By Russell Berman - 10/18/11 09:30 AM EDT
Herman Cain’s 9-9-9 tax plan might have swept him to the top of Republican presidential polls, but the conservatives who would be called on to pass his proposal in the House are not as enamored.
In interviews, several House GOP leaders on tax policy singled out Cain’s call for a new 9 percent sales tax as a chief obstacle, saying it would represent a fresh federal revenue stream that could easily be raised in future years.
Cain’s plan would replace the current tax system, derided by members of both parties as Byzantine in its complexity, with a 9 percent personal income tax, a 9 percent corporate income tax and a 9 percent national sales tax. Among the many levies eliminated in Cain’s proposal would be those on capital gains and dividends, payroll and estates.
Once seen as a fringe candidate for the GOP presidential nomination, Cain has surged past front-runner Mitt Romney into the lead in recent national polls, bringing a wave of scrutiny to his signature proposal.
As a political outsider who has never held elected office, Cain is pushing his plan without a base of congressional support. In contrast to campaign platforms that have been incubated in think tanks and congressional committees, Cain has suggested that he developed his 9-9-9 plan literally on the fly: The New York Times reported that it emerged from a strategy session aboard a campaign flight over the summer.
Democrats and many economists have criticized the 9-9-9 plan as a regressive system that would radically shift the tax burden from the wealthiest Americans to the poor, who would be hurt most by the new sales tax. Cain has argued that those concerns are overstated because used goods would be exempted and the reduction and elimination of other taxes would lower the cost of goods.
Conservative groups are split. The Club for Growth is supportive, while Grover Norquist, the influential president of Americans for Tax Reform, has panned the proposal. On the campaign trail, two Cain rivals for the nomination, Rep. Michele Bachmann (Minn.) and former Sen. Rick Santorum (Pa.), have gone after the sales-tax element of the plan.
But Cain’s biggest headache could be in the Republican-controlled House, where party leaders have already begun charting a different course on comprehensive tax reform. The GOP budget blueprint, authored by Budget Committee Chairman Paul Ryan (R-Wis.) and passed by the House in April, would simplify the tax code and lower the top marginal income rate and the corporate rate to 25 percent. It would not create a new sales tax.
House leaders have praised Cain for offering a specific plan to overhaul the tax code, but those who have commented on it have criticized its details.
“I am a huge admirer of the author of 9-9-9, although I’ve got a few reservations about having both an income tax and a sales tax,” said Rep. Jeb Hensarling (R-Texas), chairman of the House Republican Conference and the co-chairman of the supercommittee on deficit reduction. He noted that he has endorsed his home-state governor, Rick Perry.
“I’d feel a little bit more comfortable if we repealed the 16th commandment before we got there,” Hensarling added, referring to the constitutional amendment granting Congress the authority to levy an income tax.
Aides to Ryan shot down a Daily Caller report that the Budget Committee chairman supported Cain’s plan. “We need more bold ideas like this because it is specific and credible,” Ryan told the website.
Ryan spokesman Conor Sweeney told The Hill that the initial report was “incorrect.”
“Congressman Ryan has offered different ideas on how best to make the tax code fair, simple and competitive — but he appreciates the efforts of those willing to detail specific alternatives,” Sweeney said.
Asked if he could see Cain’s plan passing the House if the Georgia businessman were to become president, Tiberi said “it would be fascinating to have a hearing on it, to hear people’s concerns … with respect to creating a new taxing authority without getting rid of an existing taxing authority.”
Another GOP member of the Ways and Means Committee, Rep. Wally Herger (Calif.), said he was concerned about opening up “some new sources of revenue.” His worry: Cain’s plan “starts out at 9-9-9 and it ends up at 20-20-20.”
Other Republicans who questioned the introduction of a new sales tax included Reps. Phil Gingrey (Ga.) and Jim Jordan (Ohio), chairman of the Republican Study Committee.
Cain’s website presents his 9-9-9 plan as “phase one” of a transition to a single national sales tax, known as the “Fair Tax,” which would replace individual and corporate income taxes. That proposal is supported by dozens of Republicans in Congress, but a lead proponent, Rep. Steve King (Iowa), says Cain is pursuing the wrong strategy.
“I’m the author of the repeal of the 16th Amendment. If we have 9-9-9, that goes nowhere,” King said in an interview. “My concern, and the concern of many who support the Fair Tax [is], what if we end up with an income tax and a sales tax?”
King lauded the simplicity of Cain’s proposal, but he said to expect that a president would be able to usher in two major changes to the tax code was unrealistic. “You can’t expect a president to get two mandates on tax reform — let’s go for the one that counts,” he said.
Cain has conducted only modest outreach to members of Congress, several lawmakers said, and none has publicly endorsed his campaign.
In a Sunday appearance on NBC’s “Meet the Press,” Cain said he would rely on public support to pressure Congress to pass the 9-9-9 plan.
“The American people are embracing it such that when I have this legislation — ask Congress to introduce this legislation, the American people will understand it, and they are going to demand it. That’s how we get it passed,” he said.