Michelle Bachman has just turned herself into a characture of the "church lady".
"999, could it be........ SATAN!!!!"
Posted on 10/12/2011 7:04:06 AM PDT by SeekAndFind
Via Breitbart TV, the soundbite of the day from tonight’s debate. Is she right? According to Josh Barro (via our pal Karl), maybe so:
Herman Cain’s 9-9-9 plan includes a personal income tax, a business tax, and a sales tax, all at flat rates of nine percent. Bruce Bartlett critiques the plan in the New York Times today, and he flags a fact about the business tax that I hadn’t been aware of:
“The business tax in the Cain plan bears no resemblance to the present corporate income tax. The tax would apply to gross sales less dividends paid and all purchases from other companies, including investment goods. Thus, there would be no deduction for wages.”
This is far more similar to a value-added tax than to a corporate income tax. And indeed, the description on Cain’s website matches Bartlett’s, saying the business tax would apply to “Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.” One question is what Cain means by “gross income,” but I think he has to mean something like gross revenue–anything that looks like a profits concept would already exclude “purchases from other businesses” and so they would not be there to deduct.
In other words, in effect he’s proposing both a sales tax and a de facto VAT that’ll operate as a second sales tax on top of it. I’m not sure Bachmann realizes that or else she would have nailed him on it right here. Bad enough that Congress gets to play with one new “invisible” tax on consumers, but two?
Actually, I agree with you. I think it was gimmick to get peoples ears. People are just getting so radid about their candidates. I hope they realize that who they’re demonizing today, may be one of their few choices down the road. Legitmate, informed criticisms are helpful, but spilling bile on everyone will end up turning so many people off that we’ll end up with the least conservative candidate and possibly Obama. It’s an imperfect world. Find the jewel with the least flaws, but find one. Yeah, and I’ll probably even vote for Romney because my salvation does not come from this government.
What’s lame is so-called conservatives giving full-throated support to candidate whose central platform pillar is a NEW 9% federal sales tax.
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No kidding. The fact that Cain would even consider such a nightmare of a plan proves to me he is unqualified.
I will not vote for him.
It's OK - tomorrow she'll come out, make it clear she is done dabbling with witchcraft, and it'll all be good!
/s
A Federal sales tax is at rest. It doesn't exist. Once it exists, it's in motion, so then force has to brought against it to restrain it or stop it.
The real problem is spending anyway. This is all interesting, but it doesn't solve the real problem. Show me the government employees laid off since fall of '08, and we'll compare those to the private sector. That's the problem. Let's share the sacrifice as the president likes to say.
“Since entering the presidential race, Bachmann has barely had a moment of NOT sounding lame. Such a disappointment. She really should have just double downed on her Congressional role. Now, she’s nothing but annoying. And feeding the perception of her flakehood.”
Agreed. I contributed to her Congressional campaign but she’s sounded like a backwoods doofus since announcing her presidential aspirations. Dropping out now would eliminate further embarrasment on the national stage.
It would also be 100% correct to say:
Once we create new tax, it is guaranteed to go down (once dems control White House and Congress again).
Income tax rates, FICA/SS tax rates, all tax rates have gone up AND down. Focusing on just one half is disingenuous.
So why aren't rates increasing now? Since you claim they can at any time... They are NOT going up because enough vigilant citizens who pay their taxes are keeping a watch on Congress, and raise a lot of noise when Congress starts talking about revenue enhancements and tax increases.
With the 9-9-9 plan, you are bringing another 150+ million people into the tax payment world. People who don't pay taxes now WILL pay taxes in the future - we will ALL pay taxes.
So we've just doubled the number of citizens who will now pay attention about things like tax rates.
More taxpayers means more vigilance over Congress and its tax raises. The ability of Congress to raise the tax rates in the future will be diminished because even more of the population will be out for blood if they try it.
Saturday Night Live has new material.
WRONG. It is 18% of GDP. Income is taxed only once - either at the corporate level or personal level. The double taxation we have now is gone. So for a given dollar, it's either taxed at the corporate level (9%) or the personal level (9%). Not both as you claim.
And then, IF that dollar is spent, there's another 9% on it. So you get 9% for the income (corporate or personal) and 9% for spending. Total is 18%, not the 27% you're trying to claim.
Historically, over the longer terms (5+ years) since WWII, the Federal Government has averaged 18% of GDP in terms of revenue (Hauser's Law). Cain's 9-9-9 plan does JUST THIS. Matches historical revenues. It does it with two significant changes, however:
1. Rewards efficiency in business and investment by eliminating the massive number of deductions, exemptions, setasides, and double-taxation.
2. It makes EVERYONE pay in, rather than making 50% carry the full load.
It's actually a revenue neutral plan, but one that is skewed to rewarding efficiency and should grow the GDP faster than the 80,000+ page monstrosity of a tax code we have now.
I used to hate the idea of a VAT tax until it occurred to me that it is a regressive tax that distributes the tax burden a little more towards those who currently don’t pay their fair share. Also it’s a tax that would encourage savings - and I think that change of mindset would lead to a better America.
The federal government is going to get 20% of GDP one way or another, even in a conservative administration. It gets closer to 25% under the current one, after all the stimulus spending and Reid’s refusal to present a budget for two years.
