Herman's 9-9-9: One of the best policy proposals you had no idea was so good (and serious)

When I think back on Herman’s presidential run in the 2012 cycle (technically he was out of the race by December 2011), I always enjoy remembering how his 9-9-9 tax plan catapulted him to the top of the polls in fall 2011.

The plan resonated with a lot of people because it was bold and he presented it really well.

But I also remember the role of 9-9-9 with some frustration because it was so roundly misrepresented, and in many cases absurdly dismissed as some sort of slogan or gimmick.

The 9-9-9 plan was a very serious and substantive plan. Six months after the campaign ended, I served as editor of a book Herman did with Rich Lowrie (who was also the co-author of the plan itself) in which they explained in detail how they’d developed the plan and how it would work.

You can still buy it here.

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The plan was very simple, but that wasn’t a knock against it. Indeed, that was the beauty of it. It would have replaced the entire federal tax code – with all its exemptions, credits, deductions and the like – with three straightforward taxes. We’d have had a 9 percent tax in personal income, a 9 percent sales tax and a 9 percent business tax. That’s it. Those are very low rates, but you have to keep in mind that you’d pay it without claiming any exemptions or deductions. Thus, you’d eliminate all incentives to change people’s behavior based on the tax implications.

That was on purpose. The thinking was that there are too many things people do not out of sheer rationality, but simply to save a few dollars on their taxes. Having very low rates and no deductions would solve that.

Adding the national sales tax was a radical idea, but it was based on the idea that we should balance the tax picture by taxing consumption as much as we tax income and savings.

The response of the political class and much of the media was aggravating to say the least. In one of the 2011 debates, then-Utah Gov. Jon Huntsman said he thought 9-9-9 was the price of a pizza, prompting chortles from the political in-crowd. Herman just smiled and shook his head. Television commentators mocked the plan and acted as though the three digits were all the plan consisted of. Nothing but a marketing gimmick.

But the voters were intrigued. They liked the idea of a simplified tax code that wouldn’t require them to spend billions every year on tax-preparers when they could file their taxes themselves in a few minutes based on simple calculations. Stephen Moore, who went on to become an economic advisor to President Trump, said 9-9-9 would have been “rocket fuel for the economy.”

Here’s a detail I’ve never revealed publicly until now. At this point I don’t see the harm. When Herman and Rich were trying to come up with the exact tax rates that would have rendered the plan revenue-neutral compared with the current tax code, Rich came up with the rate of 8.75 percent. He told Herman the plan would have to be 8.75-8.75-8.75.

Herman said he shook his head and smiled: “Rich, let’s just make it 9-9-9.”

It was certainly not a marketing gimmick, but Herman understood the power of branding. Calling the plan 9-9-9 made it easy to talk about and easy for people to understand. In some ways it was also the plan’s undoing, because it made it easy for stuffy elitist types to mock it.

Yet I can’t think of a tax plan proposed by anyone in the past 10 years that has captured the public’s attention as much as 9-9-9 has, nor can I think of a single policy proposal that ratcheted its author to the top of the presidential polls like this one did. Herman’s 9-9-9 was a really good idea, and it would have been really good policy.

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Of course, it would have deprived political elites of the power to manipulate people through the tax code, so they would probably have never let it happen. But that’s on them. It’s not on Herman. People who come up with great ideas deserve more support from the voters. The people who kill those great ideas for their own nefarious purposes deserve less.

And 9-9-9 deserves a better fate in history’s collective memory than it’s tended to receive. Maybe this will help turn that around.