- The Washington Times - Monday, October 17, 2011

CONCORD, N.H. — Herman Cain’s signature “9-9-9” tax-reform plan has been the battle cry accompanying his meteoric rise through the Republican presidential ranks. But political insiders in New Hampshire say the simple formula that has helped propel his candidacy also could derail it.

Mr. Cain says the plan, which would replace the federal tax system with a 9 percent sales tax on new goods, a 9 percent personal income tax and a 9 percent tax on business income, is the kind of bold economic solution voters are demanding.

But the call for a national sales tax could chase away the very limited-government voters Mr. Cain, the former CEO of Godfather’s Pizza, will need to capture as he tries to outflank Mitt Romney, who easily has been the most consistent Republican in the field.

“Anytime you are proposing any kind of new taxes, it is very hard to explain to voters, and it makes it an easy thing for your opponents to attack — particularly in New Hampshire, where there is no sales tax,” said Neil Levesque, director of the New Hampshire Institute of Politics at St. Anselm College. “And it is risky to start proposing stuff like that in the middle of the campaign — things that haven’t been vetted.”

That will serve as part of the backdrop when Mr. Cain and his GOP rivals take the stage Tuesday night for a debate in Las Vegas.

Mr. Cain likely will have to address the politics of his plan once again, including whether Nevada voters have any appetite for lumping a federal sales tax onto their local rate.

“No taxes sell with the primary voters here,” said David F. Damore, a political science professor at the University of Las Vegas. “We already have one of the highest sales taxes in the country. In Clark County, it is 8.1 percent.”

Campaigning in New Hampshire last week, Mr. Cain acknowledged he will have to sell “9-9-9.”

“I know it’s going to be an uphill battle … because it is so different,” he said. “We start with ‘throw out the current tax code,’ where most people don’t know what’s in it anyway. Most people can’t even tell you what their effective tax rate is. This one is visible, simple, transparent, efficient and fair. Not fair according to Washington’s definition; fair according to the definition of Webster’s.”

Beyond his tax plan, Mr. Cain also faces questions about whether his campaign is built for the long haul of a presidential campaign. At this point, he lacks the financial muscle and ground organizations that historically are needed to counter attacks and win support in the early primary contests.

In New Hampshire, which could hold the first primary in less than two months, yard signs for Mitt Romney, Ron Paul and Gary E. Johnson dotted the neighborhood streets last week, but Cain signs were noticeably missing.

Still, he won a surprise victory at a Florida straw poll last month, and his support nationwide has been climbing, particularly as backing for Texas Gov. Rick Perry has dropped.

A CNN/ORC International poll released Monday found that among potential primary voters nationwide, 26 percent support Mr. Romney and 25 percent support Mr. Cain. Mr. Perry has fallen to a distant third place, at 13 percent. A Rasmussen Reports poll, meanwhile, showed Mr. Cain ahead of President Obama in a hypothetical matchup.

Cain now has the chance to make the case for why he should be the challenger to Mitt Romney,” said Scott Rasmussen, president of Rasmussen Reports. “Many others have auditioned for the role and fallen flat, and it remains to be seen whether Cain’s fate will be similar.”

As Mr. Cain has risen in the polls, his campaign and his 9-9-9 plan are under more scrutiny.

New Hampshire House Speaker William O’Brien said that state lawmakers have spent years wrestling with an alternative way to raise revenue in New Hampshire and reduce the heavy reliance on property taxes. But after watching states such as New Jersey fail to make significant cuts to their property-tax burdens by adopting taxes on income, the Republican said, elected officials and the electorate have grown skeptical of the notion that adding a tax will lead to lower taxes.

“As much as all of us share concern over the impact of what is our primary tax base in New Hampshire, the property tax, no one I think wants to go to a broad-based tax,” Mr. O’Brien said. “So, to the extent the Republican primary voters begin to understand what Mr Cain is suggesting, I think there is going to be some resistance to it.”

Grover Norquist, president of Americans for Tax Reform, suggested the same can be said on the national level, where voters are attracted to the plan’s simplicity, but would be more interested in paring down the current system rather than inventing another — especially one in which seniors would pay more in sales taxes for medicine and health care.

“Normally, if you have a tree or a rosebush that is growing out of control, you prune it back. You don’t plant a whole new one and hope it can grow properly,” Mr. Norquist said, adding that he would encourage Congress to vote against the plan.

Mr. Cain also has faced criticism from the left, with liberal budget groups arguing that his plan would shift more of the tax burden onto the poor and the middle class.

He has struggled to explain the details of his own plan. Asked last week whether a business would be able to deduct a computer designed in the United States with Malaysian parts assembled in China, Mr. Cain answered, “I have no idea.”

“See, this is the problem that some people inside Washington have with 9-9-9. The American people understand it, the American people are embracing it,” Mr. Cain said on NBC’s “Meet the Press” this weekend. “So, actually, when I have this legislation — ask Congress to introduce this legislation — the American people will understand it, and they are going to demand it. That’s how we get it passed.”

Whatever the fiscal merits of the plan, Michael Dennehy, a longtime New Hampshire GOP political consultant, said Mr. Cain’s problems are analogous to those that Steve Forbes faced when he pushed the flat tax during his 1996 presidential bid.

“It is such an overwhelming change that there is so much that you can attack someone on, saying these people are going to suffer as a result,” Mr. Dennehy said, using the popular mortgage-interest deduction as an example.

Former Sen. Rick Santorum of Pennsylvania saw the opening in the debate last week at Dartmouth College, where he asked the crowd, “How many people here are for a sales tax in New Hampshire?

“Raise your hand. There you go, Herman. That’s how many votes you’ll get in New Hampshire.”