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?
The question is, does the candidate have unimpeachable integrity? has his character been properly formed? is the candidate an executive? is he a leader?
Plan, schman. It was a mistake to bring it up. Where is Romney's "plan?" WTF is Obama's? They're laughting at conservatives because any "plan" is an easy target.
Drop it now. Run on the character and experience of Mr. Cain. In that area, he can laugh at them.
The criticism of the 3rd leg of Cain’s 999 plan is valid.
The last thing we need to be doing is giving congress yet another avenue through which to fleece the American public.
It also encroaches upon state and local governments ability to raise revenues at their level.
However, with that said, I wish that Cain would remind his base and his critics that PRESIDENTS DON’T GET EVERYTHING THEY WANT!
No... 999 will NOT pass as he is proposing.
But... if Cain can win the argument and fight to throw out the current tax code, ironing out the details of 9-9-9, or 9-12-0, or whatever will be easy.
CAIN needs to re-emphasize that what he is proposing is a PLAN... not an all or none deal. Presidents don’t write legislation, but they are expected to lead on concept and propose a base framework to start from.
9-9-9 ping! The above is worth discussion.
Santurum came up with two arguments that I found uninspiring against it:
1) Making the bottom 50% pay some federal taxes (in addition to entitlement taxes) is raising their taxes and that is bad.
(Well?? they get to vote dont they?)
2) Consumption taxes are bad because we are a consumption economy
(we are a nation of Grasshoppers like Greece depending on handouts and cant change so learn to live with it???)
RE: These “vigilant” people haven’t been terribly effective in preventing the income tax and payroll tax from mushrooming to levels far higher than those initially promised by the politicians who championed these levies.
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Well, if we can’t depend on the vigilance of American people to keep a check on their government, then EVEN WITHOUT the 9-9-9 plan, we’re doomed anyway.
ANY PLAN, be it Romney’s or Gingrich’s or anyone else’s can be defaced by any future Congress no matter how good it looks in the beginning.
‘Eternal Vigilance is the Price of Liberty’ (Thomas Jefferson).
If we can’t depend on this, then WE’RE SCREWED BIG TIME.
What’s lame is so-called conservatives giving full-throated support to candidate whose central platform pillar is a NEW 9% federal sales tax.
If you call shouting 999 to every question asked not getting flustered, OK.
I plan on running this comment on every 999 thread I come across. I am not afraid of the 999 plan and here is why. The very first thing to understand is the current tax system will be abolished. This is how I understand the plan works. I’ll round out numbers to make it easier to understand. Today I gross $1000 per week. FICA/MED deductions is 7.5% plus employer match is 7.5% and income tax withholding is 10%. Total deductions from my pay is 17.5% so my net pay today is $825.00.
Under the 999 plan my gross pay increases by the amount of the employer match of 7.5% (because that always was my money) and gross is now $1075.00 per week. 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!
Even with the tax write-offs I was able to claim I still managed to owe money to the IRS every April. Not under the 999 plan because there will be no more IRS!!!! A whole government agency eliminated!
Now onto the 9% national sales tax. We will be saving money there too and here is how. 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.
Now I am not a business person and do not fully understand economics, pricing theories, etc. and what I’ve presented here is very simplistic and basic, but if I understand Mr. Cain’s 9-9-9 plan as I’ve described here, I see nothing but good things. If I am wrong here in my calculations, please let me know.
It seems to me that the big fear is the government will increase it to 15-15-15 or something but if protective measures were locked in that shouldn’t happen. I have to take Mr. Cain at his word that this plan of his is revenue neutral and that it would supercharge our economy which would increase jobs and further growth. He also claims that the national debt will be paid off within 10 years under this plan.
WHAT IS NOT TO LIKE?
It feeds right into the media image of conservatives as Bible-thumping lunatics.
If there's anyone out there who thinks the payroll component will be kept at 9% needs their head checked as well.
OK, Bachmann made a lame joke. Big deal.
RE: What’s lame is so-called conservatives giving full-throated support to candidate whose central platform pillar is a NEW 9% federal sales tax.
Let’s not make it sound as if this is the only ‘9’ in his plank. If we’re going to critique 9-9-9, let’s look at it HOLISTICALLY, not pick and choose just one aspect.
