A number of years ago, I once took a food-safety class where the instructor had a simple adage when dealing with food that may have been left out or refrigerated a tad too long.

"When in doubt, throw it out."

No doubt, GOP Presidential candidate Herman Cain drew on lessons learned during his foodservice career, because he views the current tax code in the same vein as three-day-old sushi.

Something to be thrown out.

After thrashing GOP White House hopefuls Rick Perry and Mitt Romney in a recent Florida Straw poll, the former CEO of Godfather's Pizza and the National Restaurant Association told a national TV audience to forget about tinkering or fixing the tax code, just toss it out.

Instead, he proposed his triple 9 plan to cut taxes -

a 9 percent business flat tax, a 9 percent personal tax and a 9 percent national sales tax.

According to Cain, his plan replaces the payroll tax, corporate and personal income taxes, the capital gains tax, and the estate tax.

He said that would help jump start corporations to begin investing the roughly $2 trillion in cash they're currently hording to get the economy moving.

Now in a former life covering the restaurant industry, I interviewed Cain on a number of occasions and found him to be both a passionate and powerful orator, and convincing enough to be able to sell you an airplane even if you didn't have a pilot's license.

Conversely, sometimes he's a bit vague on facts or unintended consequences.

For example, some argue Cain's 9-9-9 plan would hit the poor and middle class hardest because the sales tax would more than likely represent a larger portion of their income than say someone in a higher income bracket.

Another point is that supporters of a flat tax such as Cain's, is there is still the problem of defining income if you are not a traditional wage earner, but rather own a business. Would it be covered under gross receipts?

What if your business is a C corporation, an LLC, a  non-profit, or a sole proprietor? The tax would work differently, would it not, under those classifications?

Cain doesn't really say.

Nevertheless, he's made what so far has been an uninspiring field of GOP candidates a bit more interesting to listen to as November 2012 gradually encroaches.

And as far as throwing out the tax code, I'm sure there would be a good deal of solidarity on that - from both sides of the aisle.

 

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access