At the time of this writing, late 2023 marks the beginnings of another presidential election cycle in these United States. The 2024 US Presidential Election is happening next year, and I thought it would be fitting for me to return to a previous Presidential Election as part of this Economic History Case Studies Entry. To begin, allow me to mention that, since the earlier months of 2023, I have been spending a sizeable portion of my personal time playing SimCity 4, which came out back in 2003. I have already devoted a post or two on the subject, so I will not delve too much into the discussion here. What I will say is that the game has a rather interesting approach to taxation under both Production for Profit and Production for Utility.
When the player starts the game, they can manipulate the taxation rates for various “Residential,” “Commercial,” and “Industrial” categories. The rates are able to be raised as high as 20% to as low as 0%, affecting how much the player receives in tax revenue on a monthly basis. Higher tax rates reduce the extent of economic activities done by a particular tax bracket, whereas lower tax rates do the complete opposite. Although SimCity 4 operates in a black box where randomness and unpredictability are always constant factors, it is nonetheless significant that the default rates are always set at 9%, and the player is encouraged to lower or raise those rates as needed.
This Entry would have ended there if not for the fact that a strikingly similar taxation system was at one point touted by a presidential candidate during the lead up to the 2012 Presidential Election. A few years had passed since the onset of the Great Recession and the Populist surge that would later emerge later in the 2010s was beginning to materialize. The Obama Presidency at the time had to contend with a number of Republican candidates in order to win reelection. One of those candidates was Herman Cain, a Tea Party activist and businessman who would later pass away from COVID-19 in 2020.
True to the prevailing orthodoxies of the pre-Trump Republicans, at a time when the Tea Party movement was still during its peak, Cain ran his presidential campaign on a peculiar proposal that may or may not have been inspired by the taxation system of SimCity 4. The name of the proposal was called “Tax Plan 999.” It entailed an ambitious simplification of the Federal Government’s taxation system, where all Federal Taxes would be consolidated under three Federal Taxes levied at 9%. Those three were the Personal Income Tax, Corporate Tax, and a “Federal Sales Tax.” Cain reportedly settled on referring to the proposal as the “‘9-9-9 Plan’” after rejecting the alternate title of the “‘Optimal Tax.’” To understand it and its implications, I must direct the Reader’s attention to the US Federal-State Taxation System as it currently exists, instead of what it is capable of becoming in The Work-Standard (3rd Ed.).
In theory, the US Federal-State Taxation System is meant to be modeled after the principles of American Federalism. The Federal, State, and Municipal Governments levy their own separate taxes in order to obtain much of their funding. While State and Municipal Governments can expect to receive funding from the Federal Government vis-à-vis Congress, the Federal Government itself has had to impose other taxes in order to finance the various big-ticket programs. There is the Payroll Tax, which is levied to finance Medicare and Social Security, and then there is the Capital Gains Tax on any and all issuances of LCFIs (Liberal Capitalist Financial Instruments). For those curious about the latter, the current rate at the time of this writing is 24%, which means that approximately a quarter of Kapital earned from LCFIs go to the Federal Government on a quarterly basis. I was rather fond of this fact after experimenting with the Capital Gains Tax myself.
What Tax Plan 999 proposed was the elimination of taxes that did not come from the incomes of taxpayers, the profits of privatized commercial firms, and the transactional sales of everyday goods and services. It went hand-in-glove over other ideas that were begin entertained by the Tea Party at the time such as the privatization of Social Security and the nixing of Medicare and Medicaid programs in response to the passing of the Affordable Care Act. Only the Tea Party could have considered such ideas because, even today, it is still politically unpopular for anyone in the Democratic-Republican Party to abolish Medicare, Medicaid and Social Security. The privatization of those Federal programs would be tantamount to a political suicide, something that even the Trump Presidency learned to understand after the Obama Presidency. But in a time before the Trump Presidency and before Populism became as big as it would later become in America, doubling down on what worked since the Reagan Revolution of the 1980s seemed like the most appropriate approach for the Republicans.
This brings us to an important question that was raised at the time and will never be given a proper resolution. Was Tax Plan 999 inspired by the taxation system of SimCity 4?
It has been known for years that the SimCity series has been cited as the source of inspiration of an entire generation of city planners and others involved in the affairs of local governance. As noted by a 2019 article from the LA Times:
“Along the way, the games have introduced millions of players to the joys and frustrations of zoning, street grids and infrastructure funding — and influenced a generation of people who plan cities for a living. For many urban and transit planners, architects, government officials and activists, SimCity was their first taste of running a city. It was the first time they realized that neighborhoods, towns and cities were things that were planned, and that it was someone’s job to decide where streets, schools, bus stops and stores were supposed to go.”
The game’s premise and mechanics are fixated on running cities connected to each other within a geographical region as opposed to an entire nation or world order. This makes a taxation system easier to not only implement on the developer’s part, but also easy to internalize for the player. A 2011 Huffington Post article, reporting on the 2012 Presidential Election race, arrived at that same conclusion:
Kip Katsarelis, a senior producer for Maxis, the company that created the SimCity series, was excited that politicians may be looking to video games for ideas.
“We encourage politicians to continue to look to innovative games like SimCity for inspiration for social and economic change,” said Katsarelis. “While we at Maxis and Electronic Arts do not endorse any political candidates or their platforms, it’s interesting to see GOP candidate Herman Cain propose a simplified tax system like one we designed for the video game SimCity 4.”
Adopting such a simple tax structure, Katsarelis said, would allow fantasy political leaders to focus their energy on infrastructure and national security. “Our game design team thought that an easy to understand taxation system would allow players to focus on building their cities and have fun thwarting giant lizard attacks, rather than be buried by overly complex financial systems.”
When asked about similarities between Cain’s plan and SimCity’s default tax rates, Cain campaign spokesman JD Gordon replied, “Well, we all like 9-9-9.”
That same article cited the person who came up with Tax Plan 999:
Rich Lowrie, the Ohio Wells Fargo employee who is the brains behind Cain’s plan, did not return a request for comment regarding whether he is a fan of SimCity and looked to the game for inspiration.
A receptionist at Lowrie’s Wells Fargo office said she doubted his idea came from SimCity. “Probably not,” she told The Huffington Post. “I don’t think he’s much of a game person.”
What has me perplexed about Tax Plan 999 is why specifically 9%? Would a tax rate of 9% make a huge difference compared to something like 10%, 15% or 20%? Because Tax Plan 999 insisted on setting its taxation rates to 9%, the SimCity analogy stuck. Basically, I am convinced that Tax Plan 999 was in some respects influenced by SimCity insofar as the design philosophy behind the SimCity series is rooted in a 1960s understanding of city planning and budgeting. Even more interesting is that the book which Cain had used to popularize Tax Plan 999, 9–9–9: An Army of Davids, also had a 1960s understanding of US finance. In fact, there is a notable portion of that book where Cain went out of his way to advocate for a return to the Gold Standard, although there is no indication as to whether this would also entail the resurrection of the Bretton Woods System.
We will never know the answer as to the origins or influences behind Tax Plan 999. It is an unusual footnote in the history of the Democratic-Republican Party as it was the byproduct of an earlier point in the Republicans’ historical development. The concepts it outlined are only practical in an outmoded world where Cryptocurrency did not exist and the US Dollar was backed by Gold. Whatever support it would have garnered after the 2012 Presidential Election faded due to the rise of the Trump Presidency in the subsequent 2016 Presidential Election.
Categories: Economic History
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