What’s the basis for your conclusion that this plan will raise fewer revenues?
IIRC, Art Laffer said Cain’s plan will raise more revenue.
The following analysis by liberals aching to run against it:
– For the income tax portion: In 2007, total Adjusted Gross Income on all income tax returns was $8.7 trillion. Since Cain’s plan would exempt investment income, but would have no other deductions, that brings taxable income down to $7.4 trillion. A flat 9 percent tax would therefore have yielded about $665 billion in income tax revenue.
– For the corporate tax portion: In 2007, there was a total of $1.3 trillion in reported corporate income subject to tax. A flat 9 percent would have yielded $112 billion in revenue.
– For the sales tax portion....generally accepted estimates of the revenue generated from a value-added-tax (see here and here, for example). Those estimates suggest that a broad-based 5 percent tax on goods and services would generate about 2 percent of GDP in revenue. That implies that a 9 percent tax in 2007 would have generated about $500 billion.
– Together, then, the 9-9-9 plan would have generated a bit less than $1.3 trillion in total federal tax revenue. That may sound like a lot, but it’s only 9.2 percent of GDP. In 2007, we actually collected 18.5 percent of GDP in tax revenue. In other words, the 9-9-9 plan would cut federal revenue in half!