We're going to stick with actual issues rather than take part in the media circus sucking all of the air out of the room. There has been little in the way of policy proposals offered by any of the GOP candidates. Two bright and bold dpeartures from the assault of talking points and uninspired sound bites have been in the area of tax reform. Herman Cain has offered 9 9 9, and Rick Perry has offered the 20% flat tax postcard.

Both proposals are bold. Both solve problems that are frustrating to the taxpaying public. Both proposals are introduce new problems. Cain's proposal is a simple reduction in income tax rates to 9% for personal and corporate rates, elimination of all deductions, and the introduction of a 9% federal sales tax, the so called "fair" tax, a consumption tax. Perry's proposal pegs the income tax rate at 20 % with very limited deductions - a flat tax. We have examined both in theory back in April of this year, see A Taxing Problem

Now we have actual proposals to examine. Since Cain went first, we will start with 9 9 9. It is obviously the proposal of a businessman with a marketing background. We actually like it. Cutting income tax rates to 9% with no deductions will immediately free up money in the private sector.

Under the current system, after deductions, the tax rate paid to the treasury winds up being about 20 % of taxable income. This immediately cuts in half the real tax rate. That money gets to stay with the taxpayer - individual or corporate, and would provide an instant and real stimulus to the economy.

His plan introduces a federal sales tax to make up the shortfall from the cut in income taxes. He claims that the revenue generated will make the plan revenue neutral, and remove the drag on the economy that a high income tax creates. We don't know if his numbers are correct. Numbers can be massaged to say anything, as we found out during the budget "deal". Still Art Laffer (of "Laffer Curve" fame during the Reagan years) has signed on. We would have to try it to see if it works as a matter of practice.

We support a consumption tax over an income tax in theory, and have floated the idea to be tried in a limited form in  Net Taxes . We say "in theory" because we have real concerns that without repeal of the 16th Amendment to the Constitution (authorizing a federal income tax), the consumtion tax will be adding a new form of taxation without guaranteeing relief from other areas of taxation.

Cain's plan deliberately introduces this new tax without addressing the Constitutional mandate of the income tax. He sells it by trading off on cutting income tax rates. We take Mr. Cain at his word that this is what he intends, but Mr. Cain will serve at maximum 8 years. Congresses flip back and forth all the time. Without elimination of the income tax, future administrations will have the ability to raise both the income tax and the sales tax to whatever level they deem appropriate.

For this reason we find 9 9 9 to be a half-measure that leaves the door open to future mischief. Mr.Cain would do better to promote a federal sales tax linked to the elimination of the income tax. Still, it is a bold idea, and more worthy of our attention than his current troubles.

The Perry Plan is a flat 20% income tax, with very limited deductions. It is a good attempt to address the concerns of the taxpaying public's frustration within the current structure of an income tax. It steps entirely away from the idea of the "fair" tax proposal, and settles instead on simplifyng the current tax code.

You've seen the prop - the postcard. Write down your income. Deduct $12,500.00 for every member of the household. Eliminate all deductions except the home mortgage deduction and charitable contributions. What's left is your taxable income. A family of 4 making $50K per year pays no taxes. $44K is the median income for the country. Simple, elegant and intelligent. We like this idea as well.

He adds on sweeteners for the conservative base as well - capping and reducing spending, balancing the budget, elimination of corporate and farm subsidies, elimination of capital gains taxes, and elimination of the death tax. All of these add-ons make the idea even better for us. So, what's the down side?

It's optional. Channeling Obama, Governor Perry said "if you like your old tax system, you can keep it". That's a problem, especially for the middle class. The rich have armies of CPAs on payroll to keep taxes to a minimum - just ask Warren Buffet, and Michel Moore. The poor will continue to not pay into the system. The middle class has the dilemma.

Now instead of spending hours poring over receipts and forms, or hiring H & R Block to do it for you, the middle class will be doing this both ways to figure out which way works out best for them. Let's say that family of four makes $60K. Under the Perry Plan their tax comes out to be $2000.00. Does it work out better under the old system? It depends on your tax professional, or your own skill with numbers and ability to absorb mental pain. There is no real reform that simplifies the tax code for middle class taxpayers.

Governor Perry has put out half-measure as well. We support every detail of the plan, as well as his add-ons. We do not support it being optional, because by being optional, it does nothing to benefit the middle class, and allows all of the "loopholes" to cotinue for those who profit from them, rich and poor. Being "optional" is not tax reform. It is a burden on the middle class and smoke and mirrors for everyone else.

The only way this works is to make this change the law of the land for everyone. Then it is real reform. There are no Constitutional issues to address, just legislative ones. Embrace your idea Governor Perry. It is a bold plan, be bold with it.

Common Sense Dictates

While we are embroiled in gossip and scandal, the true scandal in this Presidential race is that almost no one is adressing the issues that affect everyday citizens. Mr. Cain and Governor Perry have attempted to do just that, and unfortunately, they are being overshadowed by the media focusing its attention on bread and circuses. We commend both gentlemen for introducing some actual ideas instead of running from them.

It's time for the rest of the GOP pack to join in with some specific solutions. With the exception of Newt Gingrich, who has a paper on everything at his website (take a hint Newt - most people are too busy keeping ahead of the economy to read one of your papers) and Ron Paul, everyone is spending all of their time trying to not screw up. It makes all of  you invisible.

The country is not interested in voting for someone who relies on vague platitudes and scripted oratory to lead the country. We tried that last time and it didn't work out so well. We're not interested in sound bites or bumper sticker slogans either.The electorate wants bold and specific ideas. Cain and Perry have at least done that. The rest need to join in or go home. So says Common Sense.

RLB