Cain: 'Darts and Arrows Never Felt So Good'

This is a rush transcript from "On the Record," October 19, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: And now to the fierce race for the Republican presidential nomination. We just spoke to Mr. Herman Cain.


VAN SUSTEREN: Mr. Cain, nice to see you, sir.


VAN SUSTEREN: Well, now that you're the frontrunner in so many polls, you have a little bit of a target on your back, and we saw that last night. Many of your colleagues on the stage were -- they're showing -- they were throwing darts at you on "9-9-9."

CAIN: Greta, darts and arrows never felt so good. The fact that six of the candidates that were up there, which meant all of them, were throwing darts at me, it's simply highlighted the fact, number one, they don't have a plan that anybody can get excited about. And number two, their only comeback is, Let's go after Herman and try to discredit his plan. Let's try to scare people.

But it didn't work. The American people instinctively know that my plan is much better than what we have today. This is why they're excited about it. So I know I'm going to continue to get attacked. And some of the accusations that they made were just flat-out wrong, and we are going to document those.

VAN SUSTEREN: All right, so that I understand -- I'm trying to dig into this -- you know, educate me. Now, I understand you can't -- you can't sort of pick and choose. You've got to look at it as a package deal, "9-9-9." You can't just simply say, you know, unemployment -- or I mean, sales tax, 9 percent. You've got to look at the whole package, right?

CAIN: Right. Correct.

VAN SUSTEREN: OK. All right, now -- can you do this, though -- I'm trying to understand. I looked at some tax brackets. And if you are in the 15 percent tax bracket, under the 9-9-9, your taxes would go down, your income taxes, to -- to -- by 6 percent since they go down to 9, right?

CAIN: Correct. Now, remember, we replace the payroll tax, which is 15.3 percent for everybody. So there's a big pickup right there on that second line.

VAN SUSTEREN: So do you add that second 9 -- that 6 percent savings on my tax bracket going down from 15 to 9 -- what do I do about this payroll tax? I mean, where do I -- where does that fit into this?

CAIN: You don't pay any payroll tax.

VAN SUSTEREN: All right, so that...

CAIN: The payroll tax goes away.

VAN SUSTEREN: All right. OK. So I'm not paying that tax. Now, I'm going to be paying...

CAIN: Correct.

VAN SUSTEREN: I'm going to be paying a sales tax of 9 percent, which I wasn't paying before. So if I take that 6 percent savings on my income tax and put it against the sales tax I'm now paying, I'm now behind 3 percent, right? I'm paying 3 percent more, or is that not the right way to look at it?

CAIN: It's not the right way to look at it because on the sales tax, you only pay sales tax on new goods, not used goods. So it depends upon your purchase behavior.

Secondly, we believe that the price of goods are going to go down such that, in essence, you're not going to be paying more. That's the toughest part that people are having trouble with because when businesses subtract purchases in that first 9, we are taking out embedded taxes. So that loaf of bread that has the farmer's taxes in it, the miller, the baker, the truck driver and the grocery store, those five taxes are embedded and invisible. We taking them and replacing it with one visible tax of 9 percent, but you get a little help from your income tax reduction.

VAN SUSTEREN: All right. Now, in terms of these new goods, just so that I understand it, if I go out and buy a used car instead of a new car, that's a new car to me, but it's a used car. Would that, for instance, be covered by the sales tax?

CAIN: If it is a used car, no matter who buys it, you don't pay taxes because it was paid the first time. Things only get taxed once. That's the beauty of it.

VAN SUSTEREN: All right. Now, in terms of this whole -- this whole tax -- I mean, you make some assumptions. One is that prices are going to go down, and that's because these different layers of taxes that have been embedded are no longer in existence, is that right?

CAIN: That is correct. In addition to taking out these embedded taxes, remember that the top corporate rate right now is 35 percent, even though many businesses will have an effective tax rate probably somewhere between 20 and 25 percent.

So they're going to go from a 25 percent effective tax rate all the way down to 9 percent, which is going to give them a lot of leeway to pull (ph) that out. When a company is paying a top rate of 35 percent on its top marginal rate, Greta, they're passing it on to the consumer. So this is another way that those embedded taxes will come down because businesses don't have to collect them from the consumers and then pay Uncle Sam.

VAN SUSTEREN: All right, Senator Santorum said last night, and of course caught my attention -- I'm curious what your response is to it. He said that taxes would go up for 84 percent of the nation's households. Is he wrong, or is he looking at it a different way?

CAIN: That study came out by a very liberal organization -- I can't recall the name -- yesterday just before the debate. That study should be ignored. They are notorious for taking anything that comes from a conservative point of view, change the assumptions and put out that kind of information.

