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Herman Cain: "Opportunity Zones" and the 9-9-9 Plan

Herman Cain: "Opportunity Zones" and the 9-9-9 Plan

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Published by The Washington Post
Herman cain releases addition to his 9-9-9 plan.
Herman cain releases addition to his 9-9-9 plan.

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Categories:Types, Speeches
Published by: The Washington Post on Oct 21, 2011
Copyright:Attribution Non-commercial

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11/09/2011

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renewING Cities
 ACROSS
 
the
USA 
  p  h  o  t  o   ©   L  i  a  n  C  h  a  n  g
CAIN’S VISION
 
 for 
 
Renew distressed inner cities by reversing counter produc
-
tive incentives and bureaucratic micromanagement byre-introducing market based entrepreneurship.Create the most productive environment, rather thantrying to control outcomes.Understand there is no “one size fits all” approach andleave 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 howbig or small the job creators should be.Take a comprehensive approach that addresses the extraburdens government places on inner cities. The “Govern
-
ment Wedge” drives employment and wages everywhere,including inner cities. But only in inner cities is the Wedgecompounded with the adverse consequences of “socialengineering” and “industrial policy”.Acknowledge that production drives the economy.The mindset that “consumption drives theeconomy” is supportive of welfare dependencyand redistribution schemes. The productionmindset says “To better myself, I must makesomeone else better off. Before I can satisfymy needs I must first satisfy another’s needs.”With this mindset, Opportunity Zones canbe viewed as areas rich in underutilizedhuman resources and potential.Recognize that people respond to incentives.We have negative outcomes in inner cities largely becauseof negative incentives.Make it incentive based, so that only positive results andsuccess are rewarded.At present, the phase out of means-tested benefits acts likea very high marginal tax rate. Much of the inner citypopulation faces a marginal rate of 70% to over 100% asincome moves from $22,000 to $40,000, if the phase out istreated 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 newbusinesses are not profitable in early years. Further, thiswould attract lower skill, labor intensive businesses whichwould 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 stateand local authorities are willing to go to increase incentivesand reduce barriers and how much local support is inplace. Essentially, we “match” only the best ideas that aremost likely to succeed.Ideally, the zones should apply their understanding of 
Cain’s 3 Economic Guiding Principles
:
1. Production drives the economy, not spending,2. Risk taking drives growth3. Measurements must be dependable, and  focus on how reducing the “Government Wedge” enhances productive activity.
Opportunity Zone
Goals
www.
H
ERMAN
C
AIN.COM
 
Create a limited number of Opportunity Zone designationsso that the scarcity drives value and encourages competi
-
tion, but encourage each zone to be as large as possible.Establish minimum qualification standards based onpoverty levels, unemployment levels and other objectivemeasures indicating a distressed area.Winning districts will be awarded an Opportunity Zonebased on the ability of local entrepreneurs to identifybarriers holding them back. These will vary marketto market.Only those in the zone know best what is holding themback. There will be no one size fits all. The following areissues we hear most often and represent a few examples:
 Local permitting process is to slow and cumbersome.
 All building codes, regulations, restrictions, and requirementsshould be reviewed from the standpoint of whether they impedeeconomic 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 propertiesAccess to contracts and capital is skewed towards big businessIncentives 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 communitygroups, churches, and private sector associations, to submitplans indicating how barriers should be reduced andincentives increased to best suit their local circumstances.This empowers the community to take action withoutrelying on the establishment to take the first step.
Applicants should demonstrate visibility and localsupport of proposals.
Opportunity Zone
Design

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