Herman Cain knew he had a big bullseye on his back going into tonight's debate, but that foreknowledge didn't help him dodge many of the arrows shot his way.
At the beginning of the debate, each of Cain's opponents on stage was given a chance to attack Cain's 999 tax plan, and each one took advantage of the opportunity. Some arguments against the plan were more convincing than others. The 999 plan would certainly raise the net tax burden on some poor families. But Cain is right that the the state sales tax will exist whether or not there's a 9 percent federal sales tax to make up for the elimination of the payroll tax and lowered income taxes.
He simply had a difficult time defending himself against the charges, good and bad alike. And following the debate, Cain told CNN that he "misspoke" when he said he could imagine himself freeing all the detainees in Guantanamo Bay in exchange for one U.S. prisoner of war.
Here's the transcript of the GOP candidates piling on the 999 plan:
QUESTION: This is for all candidates. What's your position on replacing the federal income tax with a federal sales tax?
COOPER: I'll direct that to Congresswoman Bachmann. You've been very critical of Herman Cain's 9-9-9 plan, which calls for a 9 percent sales tax, a 9 percent income tax, and 9 percent corporate tax. In fact, you've said it would destroy the economy. Why?
BACHMANN: Well, I am a former federal tax litigation attorney. And also, my husband and I are job-creators.
One thing I know about Congress, being a member of Congress for five years, is that any time you give the Congress a brand-new tax, it doesn't go away. When we got the income tax in 1913, the top rate was 7 percent. By 1980, the top rate was 70 percent. If we give Congress a 9 percent sales tax, how long will it take a liberal president and a liberal Congress to run that up to maybe 90 percent? Who knows?
What I do know is that we also have to be concerned about the hidden tax of the value-added tax, because at every step and stage of production, you'd be taxing that item 9 percent on the profit. That's the worry.
In my plan -- again, that's a tax plan, it's not a jobs plan -- my plan for economic recovery is real jobs right now. I have a tax plan. I have a jobs plan. I have an energy plan and a plan to really turn this country around and create millions of high-paying jobs.
COOPER: Mr. Cain, a lot of prominent conservatives now are coming forward saying that your 9-9-9 plan would actually raise taxes on middle-class voters, on lower-income voters.
CAIN: The thing that I would encourage people to do before they engage in this knee-jerk reaction is read our analysis. It is available at hermancain.com. It was performed by Fiscal Associates. And all of the claims that are made against it, it is a jobs plan, it is revenue-neutral, it does not raise taxes on those that are making the least. All of those are simply not true.
The reason that my plan -- the reason that our plan is being attacked so much is because lobbyists, accountants, politicians, they don't want to throw out the current tax code and put in something that's simple and fair. They want to continue to be able to manipulate the American people with a 10-million-word mess.
Let's throw out the 10-million-word mess and put in our plan, which will liberate the American workers and liberate American businesses.
COOPER: Senator Santorum, will his plan raise taxes?
SANTORUM: Herman's well-meaning, and I love his boldness, and it's great. But the fact of the matter is, I mean, reports are now out that 84 percent of Americans would pay more taxes under his plan. That's the analysis. And it makes sense, because when -- when you don't provide a standard deduction, when you don't provide anything for low-income individuals, and you have a sales tax and an income tax and, as Michele said, a value-added tax, which is really what his corporate tax is, we're talking about major increases in taxes on people.
He also doesn't have anything that takes care of the families. I mean, you have -- you have a situation where, under Herman's plan, a single person pays as much in taxes as a -- as a man and a woman raising three children. Ever since we've had the income tax in America, we've always taken advantage of the fact that we want to encourage people to -- to have children and not have to pay more already to raise children, but also pay that additional taxes -- we gave some breaks for families. He doesn't do that in this bill.
And we're going to -- we've seen that happen in Europe. And what happened? Boom, birth rates went into -- into the basement. It's a bad tax for -- again, it's bold. I give him credit for -- for starting a debate, but it's not good for families, and it's not good for low-income...
COOPER: I'm going to give you 30 seconds to respond. That 84 percent figure comes from the Tax Policy Center.
CAIN: That simply is not true. I invite people to look at our analysis, which we make available.
Secondly, the -- the point that he makes about is a value-added tax -- I'm sorry, Representative Bachmann -- it's not a value-added tax. It's a single tax.
And I invite every American to do their own math, because most of these are knee-jerk reactions. And we do provide a provision, if you read the analysis, something we call opportunity zones that will, in fact, address the issue of those making the least.
COOPER: I want to bring in Congresswoman Bachmann since she was referenced by you.
BACHMANN: But Anderson, how do you not have a value-added tax? Because at every level of production you have a profit, and that profit gets taxed, because you produce one portion at one level, and then you take it to the next supplier or vendor at the next level, and you have an exchange. That is a taxable event.
And ultimately, that becomes a value-added tax. It's a hidden tax. And any time the federal government needs revenue, they dial up the rate and the American people think that it's -- that it is the vendor that creates the tax, but it's the government that creates the tax.
COOPER: Governor Perry, in your state, you have a 6.25 percent sales tax. Would taxpayers pay more under the 9-9-9 plan?
Herman, I love you, brother, but let me tell you something, you don't need to have a big analysis to figure this thing out. Go to New Hampshire, where they don't have a sales tax, and you're fixing to give them one.
They're not interested in 9-9-9. What they're interested in is flatter and fairer. At the end of the week, I'm going to be laying out a plan that clearly -- I'll bump plans with you, brother, and we'll see who has the best idea about how you get this country working again.
