ping
“can the plan be changed to a national sales tax on corporations only?”
Why would you want that?
VAT's are bad.
Herman Cain's plan is a tax on retail sale. Retail only.
It's OK to dislike a 9% retail sales tax, but it is not a VAT.
Also: about 50% of the population pays no federal tax at all. That's not fair. With a retail sales tax, the poor will start to contribute, and they may stop clamoring for the government to spend more, and more, and more.
Businesses don't pay taxes, you do.
A VAT is added at every stage of production, as a percentage of the "value added" (selling price minus costs) at each stage, and is hidden in the price. A sales tax is only applied when the consumer finally buys the product, and is visible as an add-on to the price.
People in higher brackets - 25% and 35% would realize a bigger drop in tax rates, but are likely to buy new cars and other items that would be taxed at retail. Lower income brackets buy more used goods and would be not paying tax on such.
I suppose luxury items like TV cable and internet service would be taxed at 9%, but heard nothing about utilities or services like dental work.
One question among many I have is if the corporate tax is reduced or done away, will employees get a pay raise? Don’t bet on it.
What we have now is already a vat tax. Goods get taxed at every level before they reach the consumer and then the consumer is taxed on the end product. Almost always the intermediate taxes by middle men get added to the price of the product so that the consumer is paying several taxes on an item. The 9-9-9 plan eliminates the intermediate taxes. The only taxes on goods are the 9% sales tax to the consumer. The hidden taxes are gone. Prices should be lower on end products when market pressures prevail. I see nothing bad and only good with the 9-9-9 plan.
Just sayin, ya know, history repeats, an what not.
It’s not the sales tax that is the VAT. It is the corporate tax that is essentially a VAT. As opposed to the current corporate tax that is based on profits, the 9-9-9 plan taxes “gross income less all purchases from other US located businesses, all capital investment, and net exports.” That’s a straightforward value-added tax: a tax on business receipts less inputs.
In the long term prices should come down as competition sets in and/or wages may increase a little. In the short term you’ll have 9% less money to spend and the deficit will increase. Expect rioting by the poor.
The tax is not 27% total. It is 18% since money is either income or business revenue, never both. The whole point of the system is that money is never taxed as both. So the total tax is always 9% + 9%.
If you look back at Federal Revenue since the inception of the income tax, it has always been between 18% and 20%. The Cain plan would net 18%.