Free Capitalist Network - Community Archive
Mises Community Archive
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.

Herman Cain's 9-9-9 plan, has an Austrian economist adressed it yet?

rated by 0 users
Not Answered This post has 0 verified answers | 53 Replies | 6 Followers

Not Ranked
65 Posts
Points 1,390
danbeaulieu posted on Fri, Oct 14 2011 9:40 AM

I've read many articles on herman cains 9-9-9 plan, I understand that it wont work and that if Cain somehow DID get elected he'd never enact it or it would fail miserably during "phase 1" and go into economic rapture.

That said, has anyone from Mises deconstructed the plan yet?

All Replies

Top 25 Contributor
Male
4,249 Posts
Points 70,775

Peter Schiff on 999 right here at about the 38 minute mark

My humble blog

It's easy to refute an argument if you first misrepresent it. William Keizer

  • | Post Points: 35
Top 10 Contributor
6,953 Posts
Points 118,135
Top 10 Contributor
Male
4,987 Posts
Points 89,745

So Wal-Mart hires 10 more people or builds a new addition with all of their savings through tax avoidance, that should effectively help them to drive the local mom and pop store out of business. Now that the mom and pop store that reinvests their money in the community is out of the way Wal-Mart, now doing more business is free to send our money overseas where their production is.

Well, doing the calculations, you have 10 jobs gained and maybe 4 lost. I see a positive (if you count prosperity like this).

But regardless, your argument is almost entirely emotional here by calling up the "mom and pop" stores. Hey, why not prevent Walmart from operating around mom and pop at all? We know from history that Walmart tends to drive out competitors (being more efficient), so let's protect mom and pop ahead of time and stop Walmart from building close to places where we have emotional attachments.

doing more business is free to send our money overseas where their production is.

Your money? I thought that once you gave somoene your money in a trade it's not yours any more...

Furthermore, you commit the classical mercantilist and protectionist mistake of thinking that imports are bad since we give away our money. Thinking like this assumes that money is the end-all of economics. No, money is a means to an end. If you buy a good form China, you say that you prefer owning that good over the $4 you spent on it. Money only exists for you to be able to get a tangible good. Truly, with what sort of insane lunacy is China trying to get its hands on little green pieces of money? They're giving us all of their natural resources!

doing more business is free to send our money overseas where their production is.

Notice you have conflicts of morality here. You're saying that someone who lives in your neighborhood is more entitled to seeing your money than a child working in a sweatshop in Asia is. You fail to see that it is exactly through trade that we can lift world poverty from the shoulders of humanity. If you don't trade with Africa, you are preventing them from employing their comparative advantages. Capitalism is the great liberator.

doing more business is free to send our money overseas where their production is.

Also consider this interesting bit:

Not to mention that the exploitation of such a loophole as opposed to paying your tax should be considered immoral

I used to think that loopholes are bad because they create a government-sanctioned morality and distort market forces. Then I spoke with JJ, and was still convinced that I was right. But over time, I realized that the scenario boils down to this:

Government mandates every year it must punch you in the kidney 30 times. You find a way to not get punched in the kidney. Is this immoral? Is preventing harm to come to you really evil? Do we truly accept that this government violence is good, legal, and indeed the only moral thing? Can we truly be so selfish as to not want to be punched in the kidney, harming our vital functions?

  • | Post Points: 35
Top 25 Contributor
Male
4,249 Posts
Points 70,775

oops, at the 55 minute mark

My humble blog

It's easy to refute an argument if you first misrepresent it. William Keizer

  • | Post Points: 35
Top 10 Contributor
6,953 Posts
Points 118,135

Direct link to 55 mins.

 

Smiling Dave:
That is not going to happen, as Cain admits. http://www.economicpolicyjournal.com/2011/10/bachman-destroys-cains-9-9-9-tax-plan.html

Disclosure: didn't watch the debate, am relying on Bob wenzel's reporting.

Wenzel baffles the crap out of me a lot more than I feel comfortable with.  I really have to believe he's getting senile.

a) As I said, this straw man of "you want to create another pipeline for greedy government fingers" was old before it started.  And it certainly doesn't warrant a "Bachmann destroys  Cain's Tax Plan" headline.

b) "his plan will be revenue neutral, which means [...] taxes won't drop by even one penny."   

 

This guy's supposed to be an economist?

 

  • | Post Points: 5
Top 10 Contributor
6,953 Posts
Points 118,135

Wheylous:

I used to think that loopholes are bad because they create a government-sanctioned morality and distort market forces. Then I spoke with JJ, and was still convinced that I was right. But over time, I realized that the scenario boils down to this:

Government mandates every year it must punch you in the kidney 30 times. You find a way to not get punched in the kidney. Is this immoral? Is preventing harm to come to you really evil? Do we truly accept that this government violence is good, legal, and indeed the only moral thing? Can we truly be so selfish as to not want to be punched in the kidney, harming our vital functions?

...might have come around a lot sooner, but you disappeared from the threadwink

 

  • | Post Points: 35
Not Ranked
65 Posts
Points 1,390

thanks!

  • | Post Points: 5
Top 75 Contributor
1,288 Posts
Points 22,350

JJ: Taxing capital gains lower than income etc. can create incentives towards speculation and away from productive investment.

