‘9-9-9’ plan will raise taxes in US: Cain

WASHINGTON: Republican presidential candidate Herman Cain acknowledged on Sunday his "9-9-9" tax reform plan would raise taxes on some Americans but denied criticism it would help the rich while hurting the poor.

"Some people will pay more. But most people will pay less," Cain, a former chief executive of Godfather's Pizza who has never held elected office, said on NBC's "Meet the Press" program.

The acknowledgment of higher taxes could give ammunition to a growing number of Cain critics, including anti-tax crusader Grover Norquist, who oppose his plan.

Cain entered the presidential race as a long shot but has recently shown signs of front-runner status with backing from fiscally conservative Tea Party activists who believe his plan would lead to lower federal taxes.

The 9-9-9 plan would replace the complex US tax code with a 9 percent income tax, a 9 percent corporate tax and a new 9 percent national sales tax.

"Who would pay more? The people who spend more money on new goods

That sales tax only applies to people who buy new goods not used goods.

That's a big difference," Cain told NBC.

Cain placed first in an NBC-Wall Street Journal poll among Republican candidates and second in a Reuters Ipsos poll but his fundraising totals in the third quarter were far behind the leading contenders former Massachusetts Governor Mitt Romney and Texas Governor Rick Perry.

President Barack Obama, a Democrat, faces a rough fight for re-election in November 2012 but his Republican rivals must convince voters they have a better plan to create jobs and get the economy moving again.

Despite its popularity in some quarters, Cain's 9-9-9 plan is under fire from across the political spectrum and independent analysts who say it would raise taxes on the poor and middle class.

Norquist said in a recent interview with Reuters Insider he worries that all three taxes in Cain's plan could be raised in future.

The Wall Street Journal warned a national sales tax a fixture of many western economies could raise taxes on goods in some areas to 17 percent or more when combined with state and local levies.

"If you add them together, yes, you'd get that number," Cain said.

But he dismissed the idea of considering state taxes alongside the 9-9-9 plan as "muddying the water" because federal taxes would go down in most cases.

He said the plan's elimination of "invisible" taxes now paid by manufacturers under the current system would lead to lower retail prices.

"In reality, those taxes go away, so the prices of goods don't go up," Cain said. "They actually go down based upon competition. Competition drives prices down."

Copyright Reuters, 2011