By Bill Minor
JACKSON – As an old political writer who has seen just about every possible wacky idea stirred into the political stewpot, I should perhaps know better than spend words on Herman Cain’s “9-9-9″ economic plan.
But when one of the ex-Godfather Pizza mogul’s presidential platforms is to enact a 9 percent national sales tax, it set off an alarm bell with me. If installed, it would virtually disembowel Mississippi’s 7 percent sales tax, the bread-and-butter revenue producer of our state tax code.
Imagine paying 16 cents in sales taxes to buy a quart of milk or a loaf of bread, and just about everything else, on a frugal shopper’s grocery list.
None of the others in the Republican presidential circus had paid any attention to Cain or his campaign pitch in the Republican presidential circus until last week when he suddenly shot to the top of the GOP polls. Pundits call the Republican presidential contest the “flavor of the week” show because the leader changes each week. Cain, the African-American in the crowd, is the biggest surprise so far as Rick Perry, Michele Bachmann, etc. have faded.
Virtually every economist who has examined Cain’s 9-9-9 idea has concluded that it wouldn’t work the way Cain says it would to cut the deficit, create jobs and reduce most folks’ taxes. Their conclusion is the plan would increase the deficit while shoveling more wealth to the richest two percent, and radically shifting a higher tax burden to Americans on the bottom rung of the economic ladder.
Primarily, Cain’s idea would make consumers pay more taxes, a concept that would particularly hurt Mississippians because the state’s existing tax code puts 70 percent of the tax burden on consumers to feed the general fund and provide state match (with federal funds) for highway construction and repair.
Mississippi’s 7 percent gross sales tax law – with no exemption on groceries – is among the highest in the country, even while we have the lowest per capita income.
At the same time, Mississippi has one of the lowest individual and corporate income tax rates in the country. This tax imbalance has been shown in numbers of studies by progressive groups in the state – including several in the legislative arena – but even a whisper about equalizing the tax burden by increasing the top (5 percent) rate of the income tax, or eliminating some income tax exemptions, has been quickly shot down by lobbyists for business and industrial groups.
Earlier this year, at the request of Rep. Cecil Brown (D-Jackson) staffers of the Legislative PEER Committee examined how much state income tax had been paid by the largest for-profit companies in Mississippi from 2006 through 2009, using information from the Department of Revenue. PEER staffers found amazingly that some 80 percent of the top 130 companies had paid zero state corporate income tax.
Obviously, the big companies have been able to find enough legal loopholes in the state’s income tax structure to avoid paying state corporate income tax. And we were shocked several months ago to learn that General Electric, ExxonMobil and other corporate giants had paid no federal income tax! No wonder the “Occupy Wall Street” movement against corporate greed has spread.
This is not some flash-in-the-pan movement. As the nation slides deeper into the Great Recession, unemployment rigidly stays near 10 percent (and may go higher), and people realize that since the 1980s the rich have markedly gotten richer and the poor have gotten poorer, more Americans are angry that the financial industry continues to pay big bonuses and salaries while the rest of the country is hurting.
But back to Herman Cain, the 9-9-9 Godfather Pizza guy. What we don’t want is to wake up in November 2012 and, like in the movie, find a horse’s head in our bed.
Bill Minor has covered Mississippi politics since 1947. Contact him through Ed Inman at email@example.com.