Rich W. Lowrie, Jr., the man Herman Cain calls his “co-architect” on the 9-9-9 tax code plan, got a warm welcome from the Cuyahoga Valley Republicans in Brecksville Thursday.
But when they raised concerns or asked questions about the plan, Lowrie didn't really elaborate.
The crowd of Cuyahoga Valley Republicans at the appeared to be more excited about the idea of a fair tax that would abolish the IRS than the brief YouTube appearance of Cain, a presidential hopeful.
Cain's 9-9-9 plan is about making the tax code simpler and more transparent, ridding the economy of embedded taxes that raise costs, Lowrie said.
After all, when people see how much they’re actually paying the government in taxes, “more people are going to want less government,” Lowrie said.
Anticipating a question before the official Q and A session, Lowrie said that the concern that the plan would raise prices for consumers isn't valid.
While the sales tax would go up for consumers, he expects that overall prices on products would go down. That’s because manufacturers wouldn’t have to raise their prices to make up for taxes the government places on them.
“It’s going to come out of your wallet one way or another,” he said.
In the official Q&A session, he fielded questions, but instead of sharing more details, he hammered his message home again and again.
Q: How would the Cain team make sure the tax levels wouldn’t be raised?
A: When people see how much they’re paying, they’ll want to keep costs low.
Q: How would they convince people to agree to add a federal sales tax onto their current sales tax?
A: “It’s not going to be an add-on tax,” Lowrie said.
Q: Won't companies keep their savings, rather than investing them?
A: “The problem is more than taxes,” he said. "You have an overall government wedge that is not just taxes. It’s regulations. … As soon as you reduce the size of that government wedge, as soon as you cut taxes, you are going to increase incentives.”
One notable exception was a question that led to Lowrie’s explanation of the “opportunity zone” exemptions for families under the poverty line and for some businesses and geographic areas to encourage growth.
Here’s how Lowrie said the 9’s in the plan break down:
- Business: A business’s gross sales would be taxed. That figure is the sales minus purchases from other businesses, capital investments and net exports. By making exports a deductible, the plan would reduce the price of exports and make U.S. companies more competitive.
- Personal: The plan would make this a “simple calculation,” Lowrie said—gross income minus charitable contributions. Anyone below the poverty line, which would be based on income and family size, wouldn’t have to pay the personal tax.
- Consumption: This would be a federal sales tax, which would be similar to the fair tax. The Cuyahoga Valley Republicans gave a presentation on the fair tax before Lowrie spoke. The fair tax model would repeal most federal taxes, replacing them with a sales tax, and abolish the IRS.
Lowrie said the Cain campaign would like to see the country move toward a fair tax, but that the U.S. isn’t quite ready for that change.