Please read this: http://www.onlineopinion.com.au/view.asp?article=11849

The Voluntaryist Reader: http://voluntaryistreader.wordpress.com/ Libertarian forums that actually work: http://voluntaryism.freeforums.org/index.php
  • | Post Points: 20
Not Ranked
65 Posts
Points 1,390

Hmmm... So then why does Ron Paul argue that our businesses are being driven overseas at all if its a good thing?

 

I obviously have some reading to do.

  • | Post Points: 5
Top 10 Contributor
Male
4,987 Posts
Points 89,745

...might have come around a lot sooner, but you disappeared from the thread.  wink

What are you talking about? That post of yours made me think :) You did put it well: "Great.  So it's ethical to take even more money from people against their will.  Got it."

  • | Post Points: 20
Top 10 Contributor
6,953 Posts
Points 118,135

Glad to hear it.  Just sayin maybe if the conversation continued, clarity would have come sooner.  But I also understand the need to digest things some times.  And you have continued to participate a lot, so I suppose growth has come from other conversation.

 

  • | Post Points: 5
Top 10 Contributor
6,953 Posts
Points 118,135

Aristippus:

JJ: Taxing capital gains lower than income etc. can create incentives towards speculation and away from productive investment.

Please read this: http://www.onlineopinion.com.au/view.asp?article=11849

*Sigh.*

First of all, no one is arguing that taxes (or coercion of any kind) don't distort the market.  Obviously they do.  This is why the smaller the government, the better...all the way down to no government.  Because all government is is coercion.  But if profits are made, it was a productive investment.  Period.  (Provided fraud or coercion wasn't involved, of course).  This notion that "speculation is bad" or that "borrowing is bad" is some of the most asinine nonsense I've ever heard.  You might as well say "cars, guns, and hammers are bad."  That's the first thing.  The next is how this guy uses the same "government owns 100% of your income" language almost all statists do.  He spends a whole paragraph spouting numbers about how tax-paying landlords incurred losses over 2007-08, and he closes it with this:

"their ability to offset those losses against their other taxable income would have cost over $4.8bn in revenue foregone; if (say) one fifth of them had been in the top tax bracket then the cost to revenue would have been over $5bn."

You catch that?  People not having to pay taxes on money they don't have "costs" the government.  Lovely worldview this guy has.  But it gets even better in the next sentence:

"This is a pretty big subsidy from people who are working and saving to people who are borrowing and speculating."

Got it?  The people who lost $8.6bn are getting a "subsidy" because they didn't have to pay taxes on that money they no longer have.  He continues on with this "not paying taxes on money you don't have = subsidy" nonsense for a while, and then gets to this part:

"The revenue foregone through negative gearing could alternatively be used to build nearly 20,000 new ‘affordable’ homes each year. Over a decade, that would make substantial (though still incomplete) inroads into the massive shortage of affordable housing that Australia now has."

Yes, because that's exactly what an economy needs more of.  Government housing projects.  This whole article is just Keynesian/socialist nonsense.  If you'd like further critique or clarification, please feel free to point out anything specific and I'll address it.  In the mean time, you can return the favor and read something actually worth reading and learn about the social function of stock speculators.  And while you're at it, you might try the social function of insurance, futures markets, credit default swaps, and banks as well.

 

  • | Post Points: 20
Top 75 Contributor
1,288 Posts
Points 22,350

Firstly I wasn't arguing against speculation in general at all, and I actually don't agree with everything in that article. I was pointing out an instance of government intervention that has contributed towards a bubble (granted, there are other factors too such as direct subsidies/easy credit schemes).

"If profits are made, it was a productive investment.  Period."

The point is that when the bubble pops and the malinvestments are revealed, there won't be many profits made.  Surely this sounds familiar to you.  The prices of houses have been declining this year for the first time in over a decade.

More on this: http://en.wikipedia.org/wiki/Australian_property_bubble

 

The Voluntaryist Reader: http://voluntaryistreader.wordpress.com/ Libertarian forums that actually work: http://voluntaryism.freeforums.org/index.php
  • | Post Points: 20
Not Ranked
65 Posts
Points 1,390

Peter schiff seems to like Herman Cains plan for the most part, well moreso than our current plan. The phases still concern me.

  • | Post Points: 5
Top 10 Contributor
6,953 Posts
Points 118,135

Aristippus:
Firstly I wasn't arguing against speculation in general at all, and I actually don't agree with everything in that article.

Well that's a relief.

 

I was pointing out an instance of government intervention that has contributed towards a bubble

Like we need one of those pointed out?

 

"If profits are made, it was a productive investment.  Period."

The point is that when the bubble pops and the malinvestments are revealed, there won't be many profits made.

Bro, you're the one who said "create incentives towards speculation and away from productive investment" as if having one meant not having the other.  My point is that doesn't have to be the case.

Ultimately it sounds like you're making an argument for having taxes for capital gains be just as high as taxes on income.  And I'm saying nothing you have presented has supported that argument.  If that's not an argument you're making, you'll need to clarify what your argument actually is, and what the point was behind that original post.

 

  • | Post Points: 20
Page 2 of 4 (54 items) < Previous 1 2 3 4 Next > | RSS