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I have concerns about his 999 plan. Where is he going to cut taxes enough to compensate for a 9% federal sales tax...on top of your current state or local sales tax. My current tax rate, with deductions, is about 11%. So while I would gain a little on the income tax I would immediately pay much more on the 9% federal tax. Am I missing something?

Considerably more than 18% of the amount you spend to purchase goods or services will actually be taxes going to the federal government. Imagine a basic transaction where you purchase something directly from the manufacturer.
Your income is taxed at 9%.
You pay another 9% national sales tax on the price you pay for goods.
The price you pay for the goods is comprised of the actual manufacturing cost, plus profit, plus 9% in corporate income tax.
Therefore a product the manufacturer would sell for $100 must have $9 in corporate income tax added to it; so it will be priced at $109.
When you buy it for $109 another $9.81 will be added as a 9% national sales tax so it will cost you $118.81.
You have already paid a 9% income tax of $11.75 on the $118.81 you will spend to purchase the product.
So, in this scenario, the total taxes to the government are:

$9.00 corporate income tax of 9% paid by the manufacturer

$9.81 national sales tax of 9%

$11.75 income tax of 9%

$30.56 = TOTAL TAXES TO THE GOVERNMENT

This is a simplified transaction where you buy directly from the producer or manufacturer. Actually, in a more complex transaction the government would probably realize much more in taxes than the $30.56 because there would be other parties involved.
Usually the maufacturer sells to a distributor and the distributor sells to a retail outlet and the retailer sells the product to you.
In that case the manufacturer pays a 9% business tax, the distributor pays a 9% business tax and the retailer probably pays a 9% business tax also.

Hey folks,

Keep it coming. THIS IS THE KIND OF DISCUSSION AND EXCHANGE WE NEED TO HAVE — ABOUT IDEAS.

Wisecracks ( e.g Yes We Cain, Cain is Able, Beat Obama with a Cain ) are comic relief, but what we really need is to discuss the pros and cons of someone who actually HAS A PLAN ( That would be Herman ).

Now, if we can include a discussion of Herman’s CHILEAN MODEL for Reforming Social Security, this thread would be really worth it. It will EDUCATE people regarding what’s in it for them.

The problem I have with Rick Perry for instance is this — HE CORRECTLY DIAGNOSES THE PROBLEM ( i.e. Social Security is akin to a Ponzi Scheme ), but then he DOES NOT PROPOSE WHAT HIS SOLUTION TO THE PROBLEM IS.

No wonder he is on the decline!

$9.00 corporate income tax of 9% paid by the manufacturer $9.81 national sales tax of 9% $11.75 income tax of 9% $30.56 = TOTAL TAXES TO THE GOVERNMENT

And that is different from a 30%-50% income tax how?

Actually I would favor scraping the whole tax scheme we have now and going with a flat rate sales tax on everything because it would do away with the need for keeping personal information on every citizen and the entire control structure of the IRS. The problem with any tax is that congress will engage in social engineering by lowering taxes on favored items and raising tax on items they dislike.

Perhaps the fairest thing to do would be to divide the cost of government by the population and send a bill to each citizen. One for the state, one for the town and one for the feds. This would be the most transparent means of raising revenue as long as no one could manipulate anything.

“Usually the maufacturer sells to a distributor and the distributor sells to a retail outlet and the retailer sells the product to you.In that case the manufacturer pays a 9% business tax, the distributor pays a 9% business tax and the retailer probably pays a 9% business tax also. “

This is not an accurate representation of CAINs Plan. You are describing a VAT value added tax...that is completely different than what CAIN is proposing..

Cain’s 9% would only be taxed at the retail level...not along the distribution line.

Why are you including 9% income tax? That’s personal tax and you’ve already factored in corporate tax.

Also the corporate tax rate is higher than 9% now. You don’t think they are already passing those rates on?

Prices will drop because corporate costs of compliance will be drastically reduced and the corporate income tax will be drastically reduced as well.

All taxpayers except those that don’t presently pay anything now will also have far more money in their pockets to spend, save and invest.

I think you’re misunderstanding the plan.

But just for kicks, let’s use your numbers for what’s going on now.

Right now an average corporate tax rate is 35%. So that $100.00 item costs me $135.00.

Even though your inclusion of the personal tax makes no sense, let’s include it here. Our tax bracket is 33% but our marginal rate is closer to 20% which would probably be a good average for all taxpayers except those who end up not paying at all, who we all agree need to have “skin in the game”. So that’s another $27.00 on the $135.00 I spent for the product, or $162.00.

There is currently no national sales tax so that’s not a factor but $62.00 of that $100.00 is going to the Feds right now.

So yeah, I think I’d rather $30.56 (or more properly, $18.81 since the $100.00 is taxed whether I spend it or not) go to the Feds than $62.00 or even $35.00.

Finally, your assessment of the 9% being charged all the way is probably accurate but again, current corporate taxes are MUCH higher and are being passed on right now at every stage of the manufacturing/wholesale/retail process.