We can start by critiquing his argument that it does away with Payroll, Dividend, and other taxes that he claims will INCREASE the wage earner’s salary and SIMPLIFY the tax code so that businesses and individuals don’t have to spend hours and hours doing their tax forms or even paying others to do it for them.
For people with a biblical world view, the remark is not surprising. She followed it with the warning that it’s not wise to open another revenue stream for Washington. That was a legitmate shot to Herman’s plan. I think his plan got some significant scrutiny last night. For one thing, it made me think even if I did get money back from a lowered income tax, how would I deal with a 9% Federal sales tax added onto my local and state sales taxes that are over 8% now? That’s 17-18% tax. That’s a chunk.
Michelle,
Shut up,
You dummy.
He has a classic educated “Old South” accent with a touch of the classic Southern Black accent.
I like it, but it’s definitely not flat Newscaster Midwestern.
Great post. I agree with you and I’m a Cain supporter.
I made that joke a few days ago here, but as a Cain supporter I was obviously kidding, and from a completely different perspective than her. Also, if I were a presidential candidate, there is no way in he** I’d have brought it up.
Talk about dumb.
“Now I am not a business person and do not fully understand economics, pricing theories, ...
It seems to me that the big fear is the government will increase it to 15-15-15 or something but if protective measures were locked in that shouldn’t happen.”
Once we create new tax, it is guaranteed to go up (once dems control White House and Congress again). Anything passed by congress can be overridden by congress.
There are no protective measures. Constitutional amendment would make it more difficult, though.
Still, there seems to have many problematic issues in 999 plan, so it sounds too risky. It was good for initial publicity, but now time to move on to serious business.
“Now I am not a business person and do not fully understand economics, pricing theories, ...
It seems to me that the big fear is the government will increase it to 15-15-15 or something but if protective measures were locked in that shouldn’t happen.”
Once we create new tax, it is guaranteed to go up (once dems control White House and Congress again). Anything passed by congress can be overridden by congress.
There are no protective measures. Constitutional amendment would make it more difficult, though.
Still, there seems to have many problematic issues in 999 plan, so it sounds too risky. It was good for initial publicity, but now time to move on to serious business.
Keep in my that Bloomberg DID NOT give Cain a chance to respond. Which was total B.S.!
2) I lost ALL RESPECT for Bachmann last night after these comment. I wondered is Bachmann just lying or is she THAT STUPID??? To Imply that this plan is additional tax to confuse people was complete B.S.!
I know longer trust Bachmann on the campaign trail. I am firmly in Cain’s camp too.
Yes Romney did the best job last night(Cain did good enough), BUT....
That does not mean I want a LIBERAL REPUBLICAN as my choice. NO WAY!
If Romney (the leftist choice) gets the nomination, then conservatives will have the choice in 2012 to vote for Liberalism or Communism.
If Romney gets elected... Obama Care for the most part will stay in place, illegal immigration will continue, taxes will not improve much, gays in the military will stand and more gun control.
For the record, I’m not voting for the best person in the debate. I’m voting for the candidate that best represents me and that will be Herman Cain.
that voice is pure Georgia. Sounds exactly like a drill sergeant I was once in the custody of...
His biggest asset is that he is the genuaine article.
The details will be sorted after inauguration day.
RE: For one thing, it made me think even if I did get money back from a lowered income tax, how would I deal with a 9% Federal sales tax added onto my local and state sales taxes that are over 8% now? That’s 17-18% tax. That’s a chunk.
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That’s the DYNAMIC SCORING part of what Herman Cain was trying to get across (but never had the time to complete
in the time he was alloted).
The other 9% is the CORPORATE TAX ( which is now at 35% for large companies ). His argument will probably be in the form of a 9% FLAT tax on Corporations (without any loopholes and having to pay an army of lawyers and accountants to find them) will serve to LOWER their tax burden such that the COST of producing goods and services will be CHEAPER, which via market competition, will be passed on to customers.
His other argument is that the current PRICE of goods that you pay ALREADY has EMBEDDED taxes in them, which will be replaced by the 9% sales tax. Hence, the overall effect on final prices paid by consumers will be NEUTRAL ( his words, not mine ).
Of course, many people in other threads argue that this is a naive and unrealistic assumption ( e.g., Companies DON’T necessarilly pass on savings to consumers, preferring to pad their bottom line ).
And so, the debate goes on.
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