Two Calculators to Determine How Much You'll Pay Under Herman Cain's 9-9-9 Plan

Dear FReepers,

I have discovered two websites that provide that tools for you to determine how much you'll save or pay if the Herman Cain 9-9-9 Tax plan were to be implemented.

1) INCOME TAX CALCULATOR

Here's the Tax Calculator Comparing the INCOME TAX you would pay using the current tax code against the 9-9-9 plan. You must have Microsoft Excel on your computer:

CLICK HERE

2) SALES TAX CALCULATOR

Here's how much you pay for the price of goods if the NATIONAL SALES TAX were implemented ( this takes into account your state's sales tax):

CLICK HERE

>>> I believe the cost of certain services and products will fall in price if the 9-9-9 plans comes to be. Isn’t it logical to think if the corporate income tax drops from 35% to 9% then businesses will be able to roll prices back?

From the Laffer article in the WSJ:

“Thus, Mr. Cain’s 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax.”

It would appear that about 38% of the revenue from the 9-9-9 plan would be derived from the corporate tax. Looking at the current Monthly Treasury reports, corporate income tax accounts for about 8% of revenues under the current plan. Assigining half the payroll tax receipts brings the corporate share to 26% of revenue. I’m not sure how they will be able to roll back prices.

“The best way to make certain the government doesn’t increase taxes, is to make certain everyone has to pay the same percentage. It is easy for Congress to play politics, grow government, and conduct social engineering when they can pit one group of Americans against another. It is more difficult when tax increases hurt everyone. We need to get rid of this corrupt system.”

And the best way to make sure everyone pays the same percentage is to go to a flat tax rate for everyone. let's just say 8%. So if you make just $100, you pay $8. If you make 10 mil you pay 800k.

Given such a system, how many IRS agents would we need then. Obviously very few. Don't believe the fair tax nonsense that says it will eliminate the IRS, it won't. It can't. The feds would still need many many IRS agents to make sure that huge sales tax is being paid on everything. Nothing would create more incentive and opportunity to cheat on taxes than a huge sales tax on consumption. You would have goods going out the back door and ending up on eBay all over the place.

I have read some of the fair tax plan and I'm hear to tell ya it's a bunch of bunk clearly conceived by someone that does not have a clue how the real world works when it comes to taxes. Supporting this nonsense is a mistake.

“I have read some of the fair tax plan and I’m hear to tell ya it’s a bunch of bunk clearly conceived by someone that does not have a clue how the real world works when it comes to taxes. Supporting this nonsense is a mistake.”

You should read more of it. ...Like I said, I’ve leaned towards a flat tax over a national sales tax, but Cain’s ideas are sound. The problem with Forbe’s plan that Perry has decided to take up is that it contains built in deductions and rebates that amount to redistribution of wealth, no different than any other tax rebate scheme that gives money to people who didn’t pay it in. There is also no reason a flat tax can’t be manipulated into another regressive tax structure, and a big IRS reenters the picture.

I agree. I’m not jumping on board with Perry/Forbes just yet.

The only way a flat tax solves the problem is if it remains just that, flat. That is to say NO deductions for any reason. As soon as the concept of deductions enters into it then guess what, the system is no longer flat.

I agree with Gingrich in that the positive part of Cains plan is the promotion of the idea that big changes must be made. It’s clear however that any kind of national sales tax is simply unworkable and unsellable to the American people. The Fair Tax is a concept that only works in text books and the minds of economist’s but in the real world it’s an unworkable disaster.

Lets see the details of the Perry/Forbes plan.

Assigining half the payroll tax receipts brings the corporate share to 26% of revenue.

I'm no Art Laffer, who I admire, but then the 9-9-9 plan really is a 9-9-26 plan. If that's the case Mr. Cain has been esposing that there is no baked in taxes in products, but there's only a single tax that the consumer pays only on new goods.

I really can't see how a manufacturer who buys raw materials for what ever he manufactures is exempt from paying those taxes. If Joe the Baker buys nuts from the store to make a cake, he pays 9% tax on those nuts. When he's done with his cake the patron at the bakery buys the cake and pays 9% on the cake. He can't exclude the price of the nuts in the cake and say the tax is already paid.

I'm starting to see that the Herman Cain tax plan which sounds simple really isn't and if that's the case it's going to go down in flames.

>>>I really can't see how a manufacturer who buys raw materials for what ever he manufactures is exempt from paying those taxes. Actually, companies that use a product as an input in creating another product do not pay sales tax on that input. For example, firms can apply for a sales tax exemption certificate from the state they operate in that they can provide to their vendors who in turn do not charge sales tax. A similar process could happen at the federal level.

The problem with the baked in taxes argument is in how the corporate tax is charged. Currently it is 35% of profits. The 9-9-9 plan makes it 9% of gross receipts less investment expenses. Labor is no longer a deductible expense under this plan. So firms go from paying the 7.5% payroll share on the first $106,000 of an employee's imcome to paying 9% on whatever the employee makes with no limit.

>>>I really can't see how a manufacturer who buys raw materials for what ever he manufactures is exempt from paying those taxes.

Actually, companies that use a product as an input in creating another product do not pay sales tax on that input. For example, firms can apply for a sales tax exemption certificate from the state they operate in that they can provide to their vendors who in turn do not charge sales tax. A similar process could happen at the federal level.

The problem with the baked in taxes argument is in how the corporate tax is charged. Currently it is 35% of profits. The 9-9-9 plan makes it 9% of gross receipts less investment expenses. Labor is no longer a deductible expense under this plan. So firms go from paying the 7.5% payroll share on the first $106,000 of an employee's imcome to paying 9% on whatever the employee makes with no limit.

Here is how an accountant explains the difference between Married Filing Jointly and Head of Household...

1) Married Filing Jointly

You can choose Married Filing Jointly as your filing status if you’re married and both you and your spouse agree to file a joint return.

Both of you must include all of your income, exemptions, and deductions on your joint return.

Except in special cases, you’re both responsible for any tax due. For instance, you could be held responsible for all the tax due even if your spouse earned all the income.

So, if your wife earns no income, you can STILL file under this category if you find tax benefits doing this.

2) Head of Household

If you qualify to file as Head of Household, your tax rate will usually be lower than the rates for either Single or Married Filing Separately.

You must meet all of the following requirements:

•You’re unmarried or considered unmarried on the last day of the tax year. For the purpose of qualifying for this filing status, you’re considered unmarried if you didn’t live with your spouse for the last six months of the year, except if your spouse was absent due to special

circumstances such as business, military duty, or illness.

•You paid more than half the cost of keeping up a home for the year.

•A qualifying person lives with you in the home for more than half the year (except for temporary absences, such as school). Exceptions: A dependent parent does not have to live with you.

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