MR. CAIN: We replace capital gains tax. We replace the payroll tax. We replace corporate income tax, replace personal income tax, and replace the death tax. It is a replacement tax structure.
MR. GREGORY: But where do state taxes go? You're saying they're going to be repealed?
MR. CAIN: If you--with the current structure, you have state taxes, right? So with this new structure, you're still going to have taxes--state taxes. That is muddying the water.
MR. GREGORY: How so?
MR. CAIN: Because today, under the current tax code, state taxes are there if they have it. If they don't have a state taxes, they don't have it. It has nothing to do with this replacement structure for the federal tax code.
MR. GREGORY: But that doesn't make any sense to me. If I'm already paying state taxes, and I have a new Cain administration national sales tax, I've got more state taxes.
MR. CAIN: No you don't.
If Sarah Palin was as dense as David Gregory, it would be all over the news.