Seniors on Social Security. The seniors have spent their lifetime paying the payroll tax, but now they are beyond those years. They have no direct benefit from the abolition of the payroll tax. However, they will now have to pay an extra 9% on everything they buy, so for them the plan seems a net fairly strong negative. And without the seniors, Cain will fail and so will 999.
Do I misunderstand? Did I miss something? Cain fans please reply (I basically like Herman a lot!).
And 9% on all their income regardless of source. All the extra exemptions retirees enjoy under the current laws will disappear under Cain's plan. It's a major tax increase for most people. Not something one would want to base a presidential campaign on.
You are correct. Seniors take it on the chin with 999. I don’t think Cain has addressed it yet. He has said he will add a chilean style social security (10-20% of income), but he has not said how he’ll fund the seniors already on social security since his 999 doesn’t bring in enough to both pay government costs and pay SS and Med.
Unless he comes up with something reasonable, Obama will eat his lunch with the senior vote.
The abolition of the payroll tax will affect the price of goods and services, oftentimes pushing prices downward.
When corporations pay a lower tax rate, as they would here, they don’t have to charge as much for their stuff. Since they will always try to get more market share by lowering prices, if they can, this increased ability for price competition would also push prices downward.
One thing that must be remembered here is this is not taking 9% and tacking it onto the consumer market as it is now. That 9% will be operating in a market where other forces will work to bring prices down, most likely on basic commodities most.
For example, if a cup of coffee costs $1.00 now and a 9% sales tax were added, it would cost $1.09.
But if the cost of that cup of coffee dropped to 75 cents and a 9% sales tax were added, it would cost 82 cents, still less than $1.09.