value of existing rental housing would decline by 25.7 percent in the year of enactment of reform, and this decline would remain roughly constant, with a long run decline of 25.8 percent. These declines arise because investments in rental housing were made on the assumption of continued depreciation deductions under the income tax, but these deductions disappear under the sales tax while rents are fully taxed under the new regime.

Herman Cain on Trade: Imports Are Subject To OUR Domestic Taxation

I remain puzzled by this: still as of this moment maybe only one guy has really sounded the alarms about Herman Cain on free trade to its devotees, namely Jerry Bowyer at Forbes.

Larry Kudlow talks up Herman Cain like crazy every Saturday on his radio show, and I've been listening for weeks while all the other candidates come out and talk with him about flat tax proposals of their own, and still none of Kudlow's free-trade peeps seem to have picked up on it, nor has Kudlow for that matter.

While they do not take Herman seriously enough to read even Herman's own description of his 999 Plan, however, the money has started to pour in, $5 million in October alone, most of it on-line, according to Robert Costa at National Review here.

And I don't think any of Herman's Republican challengers has brought it up either. They'll criticise one or another feature of the 999 Plan as too complicated, unrealistic, unpopular or unworkable, but I still do not hear any of them criticise Herman as a protectionist.

But Herman makes no secret of his playing-field-leveling plans.

As shown here:

Exports leave our shores without the Business Tax [9 percent] or the Sales Tax [9 percent] embedded in their cost, making them world class [!] competitive. Imports are subject to the same taxation as domestically produced goods, leveling the playing field.


In other words, imports will get slapped with a 9 percent business tax and with the 9 percent sales tax just as domestic goods are in order to protect our market from unfairly subsidized products designed to undercut our prices, capture market share and drive US competitors out of action on our own soil.

Shhhhhhh!

Herman Cain is running a stealth fair trade campaign under cover of a Fair Tax program, designed in part obviously to appeal to Democrat voters in union shops.

It tells you a lot about the guy, especially since he's the only Republican running who is serious about overturning the income tax itself. All the rest of them accept the assault on the constitution it represents.

Herman is a wily devil.

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