Cain's Sales Tax Test
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by Paul A. Gigot, OCTOBER 17, 2011, WSJ
The two big questions now in the GOP presidential primary are whether anyone can emerge as the main challenger to Mitt Romney, and who that might be. First Tim Pawlenty faltered in that attempt, then Michele Bachmann and Rick Perry rose and fell, and now Herman Cain gets his moment to shine or become a fleeting memory.
In particular, we're going to find out if Mr. Cain's 9-9-9 tax reform plan can hold up under a sustained assault from the media and his competitors. Throwing out the tax code has enormous political appeal, but his plan's vulnerability is its new 9% national sales tax even as it retains the individual income tax. David Gregory gave Mr. Cain a grilling on NBC's "Meet the Press" on Sunday, and Mr. Cain's response was uneven. He did well to explain that the cost of goods would fall as the income and corporate tax rates fell, offsetting some or all of the sales tax increase. But he lacked an adequate reply to the dangers of a combined state and national sales tax that could reach upwards of 18% in some places, as well as the danger of giving the federal government a new revenue stream with a sales tax in addition to the income tax. READ...
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