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?
Personally I think the American Idol style judgements of the candidates makes us no better than the leftards.
Go to their websites and look at their plans.
Cain is raising a very vital and critical issue. It is essential that we get people in that bottom 47% paying taxes again, sharing in the burdens and getting engaged in the discussion of exactly WHAT government should be doing and HOW it should be paid for.
The future of the Republic hinges on that, and thusfar Cain seems to be the only one out there with the guts to talk about it.
Yikes!
I can answer them from a position of a supporte that likes the idea:
1) How does it affect the life of a low income at or below or even a little above poverty level wage earner? A: They will control how much tax they pay (and they will pay more) by saving as much as they can and spending less. Every time they don’t buy a thing they don’t absolutely need they save not only the price, but the tax. Of course, that means people may buy less stuff they don’t need.
2) How will it affect the total price of goods and services? A: They will be significantly lowered for several reasons. First, there are no federal taxes rolled into the prices other than the 9%. Second, the companies can lay off huge sections of their tax departments because a simple tax system is relatively easy to comply with. Of course, that may impact the unemployment rate.
3) How will it affect small businesses, will it make it more expensive or less expensive for them to do business? A: see the second point in the above response. And again, it will allow them to lay off people who are currently on payroll to ensure compliance with various federal and local tax requirements.
4) It adds a new tax, which is a temptation to congress to turn it into a complicated pile of dung. A: He already answered that and it’s my perspective as well.
The interesting thing is that it would have a significant impact on the price of goods and the cost of doing business, which are interrelated. So everyone would see a drop in actual price of goods and everyone would get more control over how much tax they pay since they can alter their discressionary spending. But both of those can be bad for the economy.
—If people spend less, the economy shrinks.
—If the tax code is simplified, an army of accountants, attourneys and support people will be laid off.
And that is the dirty secret about our current tax system. It is literally an employment behemoth. It has become so big that the only way to eliminate it is to do it at a time when the economy is so strong that it can afford the massive hit to the economic culture (spending drop off and layoffs of those who work in the tax industry)
It’s going nowhere, and I think Cain knows it. I still really like him, however. Partly because it is the best “flat tax” plan I have yet to see. I like his thinking.
“What’s to stop the CURRENT Congress, or any in the future, from raising the income tax? The Medicare tax? The Social Security tax? The sales tax? The gas tax?”
It is much easier to tweak (raise) existing tax than to create totally new tax.
She lost almost all of her credability when she says crap like that. Attack the plan - no problem - I'm all ears. Attack it for a "666" reason, and she's apparently nothing more than a Bimbo, because that's the sort of response I'd expect from a Bimbo.
It only does away with taxes on dividends paid out by business. Dividend income will be taxed under his plan.
READ what he wrote on his website, not the spin he keeps changing everyday talking about it.
I notice you go from thread to thread attacking Cain while pretending to be a voice of reason. LOL!
At any rate, I think it’s funny that you are ignoring the fact that 9,9,9 is a REPLACEMENT tax and NOT in addition.
The entire point of it can be raised. Oh and current taxes CANNOT get raised???
It would be a lot harder for congress under Cain’s tax code vs. the current communist progressive tax because it would affect ALL classes vs. let’s just tax the rich. Moreover, under Cain’s proposal it requires a 2/3 majority in congress vs. 51% under the current communist progressive tax code.
The point is that I contend in principle, there is no way that raising any of the components of Cain’s plan would be easier than raising any of the current tax components. I believe it would actually be more difficult because the simplicity of Cain’s plan would mean that a raise in any one of the components would be a lot more obvious as compared to a “stealth” increase like we see in property taxes, gas taxes, and so on.
Cain has to unchain himself from this 999 plan.
I’m not saying it’s a bad plan. I haven’t formed a strong opinion about the plan. There are things I like (flat tax) and things I don’t (new tax source for the feds).
But the main thing is, Cain has to run as a Presidential Candidate, not as a Tax Package.
In some way he’s got to say something like: look, this is my idea, and I will push for it strongly but of course the president is not dictator and if congress and the people don’t want this there I will still show my conservative bonafides in how I perform my duties as President.
Regardless of whether 999 ever becomes law or not, I will strive to curtail regulation, lower taxes and promote growth.
Something like that.
She sounded very lame with that lame comment.
$$$$$$$$$$$$$$$$$$$$$$$
I couldn’t agree more. That was SOOOOO stupid, so lame, so sound-bitish. I totally lost respect for her as a politician because of that.
Insulting, childish, just horrible. That is the kind of thing I would expect from the Liberals.
Michelle, it is time to pack it up and go away. The sooner the better. Please. You are really an embarrassment.
Point of Sale
He can't do that, it would be admitting it's only a ploy to get into office. And don't shout, we can hear you.
That would be acceptable to me. Are you sure?
Gees. Lighten up. It was a joke. Basically Christians are complete whack jobs, in any case, because we believe somebody actually rose from the dead. How lame is that? The Bible tells us that what we believe is foolishness to the world, and so it is.
“The entire point of it can be raised. Oh and current taxes CANNOT get raised???”
I make the same point again since some people just don’t seem to get it: It is much easier to raise existing tax than to create totally new tax.
AMT (for the “20 rich families”) is a good example.
I’m now convinced that 999 is dangerous and besides, it has zero chance of getting passed, so better just to treat it as a talking point in the initial phases and move on.
But to hear somebody claiming that there is “protective measures” that prevents future tax hikes just makes me sad (just how dumb can a conservative be? - any law passed by congress can be rewritten by congress. There are no protective measures).
“The entire point of it can be raised. Oh and current taxes CANNOT get raised???”
I make the same point again since some people just don’t seem to get it: It is much easier to raise existing tax than to create totally new tax.
AMT (for the “20 rich families”) is a good example.
I’m now convinced that 999 is dangerous and besides, it has zero chance of getting passed, so better just to treat it as a talking point in the initial phases and move on.
But to hear somebody claiming that there is “protective measures” that prevents future tax hikes just makes me sad (just how dumb can a conservative be? - any law passed by congress can be rewritten by congress. There are no protective measures).
I agree. I like Michelle but that was really a stupid comment that made no sense.
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