Aside from the fact that Mr. Cain’s 9-9-9 tax plan creates a national sales tax that stands alongside a personal and business income tax and therefore contains the perfect ingredients for a perfect IRS storm, there remains yet another facet of the plan that I, as a veteran of the architectural coating manufacturing industry, find very troubling: according to Mr. Cain’s 9-9-9 plan, U.S. manufacturers who purchase their raw materials and components from U.S. sources will be able to deduct them as part of the cost of doing business, while those purchase raw materials and components from foreign sources will not. (Go here and fast forward to the 7:50 mark).
At first blush this seems eminently reasonable until one considers that there are certain raw materials (and, perhaps, components) that simply cannot be sourced in the United States. Among these is seedlac – the raw component of shellac in all its varied forms.
Just about everyone has heard of shellac but very few know what it really is: a resin secreted by the Lac Beetle (Laccifer lacca) on the branches of trees in India and southeast Asia as a cocoon to protect the next generation of insects. After the new brood hatches and leaves the “nest,” the natives harvest the resin and process it for shipment around the world. The primary consumer of this natural resin is the United States.
Here the seedlac is refined for use as an architectural coating. In its clear form, shellac makes an excellent sealer and finish for wood furniture or floors. In pigmented form, it is perhaps the single best stain and odor sealer in existence.
Seedlac is also refined for use as edible glaze. Ever wonder why the chocolate coating on Junior Mints, Raisinets and other confections is so shiny or why certain fruits and vegetables look so appetizing? Thank shellac.
The refined resin – which is impervious to acid but dissolves readily in alkali – is also used to coat time-release pills and capsules: they are unaffected by stomach acid, but readily dissolve in the upper intestinal tract, where the body secretes alkalinity to neutralize the stomach acid, causing the shellac coating to dissolve and release its goodness to be absorbed by the body.
To my knowledge, there does not exist today a synthetic resin that possesses all the useful properties of shellac.
Unfortunately, seedlac is hellishly expensive because it is available only from India or southeast Asia and the availability depends largely upon the mercy of nature and the existence of farms that have not yet succumbed to suburban expansion. Were we to adopt Mr. Cain’s 9-9-9 plan in its entirety, it would spell the inevitable demise of the shellac industry in the United States and the disappearance from commerce of an irreplaceable resin.
And this is just shellac: has Mr. Cain had a chance to chat about his plan with the folks who manufacture Gibson guitars?
I’m sorry, Mr. Cain, but your 9-9-9 plan needs some major tweaking before it passes muster on Bulldog’s porch.