8/3/2019 Herman Cain: "Opportunity Zones" and the 9-9-9 Plan

1/4

8/3/2019 Herman Cain: "Opportunity Zones" and the 9-9-9 Plan

2/4

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

8/3/2019 Herman Cain: "Opportunity Zones" and the 9-9-9 Plan

3/4

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

8/3/2019 Herman Cain: "Opportunity Zones" and the 9-9-9 Plan

4/4

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