This is a rush transcript from "Your World," April 28, 2011. This copy may not be in its final form and may be updated.
CONNELL MCSHANE, GUEST HOST: Potential GOP presidential candidate, meantime, Herman Cain, he says, if you want this economy moving, you have to start cutting taxes. And he joins us now by telephone.
But I will tell you, Herman, the problem with that is, we did to some extent. We at least extended the Bush tax cuts at the end of last year. It looked like it would give the economy a nice boost. Many argue that it did. And we still today have slow economic growth.
HERMAN CAIN, CEO, THE NEW VOICE: Connell, with all due respect, those weren’t real tax cuts. That was throwing chicken feed to the public -- chicken feed to the public.
If you are going to get serious about stimulating this economy, we have to provide direct stimulus, not more spending. That little small, incremental payroll tax holiday that was part of that extension of the tax rate, most people didn’t even feel it.
CAIN: Secondly, all they did when they extended the tax rate for two more years, as they were at those levels, you’ve extended the uncertainty. Here’s some director stimulus that we need to do.
We need to lower the top corporate tax rate from 35 percent to 25 percent, because we are the only country in the world that has not done this in the last 15 years. That does not make any sense. Secondly, lower personal income tax rates. Cutting taxes does work, does work. It just gets demagogued by the liberals. And the other thing is lower capital gains tax rates.
MCSHANE: OK. Let me ask you something, then. Say we do all of that. And a lot of those things, by the way, have been proposed by these bipartisan deficit commissions and everything else that’s come out over the last few months, many of these proposals that you are making.
Do we need to offset it by closing down loopholes or is it just tax cuts across the board, because then you get into the question of how do we afford this with all the deficits we’ve been running?
CAIN: Well, I’m a part of the school that believe that the tax cuts will pay for themselves if you cut them the right way and if you cut them enough, not just doing these little pittance cuts and then sit back and think this is going to stimulate the economy.
We have already seen that we cannot spend our way to prosperity. We’ve already seen that the popcorn programs like ‘Cash for Clunkers’, they do not work. And then when you impose on top of that new legislation like Obamacare that is also going to build a big bureaucracy and accentuate the growing national debt, taxes -- cutting taxes do work. You have to make them deep enough and you have to do them long enough.
Make -- taking this uncertainty off of the back of the American economy is one of the big things that we need to do with lower taxes.
MCSHANE: How worried are you about inflation? We were just talking with Jim a moment ago about prices of especially food and certainly gasoline going up. And it’s already hitting people, but -- and we have not even gotten to the summer yet. How big a problem will that be when gas prices may be -- spike even higher come summertime?
CAIN: I am very worried about inflation, Connell, for the following reasons.
As you -- as you just showed on the screen, food prices and those things that are impacted indirectly because of the increase in transportation costs, they’ve already gone up. Now, here is another very frightening thing. Since gas prices have doubled within the last two -- last two years of this administration, now the consumers have nowhere else to go in order to buy gas for their car to go back and forth to work or to take the kids to school, except to take it out of other discretionary areas.
CAIN: And so it’s a compounding effect, so I’m very worried about inflation, which makes it all the more important that we need direct stimulus.
Give every worker a raise with a real payroll tax holiday of 6.2 percent. And give every employer a break for a year of 6.2 percent. That will pay for itself, because the people will decide whether they want to spend it or whether they want to invest it, rather than having the government decide how that money’s going to be spent.
MCSHANE: All right, Herman Cain, good to talk to you again. Thanks for coming on with us today -- Herman Cain there on -- on the economy.
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