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.