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Anti-tax crusader questions Cain's "999" plan

Americans For Tax Reform member Grover Norquist speaks at the 38th annual CPAC meeting in Washington
Americans For Tax Reform member Grover Norquist speaks at the 38th annual CPAC meeting in Washington

By Patrick Temple-West and Kevin Drawbaugh

WASHINGTON (Reuters) - U.S. anti-tax activist Grover Norquist questioned Republican presidential contender Herman Cain's "999" tax reform plan on Friday, saying it opened the door to future tax increases.

For Norquist -- founder and president of Americans for Tax Reform, a powerful anti-tax lobbying group -- that is a future not to be tolerated.

"I applaud (Cain's) idea of having radically lower rates," Norquist said in an interview with Reuters Insider. "However, he creates three different taxes. Every one could rise in the future. That's my concern."

Norquist's group has persuaded hundreds of Republicans, and a few Democrats, to sign a pledge promising never to support any type of tax increase.

At a time of sky-high deficits, most Republicans are refusing to consider tax increases of any kind -- even closing corporate loopholes -- as part of balancing the U.S. budget and overhauling the nation's tax code.

Asked if he was confident about the political wisdom of such a stand, reinforced by his group's pledge, Norquist said he had no concerns about next year's elections.

"I'm very confident," he said, that voters are looking for candidates who will say, "'I'm not going to raise your taxes, period.' It's a winning political position."

Between now and then, he said, he sees the potential for two substantive tax changes. One would give multinational corporations a tax break on repatriating foreign profits.

Another would extend a tax break that lets businesses write off the full value of purchasing certain equipment.

Norquist said he was pessimistic about the prospects for a thorough tax code overhaul before the November 2012 election. "I don't think there is time."

CAIN'S '999'

Cain's plan for 9 percent income, corporate and national sales tax rates had strengths and weaknesses, Norquist said.

Comparing Cain's plan with European value-added, or VAT, taxes, Norquist said VAT started "with low rates and they all grew."

Cain, a former pizza executive, has surged among Republican presidential candidates in recent opinion polls. He led the field in an NBC News/Wall Street Journal poll this week.

In a Republican debate on Tuesday, the other candidates attacked Cain's plan for establishing a federal sales tax.

Liberal critics have said his plan would benefit wealthy taxpayers at the expense of middle-and lower-income earners.

Norquist said he preferred a tax plan introduced by Republican Representative Paul Ryan that would cut the top individual and corporate tax rates to 25 percent from 35 percent.

The Ryan fiscal 2012 budget plan was approved by the House of Representatives, but did not pass the Senate.

"It's the safer way" to achieve tax reform, Norquist said of Ryan's budget.

Americans for Tax Reform was founded in 1985 at the request of then-President Ronald Reagan.

Over the years, Norquist has won fame for attacking, and often defeating, candidates who did not sign his pledge.

In the current Congress, seven Republican senators and six of 242 House Republicans have not signed it.

Earlier this month, Republican Representative Frank Wolf said the pledge was "paralyzing Congress" and was "a roadblock to realistically reforming our tax code."

(Editing by Peter Cooney)

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