Posted on 09/30/2011 8:42:11 AM PDT by Cincinatus' Wife
....Of Mr. Cain's many ideas, the most well-known -- in part because of its clever sound-bite name -- is his 9-9-9 plan which aims to replace most current federal taxes (including income tax, death tax, payroll tax, capital gains taxes, and double-taxation of dividends) with a 9% flat tax for business income, a 9% flattax for individual income, and a 9% national salestax. The plan would eliminate almost all deductions.
While Mr. Cain's consistent results-oriented approach is admirable -- not least for its contrast with the other candidates -- voters should be wary of the 9-9-9 plan despite its initial appeal. In short, it is somewhere between folly and economic suicide to implement a national salestax, even at a modest rate, without simultaneously repealing the 16th Amendment to the Constitution (which permits a national income tax.)
There is in economics a relatively new concept known as Hauser's Law, named for its creator, economist Kurt Hauser of the Hoover Institution. Hauser's law posits that the federal government cannot take more than about 19.5% of national income through taxation and that soaking the rich (or those whom President Obama defines as rich) will not generate the tax revenue..........
• United Kingdom: 36.1% total taxes/GDP, with a VAT rate of 17.5 percent taking 6.8% of GDP. (The UK's VAT rate has since been raised to 20 percent.)
• Germany: 36.7%, with a 19 percent VAT taking 6.7% of GDP.
• France: 43.7% total taxes/GDP, with a 19.6 percent VAT taking 7.3% of GDP
In other words, governments of these countries which have national sales taxes take far more of the national wealth than we do in the United States. There are several European countries with even more punishing VAT and income taxes, with Denmark's government confiscating an astonishing 48.8 percent of national income.
(Excerpt) Read more at spectator.org ...
Doesn’t the government also subsidize vacations to the Canary Islands and such?
Perry and Romney (RINOs) make bad judgments.
IT IS PROVEN by their own history and faux pas.
Mr. Cain talks conservative, unlike the two RINOs.
Plan to save America: NO RINOs. NO MORE RINOs.
So how is the present system working? Not so good, is it...
We have to be open to new ideas....
There is no VAT in 9-9-9. Those who claim there is are knowingly lying to you.
Isn’t that the truth...he has less experience than Mittens...why put someone in as President as was done with the disaster in chief living in our WH and trust he’d know what to do. Perry has 11 years of governoring a state larger than most countries and is now the 13th largest economy in the world. Perry has a proven record on the economy and jobs. People have become brainless since they are either not being honest or are that brainless.
We're close to that already, at about 18%. [link] or google "GDP" and follow the graph shown.
The only way I will support ANY national consumption tax like the FairTax, is if the Sixteenth Amendment is repealed FIRST. Not “oh, we’ll repeal it later.” Not “we promise to keep the income tax down to 9%.” The ability for the Federal government to levy an income tax AT ALL *MUST* be removed from them FIRST before a consumption tax can be implemented. Otherwise we will end up, in very short order, with crushing income taxes AND a European-style double-digit VAT (because they will quickly turn a simple sales tax into a VAT).
}:-)4
Nope. That is ONLY a "proven record" of
unending RINO behavior.
Was not PerryCARE 1 and PerryCARE 2 not enuf?
What will be PerryCARE 3?
. Guard the Borders!! .... "Gard a sil?"
How is that different from Cain's tax? Wouldn't Cain's 9% tax be on every business in the 'food' chain - producer, wholesaler, and retailer?
A business tax is just a hidden sales tax. Cain's program translates to an 18% sales tax. What I like is the idea of eliminating all deductions, but only if it is written into the constitution.
We had a friend who worked for the government in Germany. He once described to me what their “taxes” covered and I was amazed. As I said, not that I agreed, but then I understood the higher tax rate.