We have shared and are willing to share our analysis through fiscal associates to anybody who wants to go through our analysis with our assumptions. That result, quite frankly, Greta, is just flat-out wrong. Ignore that report. And we've got our analysis that we're willing to share with people.

VAN SUSTEREN: All right, I'm sure we'll have a lot more time to discuss it. Taxes are little bit complicated, and I need to, you know, learn a little more and question you a little bit more about it as time goes on, so I hope you'll bear with me.

So I'm going to switch now to another topic. I want you to clarify the electric fence. Where do you stand on this electric fence and your comment? I just want to sort of straighten this out and figure out, you know, where you are on this.

CAIN: When I made the statement about the electric fence, I was at a rally and I did it more in jest. Here's my real answer and real solution to this whole problem. We must secure the border for real. And it would involve part of it being a fence, part of it being technology and part of it being boots on the ground because there are some aspects of that border we need to have soldiers there so they can protect people.

The American people are tired of our citizens being threatened and killed and also our border agents being. Secondly, we must promote the existing path to citizenship. We just need to clean up the bureaucracy. Thirdly, enforce the laws that are already there, the immigration laws.

And now, here's one of the bold, more radical ideas, according to my contenders. Empower the states to do what the federal government is not doing. This is how we get our hands around this problem, by making sure that we work on all four problems.

VAN SUSTEREN: All right, last night, it was sort of interesting from a -- watching Governor Perry and Governor Romney. It looked like they were almost going to come to blows at some point. I'm curious, being up on stage, on the podium, what was that like for you, I mean, as you're watching sort of the battle between those two?

CAIN: There were several thoughts going through my mind. First, did I need to walk around and get between them and say, Let's just get along? But I didn't.

The other thing was, I'm standing there, thinking to myself Greta, what kind of message is this sending to the American public? These debates are supposed to help educate the public on not just our individual views but all of the conservative Republican views. And I happen to think that they got too much into that, which turned out to be, in my opinion, a negative.

So that was what was going through my mind. And I'm thinking to myself, I certainly hope that you all get through this bickering so we can get on to serious business and answer some serious questions with some serious solutions.

VAN SUSTEREN: You know, I'm somewhat sympathetic to everybody involved in this -- obviously, the media, because we want to get everybody's ideas out and give everybody, you know, a chance to respond. On the other hand, it's a little bit of an absurdity of asking important questions and giving you 60 seconds to respond. I mean, you know, sort it's sort of -- it's a -- it's a sort of a tough situation.

I'm sort of thinking, What's -- you know, how can we improve these debates so that you guys can get your ideas out better and we can find out better about what you think and even test you on many of your ideas?

CAIN: You make a very good point. Let's use the example of when all six of them came after me last night. Now, first of all, I expected it. But think about this. Nearly everybody who had an arrow to shoot at me, I only had 30 seconds to respond. And most of their accusations, I couldn't respond in 30 seconds.

And so in a case like that, I think that the person being attacked ought to be given more time to try to explain themselves. Somehow -- I don't know how that should be changed, but sometimes, some questions cannot be answered in 30 seconds in the form of a rebuttal.

VAN SUSTEREN: All right, well, there's a good poll for you out in Iowa. It shows you doing pretty well. I'm curious, though, what your plan is, now that we've got caucus dates set for early January. What's your game plan?

CAIN: Our game plan is go to Iowa, go to Iowa, go to Iowa. Go to New Hampshire, go to New Hampshire. In fact, I'm going to be in Iowa this Saturday for a number of events. We're making plans to go back to New Hampshire, South Carolina, Florida.

We are going to spend a lot of time, Greta, on all of the early states, but we're also not going to ignore some of the other states downstream. With this whole primary and caucus process being turned upside-down and still trying to figure out what one state's going to do, we just don't want to leave anything on the table. But Iowa is going to be a focus, New Hampshire, South Carolina, as well as a lot of other states like Nevada.

VAN SUSTEREN: All right, while you're watching the campaign, are you following what -- what the latest -- you following President Obama day to day, or are you too busy?

CAIN: No, I've been keeping a track on it because he's still trying to sell his so-called jobs plan. It's not a jobs plan. It's another spending plan with different rhetoric versus the trillion dollars that was spent before. So the president is out trying to sell that plan. Other than that, I haven't been too aware of some of the things that he's doing, other than a bus tour to try to sell it to the American people.

VAN SUSTEREN: Mr. Cain, thank you. I hope you'll come back. As I tell everybody, it's going to be -- I think it's going to be a long race. Thank you, sir.

CAIN: Thank you, Greta. I always enjoy it.