Posted on 10/24/2011 4:24:25 PM PDT by NaturalBornConservative
“I’ve been in tax law for 30 years”.I stopped reading right there.
On which planet do you work?
You know, I've seen the exact same sentence posted towards the supporters of every single candidate.
You guys should really be more original...
When the name-calling starts in the headline, not much reason to read the article.
First, your presentation is misleading.
Yes it is true that Cain’s plan imposes a 9% tax on wages.
But we NOW have a 15.3% tax on wages (ignoring the temporary stimulus reduction). (You show ONLY the employer’s portion which shows up in his income statement)
The 15.3% (combined employee & employer share) must be paid to the government REGARDLESS of whether a business is profitable.
Similarly, because the 9% is not deductible all or most of this must be paid regardless of whether the business is profitable (unless a business is so unprofitable that there is still a loss even after adding back wages).
So we have a REDUCTION in taxes on wages under the Cain plan from 15.3% to 9% (or less).
You are comparing the 9% tax on wages under Cain’s plan with the corporate income tax. But it is more meaningful conceptually to compare it with the 15.3% tax on wages we have now, which goes away, resulting in a TAX REDUCTION ON WAGES.
By ignoring the share the employee must pay of the SS/Medicare tax, which goes away under the Cain plan, your presentation is misleading.
Second, by shifting part of the federal tax burden from an income tax to a sales tax, Cain’s plan makes domestic production more competitive.
As it stands now, domestic producers pay the burden of paying income tax but foreign producers do not.
By shifting this to a sales tax, foreign goods bear part of the tax burden making the playing field a little more level for domestic production and improving the environment for JOB CREATION in the United States.
You seem to be under the impression the main point of 9-9-9 is to reduce some people’s taxes or to save compliance costs. The MAIN point of 9-9-9 is domestic JOB CREATION. It is intended to be revenue neutral, so some people’s taxes will go down, others go up, but the most important goal is to change the environment to encourage domestic production here in the USA.
And third, the next step after 9-9-9 is to move to only a sales tax, which DOES eliminate the calculation and reporting of income taxes, saving us the huge compliance costs businesses and individuals have to pay under the current code.
The whole 999 thing is such a sad bit of marketing, and it does not do justice to the gravity of the issue.
But the good news is that Godfathers Pizza is selling medium sized pizzas with 3 toppings for only $9.99, in honor of Herman’s run for the presidency!!
Newt-Bachman all the way baby!!
The whole 999 thing is such a sad bit of marketing, and it does not do justice to the gravity of the issue.
But the good news is that Godfathers Pizza is selling medium sized pizzas with 3 toppings for only $9.99, in honor of Herman’s run for the presidency!!
Newt-Bachman all the way baby!!
Geitner found it too complicated to do.
Pray for America
This plan is a step towards complete elimination of the IRS. You can’t just eliminate it overnight. It’s not gonna happen. We have got to get our financial house in order first or else our society will completely collapse.
I don’t think it’s misleading at all. If anything it’s a comprehensive critique of the entire policy. Under the 999-Plan the employer pays a 9% tax on wages, and the employee pays another 9% tax on wages, so let’s see, that’s 18.0% versus the current 15.3%. Then the employer pays a 9% national sales tax on purchases, and the employee also pays a 9% national sales tax on purchases. Then by excuding deductions for expenses like mortgage interest, state taxes, etc... the proposal effectively places a 9% surcharge on the same, thus raising costs.
You have to separate business payroll taxes on wages from the individuals taxes. That’s because, currently, businesses pay 6.2% on only the first $108,600 of an employee’s wages, and 1.45% on an unlimited amount. Meanwhile, although individuals don’t get a deduction for payroll taxes, they only pay 6.2% of the first $108,600 as well. But under the 999-Plan a business will pay a 9% tax on wages without limit to the amount paid to each individual. Also since payroll taxes are deductible for income tax purposes, businesses really don’t even pay 7.65%. [For example, if a company is in a 35% tax bracket and pays $100,000 in payroll taxes, because payroll taxes are deductible, it really only effectively pays $65,000 (100,000 - 35,000).]
What’s most profound is that under our current system, those FICA taxes that you mention (15.3%)are currently being spent in their entiretly to cover the current burden of social security benefits, and only a fraction of Medicare benefits. Social security has run at a deficit for the last two fiscal years, so that both programs have had to dip into the general fund. So I ask you, where will the money come from to cover the government’s present burden of social security and Medicare benefits? Won’t most of the money collected under the 999-Plan simply be spent on these two programs alone?
If just in my little one-man company example, the businesses taxes went up to a degree that it suffered a loss, then how does that lead to job creation? How does it lead to a decline in prices? My presentation includes all of the factors you mentioned and more, and if you stop and think about it, and study it carefully, you will see that.
And if you made it to the end of this piece which I know is rather long (too long), then what expenses will be allowed for purposes of State income taxes. The 999-Plan will cause the 43 States that have an income tax to completely rewrite their laws. That ought to be a walk in the park, eh? I’m not going to sit on my hands while the entire nation is stuck on figuring out how to make this work. We don’t even need this. If the goal is to get to only having a national sales tax, then why not just do that from “J Street” rather than screw around with this madness?
The 999-Plan simply put, “won’t work”. It’s just not workable no matter how you spin it. You either need to be in business or work with business finances to understand it, but then again, that’s what I do.
I happen to like Mr. Cain, and didn’t call him by any name.
FYI, the word “Sham” means ‘anything that is not what it purports or appears to be.’
“9-0-9” - You got that right. Empowerment zones become the first special interest, but I’m sure more will follow as the complaints begin to roll in. I don’t see prices going down under this plan because taxes really don’t ever decrease, so there are no savings.
Once you said it, it made total sense.....a great spoof!
I wouldn’t mind either, but the plan fails to address the near $15 trillion national debt. If it doesn’t solve the debt or ongoing budget deficit problems, then what exactly is the point?
[The problem with a flat tax is that it doesn’t address the issue of everyone having a stake in the country. People receiving government aid in lieu of working still will be sponging without contributing. That’s why these kinds of taxes are called “fair”]
Interesting take. I agree, it’s “fair” for those who are productive, but a flat tax won’t necessarily motivate able bodied moochers. It also favors those who are more productive, but no one is under obligation to help those are not able bodied. We should tweek what we have, no one that I know really ever asked for this 18-0-9 plan.
Go for it! If Cain is able to overcome a general election, and if his proposal is able to make it through both houses of Congress, then the Nation will need even more accountants just to track our demise.
[It is hard for people to “get” how 23% consumption tax can work, but a 9% consumption tax will allow them to see how it can work.]
So you’re saying that Americans are not capable of studying how the VAT Tax works in Europe; that we have be gradually spoonfed towards what I would consider to be another step towards full-blown Socialism. No thanks.
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm
[But it wouldn’t hurt to simplify it — there’s way too many things that have been thrown into it because politicians are involved. But throwing out the whole thing and replacing it with something new isn’t necessary to cure that problem.]
I agree. And I did say that too, but if I had just said that, I wouldn’t feel like I had given the 999-Plan a fair and thorough review.
Gliese 581g
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