On the other hand, we lived in the Cayman Islands for awhile, paid no income tax (paid US income tax on income over a certain level, but there’s a pretty large deduction if you’re out of the country), and yet paid hugh duties on everything we bought. We had healthcare on the island at a greatly reduced rate (compared to US) and we were expats...all children’s healthcare was free. It was paid for with taxes, just not income taxes.
The point of my post was, you just can’t compare what one nation pays in taxes, versus what another pays, because what those taxes pay for varies so greatly from country to country.
Oops, meant 16%.
Not much deviation though, depends on how you squint at the numbers. Upshot is we can’t squeeze much more tax revenue out of the economy no matter what: as the number approaches 19.5%, economic activity slows/adjusts to prevent getting there.
Elsewhere someone reported a 1% increase in tax revenue translates to a ~3% decrease in GDP.
Also it gets all the welfare recipients and illegals to pay their “fair share”.
Yes, it would be better to eliminate the business taxes completely. Unfortunately that is not going to be politically feasible right now. You need a bridge from one system to the other.
9-9-9 eliminates things like the double taxation on capital gains and income as well as massively reducing Congress's power to play political games with the tax code. It also eliminates business's corrupting the political system by lobbying for favorable treatment
NO 9-9-9 is not perfect. It is only completely better then the existing system
When considering a candidate, political experience (ability to compromise, exchange political favors, speak out of both sides of your mouth, and placate lobbyists) is not high on my list. Nor do I consider the ability to name the Prime Minister of Kyrgyzstan key to governing. All presidents have encountered situations that did not come up in party platforms or were asked about in debates. I want to know if they will be able to handle that situation in a manner I would consider successful. To me, the factors I look at are whether the person has executive experience and a track record of success in leadership positions; and, the core set of values. I like Governors because they have executive experience but would not rule out a person with business executive experience. In fact, given the current economic conditions which, I believe, are a direct result of excessive government (both spending and meddling in the free market) I would rather have a person who knows business and has created private sector jobs than a career politician who has risen through the political ranks to a Governor's position.
I thought Obama had minimal experience, which was legislative, so no real leadership skills. I thought his personal ideology was to hate common American people and trust the government and the elite who believed like him. When decisions needed to be made that had not been identified during the campaign, I believed he would make the wrong call every time. The only decision he has made that surprised me was the call to take Osama out. I think that one actually went against his instincts but was made for his own political favor. Otherwise, he has acted just as expected.
I believe Cain's core values are pro-America, pro-capitalism and socially conservative. When he gets the 3 AM I would trust him to make the right decision and have the ability to implement it.
“. The plan would eliminate almost all deductions. “
This line alone tells you everything you need to understand about this writer.
He believes that your money belongs to the Washington instead of the people as Herman Cain believes. To this the current communist Progressive tax is better since it allows Washington to ONLY give you back 25 cents for SOME of your tax dollars. After all that money belongs to Washington and not to the person who earned their money.
The 9,9,9 plan is very easy and would eliminate many lobbyist. This is why the writer is against this plan.
So with Cain's plan or any of the similar flat taxes proposed by others, my taxes remain constant, and there will be no darker days on the horizon to look forward too.
Any business that has more than about 5% of the gross revenue going to overhead, things that just mind the farm, is headed for broke in my view. You can’t run a business with 20% of the revenue going to stuff that does not produce things. In the case of a government you could argue that the military, highways and such produce things but welfare DOES NOT produce anything but more welfare and more babies and more dependents that don’t produce.
Hauser’s Law, named for its creator, economist Kurt Hauser of the Hoover Institution. Hauser’s law posits that the federal government cannot take more than about 19.5% of national income through taxation and that soaking the rich (or those whom President Obama defines as rich) will not generate the tax revenue
Thanks for the clarification.
You’re right, a national sales tax is not the same as a VAT. I’d still worry about abuse of a national sales tax (and most especially if the donkeys tried to use it as a gateway to a VAT), but still a national sales tax is a whole lot more palatable than a VAT.
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