Cain, to his credit, has opened up the tax argument. I just hope it doesn’t cost him the nomination. I think he’s going to have to dance around this one a bit when he realizes the trouble it’s going to cause him (as evidenced in this thread) and that we’re going to get to see how nimble he really is.
I’m hoping he settles on a flat tax in the end, because that’s the hardest tax to raise and, just as important, the easiest to reduce, but we’ll see...
I know I will get flamed for this, but the gals a circus clown, she has repeatedly (long before the campaign cycle) engaged in rediculous hyperbole and good, but wholely inaccurate, sound bites to get attention.
She has not demonstrated anything that would remotely motivate me to vote for her for President. She’s a reliable soldier, but I wouldn’t make her a general.
Ah, the mantra of the mindless misinformed or the malignant misinformers.
RE: I used to hate the idea of a VAT tax until it occurred to me that it is a regressive tax that distributes the tax burden a little more towards those who currently don’t pay their fair share.
Just keep in mind that Herman Cain’s SALES TAX is NOT a VAT Tax.
This is my real argument - Congress will never pass this program because it reduces their power. Democrats won't vote for any change that won't exempt their key constituents and allow them to control the US population through taxes and exemptions.
I think it's a great plan that would get more people involved in keeping taxes low, but that's exactly why it would never pass.
Michelle Bachman has just turned herself into a characture of the "church lady".
"999, could it be........ SATAN!!!!"
[
1. Rewards efficiency in business and investment by eliminating the massive number of deductions, exemptions, setasides, and double-taxation.
2. It makes EVERYONE pay in, rather than making 50% carry the full load.
]
Exactly both reasons why I like it, Plus it says exactly what Obama said once “That the millionaire should pay the same amount of taxes as the plumber” or soemthign to that effect, ol’ dumb barry didn;t realize at the time he said it that he agruing for a FLAT type of tax. If Cain gets the Nomination, he should use this Obama Quote to hang Obama on his own petard.
I agree, we don't want that at all. The worst of all possible outcomes: A national sales tax *and* an income tax. It's reason enough for me to vote against the man.
I follow you so far.
Under the 999 plan my gross pay increases by the amount of the employer match of 7.5% (because that always was my money)...
What makes you think that your employer considers that your money? Wouldn't any employer logically conclude it was their money? After all it was coming out of their pocket and not yours. Is a headcount tax that they have to pay 'your' money? Unemployment insurance contribution? Workman's comp? Or would any rational employer conclude those are all a cost of doing business above and beyond what they have to pay you in salary?
My new income tax deduction is 9% so my net take home under 999 will be $1075.00 minus $96.75 or $978.25. Under Cain’s 999 plan my weekly take home just went up $153.25 per week!
Let's take another look at that, and since I don't know you I'm going to take the liberty of making some assumptions about you, that you're married and have a couple of kids and don't itemize. So come tax time and you've got your income of $52,000. You're married, filing jointly. You have 4 personal deductions of $3650 each and a standard deduction of $11,400. So your taxable income is $26,600 and your income tax is $3155. You have two kids, that's a $2000 credit right there so your tax is $1155. The Work to Earn credit knocks another $800 off so your tax bill for the year is $355 or $29.58 per month. On top of that you pay FICA. That's currently 5.65% for the individual's part so your monthly tax bill is $244.83 + $29.58 = $274.41.
Under Cain's plan you pay 9% period, with only charity as a deduction. So if you're a greedy individual, Cain hits you for $390 a month. That's almost $120 more. Then there is the additional 9% on everything you buy. Say you spend $700 of that weekly $1000 on food and beer and clothing and rent and the cable bill and cell phones and whatever, that's an additional $63 per week in taxes, $273 per month. So under Cain your monthly tax bill is $663 instead of $275. Your taxes more than double.
Presently the people who make the food and products we buy pay taxes which they pass along to us. These corporate/proprietor rates are higher but let’s just use a 25% tax rate. Under the present system an item that sells for $100 has the $25 tax imbedded in it along with the profit the seller makes. Since the new business/corporate tax rate is going to be 9% the savings of $16 can be deducted from the cost of the product and that $100 product can now be sold to me for $84.00. After I pay the 9% national sales tax the cost to me is $91.56 instead of $100.
A couple of problems with that logic. First, why should the company do that for you? What requires them to pass the savings - any cost savings - on to you? If you pay $50 for your widget and you've always paid $50 for your widget then why should the company charge $49 just because their costs went down? Why wouldn't they just take that cost savings and pass it on to their stockholders or pay down their debt or increase their dividend payment or just plain put it in the bank?
Second flaw, taxes are placed on profits and not gross income. Say corporation A makes $1 billion per year and has a profit of $100 million selling their widgets for $100. Say they have adequate accountants and pay the 25% you spoke of. So they pay $25 million in federal tax, or $9 million under Cain. That $16 million will not reduce the cost of the widget to $84 because only one part of the cost of production has gone down. The rest remains the same. A best case scenario might be that the cost of the widget may go down $1.60 which is the savings on taxes of $16 million divided by the total gross of $1 bilion.
But what about all the expenses and deductions that companies currently take advantage of before determining profit. Won't those all go away? What if under Cain the realized profit isn't $100 million but is instead $200 million? Then the tax will be $18 million and the savings are less.
If I am wrong here in my calculations, please let me know.
And I make the same disclaimer and ask the same favor. If you don't see the logic in my assumptions please say so.
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