Herman Cain: "Opportunity Zones" and the 9-9-9 Plan
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Transcript of Herman Cain: "Opportunity Zones" and the 9-9-9 Plan
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Renew distressed inner cities by reversing counter produc-
tive incentives and bureaucratic micromanagement by
re-introducing market based entrepreneurship.
Create the most productive environment, rather than
trying to control outcomes.
Understand there is no one size fits all approach and
leave the highest degree of freedom to the creativity of
local entrepreneurs and risk takers to figure out kind of
businesses to create, what type of jobs to create and how
big or small the job creators should be.
Take a comprehensive approach that addresses the extra
burdens government places on inner cities. The Govern-
ment Wedge drives employment and wages everywhere,including inner cities. But only in inner cities is the Wedge
compounded with the adverse consequences of social
engineering and industrial policy.
Acknowledge that production drives the economy.
The mindset that consumption drives the
economy is supportive of welfare dependency
and redistribution schemes. The production
mindset says To better myself, I must make
someone else better off. Before I can satisfy
my needs I must first satisfy anothers needs.
With this mindset, Opportunity Zones can
be viewed as areas rich in underutilized
human resources and potential.
Recognize that people respond to incentives.
We have negative outcomes in inner cities largely because
of negative incentives.
Make it incentive based, so that only positive results and
success are rewarded.
At present, the phase out of means-tested benefits acts lik
a very high marginal tax rate. Much of the inner city
population faces a marginal rate of 70% to over 100% as
income moves from $22,000 to $40,000, if the phase out i
treated as a tax. Why try to earn one more dollar if
70-100% is taxed.poverty trap can be closed.
Tax relief should focus on payroll taxes since most new
businesses are not profitable in early years. Further, thiswould attract lower skill, labor intensive businesses which
would be a better match for the labor force.
Make the application process voluntary but competitive.
Base the award of an Opportunity Zone on how far state
and local authorities are willing to go to increase incentive
and reduce barriers and how much local support is in
place. Essentially, we match only the best ideas that are
most likely to succeed.
Ideally, the zones should apply their understanding ofCains 3 Economic Guiding Principles:
1. Production drives the economy, not spendi
2. Risk taking drives growth
3. Measurements must be dependable, and
focus on how reducing the Government
Wedge enhances productive activity.
Opportunity Zone Goals
www.HERMANCAIN.COM
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Create a limited number of Opportunity Zone designations
so that the scarcity drives value and encourages competi-
tion, but encourage each zone to be as large as possible.
Establish minimum qualification standards based on
poverty levels, unemployment levels and other objective
measures indicating a distressed area.
Winning districts will be awarded an Opportunity Zone
based on the ability of local entrepreneurs to identify
barriers holding them back. These will vary market
to market.
Only those in the zone know best what is holding them
back. There will be no one size fits all. The following are
issues we hear most often and represent a few examples:
Local permitting process is to slow and cumbersome.
All building codes, regulations, restrictions, and requirements
should be reviewed from the standpoint of whether they impede
economic growth.
Minimum wage laws prevent many unskilled and inexperienced
workers (i.e. teens) from getting their first job and prices them
out of the market
Zoning laws are outdated and hold back development
Prevailing wage laws unfairly restrict the supply of labor
There should be more tenant control of HUD properties
Access to contracts and capital is skewed towards big business
Incentives that are anti family should be repealed.
Help should be based on a hand up,
rather than a hand out
Allow not just local governmental authorities but communi
groups, churches, and private sector associations, to submit
plans indicating how barriers should be reduced and
incentives increased to best suit their local circumstances.This empowers the community to take action without
relying on the establishment to take the first step.
Applicants should demonstrate visibility and local
support of proposals.
Opportunity Zone Design
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The 9-9-9Plan will essentially turn the whole country
into one giant Opportunity Zone. Some of the most
attractive features of the original Enterprise Zones,
such as a zero capital gains tax, immediate expensing of
business equipment, and no payroll taxes are factory
installed in the 9-9-9Plan for the whole country
to benefit.
In addition, districts designated as Opportunity Zones
will have the following additional benefits:
Deductions to employers for the total amount of payroll
employed within in the Zone, subject to income limits. By
basing it on payroll and not income, it reduces gaming and
helps new businesses which generally dont generate profits
in early years.
Value-added businesses that are more labor intensive get the
most bang for the buck. This will match the existing labor
pool better than, say, a high tech R & D lab or a law firm.
Deductions will not be limited to new businesses or new
jobs but are designed to benefit all within the Zone. Why not
provide relief and reward those already struggling in the Zone,
many of whom have been doing so for a long time. They are
most likely to lead to economic renewal.
Anyone living in the Zone will get a deduction (not a credit) andanyone working in the Zone will get a deduction (subject to
income limits).
Means tested benefits should be restructured or reformed so they
dont counteract the incentives for work.
Opportunity Zones&
The 9-9-9 Plan
ITS TIME
toRENEW
thUNITED STATES ofAMERICA
Friends of Herman Cain, Inc.
P.O. Box 2158 Stockbridge, GA 30281 (678) 601-2772
Paid for by Friends of Herman Cain, Inc.www.HERMANCAIN.COM