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Cain’s ‘Opportunity Zones’ Plan For The Poor: Give Up Worker Protections And Move To The Inner City

By Pat Garofalo on October 21, 2011 at 12:33 pm

"Cain’s ‘Opportunity Zones’ Plan For The Poor: Give Up Worker Protections And Move To The Inner City"

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Former pizza magnate and 2012 GOP presidential candidate Herman Cain, when asked about the multiple analyses showing that his 999 tax plan would hammer the poor, simply asserts that those numbers are wrong, alluding to his campaign’s own analysis of the plan (which does not actually include a distributional breakdown). When the heat on Cain got even more intense, he explained that he has a secret plan to protect low-income Americans from 999, but he just hadn’t told anybody about it. “We’ve already made provisions for that, but I just haven’t told the public and my opponents about it yet,” he said on Wednesday.

Today, finally, Cain released the latest tweak of his plan — the creation of what he calls “opportunity zones.” According to Cain, these will be special zones placed in inner cities, and those who work or live in the zones will receive deductions from 999 (which otherwise wipes out all of the traditional tax deductions, including the Earned Income Tax credit, child deduction and the mortgage interest deduction). Evidently believing that all economic analysts are also mind readers, Cain said today that those who criticized his plan simply didn’t read it:

Now, the opportunity zone feature has been in our analysis all along. But just like I accused some of my opponents the other night of not having read the plan, we now have proof they didn’t read it. If their staffs had done the proper job and read it all the way through, they would have discovered what I’m about to share with you.

Watch it:

Two days after admitting that this facet of his plan was secret, Cain now claims that those criticizing his plan “didn’t read it.” In Cain’s original 999 document there is indeed one line saying, “features a platform to launch properly structured Empowerment Zones to renew our inner cities.” Shockingly enough, independent analysts didn’t work out that this meant a bunch of specific business deductions.

And, of course, there’s a catch — in order to qualify for zone status, a jurisdiction will have to abolish important worker protections like the minimum wage:

Cain hopes to encourage growth in impoverished areas by further lowering the tax burden of residents. But for a jurisdiction to qualify, it would have to adopt a number of conservative policies that may seem unpalatable to liberals, including eliminating the minimum wage, instituting school vouchers, and declaring the area “right-to-work” – or non-union.

Cain, quite literally, only grants deductions to those who are willing to move into these inner city zones where his tax breaks magically apply, and in exchange they have to forego basic economic protections. Everyone else is out of luck.

Cain also laid out his supposed plan to protect low-income Americans from getting slammed by his trio of taxes, saying that those beneath the poverty line would be exempt from his nine percent personal income tax. Leaving aside that he’s still walloping families who are barely above the poverty line with a huge tax increase, those below the poverty line will still be stuck paying a nine percent sales tax, when their current tax rate is closer to 2 percent, if they have federal income tax liability at all.

Finally, Cain claims that the plan would be revenue neutral, and his analysis does indeed show revenue neutrality (if you trust the numbers). However, his analysis clearly states, “We assume no exemptions, deductions or credits” (except for a passing mention of poverty exemptions), whilst Cain laid out a whole host of opportunity zone deductions today. So is 999 now going to create deficits or will he have to morph it into 12-12-12 or 15-15-15 in order to make his numbers add up?

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