When I first heard about Herman Cain’s 9-9-9 tax plan, I assumed it was simply nonsense. But further reporting and analysis has made it clear that 9-9-9 is roughly equivalent to a flat 27 percent consumption tax. And when you run the numbers, this is actually a terrifyingly plausible vision of conservative tax policy. Here’s a chart of federal revenue as a percent of GDP if you peg it to 27 percent of personal consumption expenditures:
This is actually quite close to Paul Ryan’s plan to peg federal revenue at 18 percent of GDP. It’s not a nonsense number dreamed up by some pizza guy. It hits the target. It just does so in a hideously regressive way, such that poor families and middle class families with children will end up paying wildly higher tax rates while the rich get a giant tax cut. Meanwhile, everyone’s Medicare benefits need to be slashed. That’s radical, in a sense, but no more so than the House GOP budget voted on earlier this year. It’s just a different framing and branding around the same idea.
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