Cain Proposes Cheaper 3-3-3 Plan for Empowerment Zones in Urban Areas

Will someone please explain to me why Herman Cain is considered a conservative and secondly why he is a Republican with his latest 3-3-3 plan for the inner city.  This urban renewal plan for empowerment zones comes right out of the liberal playbook.  Empowerment zones are where the scam of the Government 8(a) program has grown under Obama.  Who would want to work in most of those areas or be there after dark in most cities.  We are going to empower the home turf of the gangs and drug culture?  Money has been thrown at the urban areas of the cities for years.  Government builds new housing in these areas but in a short period the new places look like the old.  If you have gangs and drug running, you cannot create a safe environment until you rid the inner city of the thugs.

Education means nothing to most of these thugs so chances of success are slim to none.  You open a business and your chances of getting robbed could be very high.  Graffiti will be the first thing you see.  During the riots in Watts the thugs went after their own business people.

Anyone who doesn't think there isn't a gang and drug culture in the urban areas hasn't been to a major city or driven to LAX from the Inland Valleys of California.  How about in Cincinnati between the zoo and the stadiums on surface streets?  You drive by parks which frankly unnerved me enough to run a red light since no cars were around.  How about going to a high school football game in San Antonio on the east and south sides of the city?  Our buses had to be guarded to keep them from being destroyed.  The cops do a good job but there is only so much you can do until parents get involved with the schools and their children and say no more.

Can you imagine the amount of fraud by giving employers in those zones the opportunity to take employee salaries off their income tax?  How many phony employees will they have?  You can take it to the bank that it would be rife with fraud because we have seen it before.  It continues today in the 8(a) program of the Federal Contracting which has a program for empowerment zones in the inner cities.

Just who is answering in the polls they support Herman Cain?  One thing is becoming more evident is that he is becoming a more affirmative action candidate as the race continues especially with this 3-3-3 plan which is new for the inner city empowerment zones.  Cain has definitely benefited with affirmative action over the years.  The more the details on his background come out, the more you ask yourself why is he considered a conservative.

Cain is giving political contributions to his motivational company to buy his books, is an associate pastor at the ultra liberal Antioch Baptist Church in Atlanta with a minister who praises Malcolm X,  has an empowerment zone plan for his tax cut where they pay 3-3-3 versus the middle class paying 9-9-9,  and cannot give a straight answer on pro-life for starters makes you wonder just who is Herman Cain and how can he be considered a conservative?  His campaign manager admits that he doesn't know who his economic advisers are which begs to question what is going on inside his campaign.

Yet some people are still pushing Cain?  Beam me up Scotty!

9-9-9, Take 2: Cain's Tax Plan Revamp Still Stings the Middle Class
By Bruce Watson Posted 2:00PM 10/24/11 

Republican presidential candidate Herman Cain unveiled several major changes to his popular 9-9-9 tax plan on Friday. The former Godfather's Pizza CEO even announced that those below the poverty line wouldn't have to pay income taxes. Yet the country's middle class won't find much relief in Cain's fleshed-out 9-9-9 plan. 

Here's a detailed look: 

A Simple Plan

Cain's plan seems to be the height of simplicity: It would levy a 9% income tax, a 9% corporate income tax, and a 9% federal sales tax on all purchases. On the surface, the drop in income tax would help most taxpayers, but the sales tax would be very tough on middle class households. Given that middle class families spend most of their income on necessities, a 9% sales tax pretty much functions as an additional 9% income tax. According to the nonpartisan Tax Policy Center, a household making the median income of $49,445 currently pays an effective federal tax rate (income tax plus payroll tax minus deductions) of 14.3%. Cain's proposal would increase this rate by 3.7%.

It gets worse. According to Edward D. Kleinbard, a tax law professor at USC's Gould School of Law, at least part of the 9% corporate tax would also fall on the heads of workers. Cain's tax plan allows businesses to deduct money based on investments, exports, and purchases made from U.S.-located businesses. What it does not do, however, is allow companies to deduct the wages that they pay their employees. Forced to pay taxes on these wages, Kleinbard argues, corporations would face a major tax increase -- and would pass a large portion of that boost on to their workers.

The Tax Policy Center agrees, noting that a household making the median income of $49,445 would see its total federal tax percentage increase by 9.5 percentage points, to 23.8%.

Class Warfare
On Friday, Cain offered some concessions to the nation's poorest citizens, but did little to alleviate the burden his plan would place on middle tier earners.

Speaking in Detroit, Cain told a crowd of supporters that the nation's poorest citizens wouldn't pay the 9% income tax. While generous, however, this cut wouldn't erase the damage that his 9-9-9 plan would do to the poor. According to estimates, the full 9-9-9 plan would increase taxes on the poor by 15.8 percentage points. Although the removal of the 9% income tax for them would help, they would still pay more taxes than they currently do. 

What's worse, the poor would also lose tax-based benefits that they rely on. Some programs -- such as the earned income tax credit and the child tax credit -- aren't merely tax deductions: They are actually refunds. In other words, poor families receive these benefits even if they are larger than the total tax levy that they would pay. As Elaine Maag, a senior research associate at the Urban Institute notes, these programs translate into "money in their pockets." Maag points out, however, that "Under Cain's plan, that portion of the social safety net would disappear." 

What Kind of Empowerment?

One of the most mysterious aspects of Cain's plan has been his "Empowerment Zones" or "Opportunity Zones." In these areas -- which he didn't really define until Friday -- his plan allowed companies to take "deductions for the payroll of those employed in the zone." As for the workers themselves, his plan offered "additional deductions for those living and/or working in the zone." On Friday, he gave a hint at what those changes could be, noting that in the designated zones, 9-9-9 could become 3-3-3, with taxes slashed in each category. 

The fact that he made his speech in Detroit gave a clear idea of which areas he planned to target for empowerment: depressed urban zones. For households either living in these zones or willing to relocate to them, Cain's plan could be a major boon, offering sweeping tax cuts and a major stimulus to job-creating corporations. However, there was also a sharp bite of medicine to go with the spoonful of sugar: To be designated as an opportunity zone, Cain noted that "cities will have to step up and remove some of the barriers that are within their city limits, so that the cities do what they can do to help themselves." 

While Cain didn't give a complete list of all the "barriers" that would need to be changed, he outlined a few requirements. Opportunity zones would have to eliminate the minimum wage, enact school voucher programs, and designate themselves as "right to work" areas. Noting that zoning laws and building codes can add to business costs, he also announced that companies in these areas could apply for waivers that would enable them to bypass these rules.

In other words, Cain's plan wouldn't just cut taxes for companies that move into blighted urban areas. Through the empowerment zone program, it would also remove or scale back many twentieth-century laws that were designed to protect workers.

Just Like Starting Over

While Cain's tax plan has alarmed many economists and analysts, it has also highlighted a key problem with the tax code: It's simply too complex. Including all associated laws, the code totals more than 72,000 pages and contains a near-endless collection of cuts, breaks and deductions. However, Kleinbard notes, Cain's plan throws the baby out with the bathwater: "The solution is to directly address the twists and turns of the tax code. You don't abandon a hundred years of intellectual investment in the tax code in favor of a radically different, highly regressive plan. If we have the political will to enact Cain's plan, then we have a political will that is more than capable of addressing the complexities of the current tax code." 

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

Source:  9-9-9, Take 2: Cain's Tax Plan Revamp Still Stings the Middle Class - DailyFinance