And one of the ways, right here in Nevada you've got 8-plus percent. You want nine cents on top of that, and nine cents on a new home -- or 9 percent on a new home, 9 percent on your Social Security, 9 percent more?
I don't think so, Herman. It's not going to fly.
COOPER: Mr. Cain, 30 seconds.
CAIN: This is an example of mixing apples and oranges. The state tax is an apple. We are replacing the current tax code with oranges. So it's not correct to mix apples and oranges.
Secondly, it is not a value-added tax. If you take most of the products -- take a loaf of bread. It does have five taxes in it right now. What the 9 percent does is that we take out those five invisible taxes and replace it with one visible 9 percent.
So you're absolutely wrong. It's not a value-added tax.
Now one other quick thing.
COOPER: Your time's up, I'm sorry.
CAIN: This whole thing about --
COOPER: You'll have another 30 seconds. Trust me, they're going to go --
COOPER: Yes, I guarantee it. In about a minute.
Congressman Paul, you called his plan dangerous today.
PAUL: Oh, it is, because it raises revenues, and the worst part about it, it's regressive. A lot of people aren't paying any taxes, and I like that. I don't think that we should even things up by raising taxes.
So it is a regressive tax. So it's very, very dangerous. And it will raise more revenues.
But the gentlemen asked the question -- he didn't even ask what we're talking about. He asked the question, what are you going to replace the income tax with? And I say nothing. That's what we should replace it with.
PAUL: But I do want to make a point that spending is a tax. As soon as the governments spend money, eventually it's a tax. Sometimes we put a direct tax on the people. Sometimes we borrow the money. And sometimes we print the money.
And then when prices go up, like today, the wholesale price index went up 7 percent rate, and if you look at the free market, prices are going up 9 and 10 percent. So that is the tax.
So, spending is the tax. That is the reason I offered the program, to cut $1 trillion out of the first year budget that I offer.
COOPER: Mr. Cain, in 30 seconds?
CAIN: Once again, unfortunately, none of my distinguished colleagues who have attacked me up here tonight understand the plan. They're wrong about it being a value-added tax.
We simply remove the hidden taxes that are in goods and services with our plan and replace it with a single rate 9 percent. I invite every family to do your own calculations with that arithmetic.
COOPER: Governor Romney, you have your only 59-point plan. In the last debate, Mr. Cain suggested it was too complicated. Is simpler better?
ROMNEY: Oftentimes simpler is better. And I know we're not supposed the ask each other questions, but if you permit.
Herman, are you saying that the state sales tax will also go away?
CAIN: No, that's an apple.
CAIN: We're replacing a bunch of oranges.
So, then Governor Perry was right that --
CAIN: No, he wasn't. He was mixing apples and oranges.
ROMNEY: Well, but will the people in Nevada not have to pay Nevada sales tax and in addition pay the 9 percent tax? CAIN: Governor Romney, you're doing the same thing that they're doing. You're mixing apples and oranges. You're going to pay --
ROMNEY: I'm --
CAIN: No, no, no, no. You're going to pay the state sales tax, no matter what.
CAIN: Whether you throw out the existing code and you put in our plan, you're still going to pay that. That's apples and oranges.
ROMNEY: Fine. And I'm going to be getting a bushel basket that has apples and oranges in it because I've got to pay both taxes, and the people in Nevada don't want to pay both taxes.
(CHEERING AND APPLAUSE)
ROMNEY: Now let me make this comment. Let's just step back here. We've got a lot of people in America that are out of work. We've got a lot of people in this state, 13.4 percent of the people in this state out of work. We've got home prices going down. We've got to talk about how to get America growing again, how to start adding jobs, raising incomes, and tax is part of it.
I want to reduce taxes on our employers to make it easier to invest in America. I want to reduce taxes on middle income families. I like your chutzpah on this, Herman, but I have to tell you, the analysis I did, person by person, return by return, is that middle income people see higher taxes under your plan.
If it's lower for the middle class, that's great. But that's not what I saw. I have to tell you, I want to get our burden down on our employers, on our people. I want to make sure our regulations work to encourage the private sector as opposed to putting a damper on it.
I want to get trade, opening up new markets for America. I want to also find a way to get our energy resources -- and they're all over the world, are all over this country, used for us. This is time to get America growing again. And that's what this campaign ought to be about.
COOPER: Thank you, Governor.
(CHEERING AND APPLAUSE)
COOPER: Speaker Gingrich, you have said in recent days that Mr. Cain's 999 plan would be a harder sell than he lets on. How so?
GINGRICH: Well, you just watched it.
(LAUGHTER) GINGRICH: I mean, look, there are -- first of all, I think that Herman Cain deserves a lot of credit. He has had the courage to go out and take a specific very big idea at the right level.
GINGRICH: And he has us at least talking about something that matters as opposed to the junk that all too often is masquerading as politics in this country. So I think that's important.
There are two parts to this. The first is, if you take his plan, and I think it's in the interest of the whole country to have serious people take his plan and go through it step by step. There are much more complexities than Herman lets on. OK. I mean, 999, when you get into details like you pay it on a new product, you don't pay it on an old product, et cetera, there's a lot more detail here than he lets on.
Second, I favor very narrow, focused tax cuts such as zero capital gains, 100 percent expensing, because I think, as Governor Romney said, jobs are the number one challenge of the next two or three years. Get something you can do very fast. Change on this scale takes years to think through if you're going to do it right.