Clark talks Cain's 9-9-9 tax plan and his own tax policy idea

CLARKONOMICS: With all the talk about tax policy during the recent Republican debate, I wanted to take a moment to offer my thoughts on the issue.

First off, what we're currently doing with tax policy in the United States is broken. Our tax code is a jumbled, corrupt mess, more like what you'd find in a Third World country with all the tax preference items that politicians put in to help their key contributors.

So I say kudos to GOP candidate Herman Cain for wanting to cleansheet it and wanting it to be clear and easily understood by all. Cain is advocating the 9-9-9 idea, where you have a simple 9% income tax, followed by a 9% federal sales tax and finally a 9% tax on corporations.

Clark's tax plan

My idea is different. If I were your emperor, my plan would be the 15-25-0 plan. Here's how it works:

• The first so many dollars of income you earn would be taxed at 15% (or 10%) -- the exact number would depend on economists doing math to see which rate would generate enough tax to be neutral with our tax levels today.
• If you are a big income earner, your income will be taxed at 25% after a certain point.
• There would be no corporate tax at all.
• In summary, no deductions, no credits, no exemptions, nothing. Just a plain, simple tax.

Why would I eliminate the corporate income tax on domestic earnings? Because taxing corporations just rewards those that funnel the most money to political parties, thereby funding the corrupt machine that is now Washington. Besides, whatever corporate tax they pay is passed on to you anyway as a customer. So I want to eliminate it entirely.

Clarity is the key

Whether it's 9-9-9 or 10-25-0 or a national sales tax of 23% like the Fair Tax people want, the idea is that capitalism requires transparency and continuity.

Right now, we have no continuity with tax policy in Washington. Tax rates go up and down and rules change all the time. Businesses are trying to make long-term decisions to build a new factory, put research and develop into a new product or hire new employees. But because they can't figure out the rules of the game, they go into the crouch position and nothing gets done.

Whatever plan it is, the key thing is make it simple, clear and understandable by everybody. We need to take the incentive out of the system for corrupting the process. You do that by flattening the tax and eliminating all gimmicks, deductions, exemptions and the rest.

Conclusion

Having an economic policy for our country involves more than just tax code. But the tax issue is a good starting point for us. A clear, understandable plans creates confidence. And that's what we lack right now. Corporate America is sitting on record reserves of nearly $2 trillion in cash that they're doing anything with because they're afraid to invest or expand. We need to restore confidence. One step toward that is having a tax code that people can respect and understand.

I know other Republican candidates are sharpening their knives and will try to attack Cain. But I think he deserves major credit for being alone among them in pushing for clarity.