The Corner

Simply Misunderstood

Over at Bloomberg View, I have a follow-up to my column earlier this week on Herman Cain’s tax plan. It’s remarkable how many of the fans of that plan don’t understand its most basic features–and one sometimes suspects that Cain is one of the people who don’t understand them. Critics of my column took issue with me, for example, for saying that what Cain calls a “corporate income tax” is actually a VAT, with some of the critics calling me a liar. I plead not guilty:

Today’s U.S. corporate-income tax lets companies deduct wages as a cost of doing business, and that’s what a tax on “net business profits” would do too. Cain’s business tax includes no such deduction, but it does let companies deduct the cost of purchases from other businesses. That’s what a value-added tax does. Perhaps that’s why the scoring report commissioned by the Cain campaign, and available on the campaign website, refers to the tax as a “subtraction method value added tax.”

There are reasonable arguments for a VAT, although I don’t happen to find them persuasive. But a candidate proposing one should call it what it is.

I go to defend, among other things, my statement that the Cain plan has to involve either increased consumer prices or decreased wages.

Ramesh Ponnuru — Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

Most Popular

PC Culture

The New, New Anti-Semitism

The old anti-Semitism was mostly, but not exclusively, a tribal prejudice expressed in America up until the mid 20th century most intensely on the right. It manifested itself from the silk-stocking country club and corporation (“gentlemen’s agreement”) to the rawer regions of the Ku Klux Klan’s lunatic ... Read More
Immigration

The Left, the Wall, the Truth

Democrats and others on the left offer three reasons for their opposition to building a wall on America's southern border. 1. A wall is ineffective. 2. A wall is too expensive. 3. A wall is immoral. Each one is false, so false as to constitute lies. So, the only question is: Do Democrats and others on ... Read More