the Cain plan would increase the budget deficit without doing anything to stimulate demand, because rich people can already spend as much as they want and are unlikely to spend more even if their taxes are abolished.
The poor and the middle class might increase their spending if they could keep more of their earnings, but they will unquestionably pay more under Phase 2 of the Cain plan. With no tax on capital gains, the rich would pay almost nothing, while elimination of all deductions and credits, as well as imposition of a national sales tax, must necessarily raise taxes on everyone else, especially those not now paying income taxes.
At a minimum, the Cain plan is a distributional monstrosity. The poor would pay more while the rich would have their taxes cut, with no guarantee that economic growth will increase and good reason to believe that the budget deficit will increase.
You've got 15 months to get used to the idea. You can start now.
For the second time in 10 days, the Senate on Thursday rejected Democratic efforts to take up a jobs bill championed by President Obama.
The vote to advance the bill was 50 to 50. Democrats needed 60 votes to overcome a Republican filibuster.
This time, the bill was narrowed to provide $35 billion to state and local governments to prevent layoffs of teachers, police officers and firefighters. To offset the cost, the bill would impose a surtax of 0.5 percent, starting in 2013, on income in excess of $1 million.
“If Romney and Obama were going head to head at this point in time I would probably move to Romney,” said Dale Bartholomew, 58, a manufacturing equipment salesman from Marengo, Ill. Bartholomew said he agrees with Obama’s proposed economic remedies and said partisan divisions have blocked the president’s initiatives.
But, he added: “His inability to rally the political forces, if you will, to accomplish his goal is what disappoints me.”
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