Posted on 10/13/2011 5:19:07 AM PDT by Cincinatus' Wife
Herman Cain's "9-9-9" tax reform is attracting enough attention to become the focus of this week's Presidential debate. As a plan for overhauling revenues and unleashing the private sector, it's a bold gambit that shows Cain is willing to take chances and shake up the Capital.
The 9 percent business tax is a stroke of genius. It would give us the lowest business rates in the world and would make us the "tax haven" for investment from everywhere. The stock market would barely be able to stay abreast. The 9 percent personal income rate would eliminate all the deductions and put everyone on a level playing field. Tax collection from "the rich" would skyrocket because no one would hide income anymore, but "the other 99%" would make out as well. Cain's plan would fold in the 15 percent payroll tax so the new 9 percent rate would be an improvement - but would end the immunity that the bottom half has from paying any taxes at all. Altogether a good show.
The stickler is that 9 percent national sales tax. That's where things start to fall apart....
The sales tax has long been the preserve of the states and is now imposed in all but five of them (Alaska, Delaware, Montana, New Hampshire, and Oregon). The informal arrangement has been that the federal government gets income taxes, the states get the sales tax and local municipalities are granted the property tax. Often they poach. States and even cities have imposed income taxes and have also started trespassing on the property tax. But for the federal government to demand a 9 percent sales tax would be a whole new departure. Combined with state and city levies, it puts us near 20 percent, which is black market territory.
(Excerpt) Read more at spectator.org ...
Spin away.
The key is that a 20% sales tax...
Can we talk about the reaction to a 16% total sales tax instead?
Where did you ever get the idea that it would abolish payroll taxes. Sounds like a 9% payroll tax to me. Do you think that the government is going to shut down an year-round income stream and expect everyone to pony up 9% at tax time?
While it is true a new sales tax is added federally, Cain takes away two taxes while doing so. No more inheritance tax, and no more capital gains tax.
A sales tax happens every day that you purchase something, anything, including gas, food, etc. You get an inheritance once or twice in a lifetime. You sell a house maybe a few times at most in life, if that. Only fairly well off folks are buying and selling stocks to benefit from the capital gains tax being removed, and that too is not an everyday thing that one is buying/selling stocks. Meanwhile, day after day after day you are hit with the sales tax on everything you purchase, and at any time some future Congress can raise the percentage whenever they get the urge for more money. No thanks. Bad deal, especially for the lower to middle class.
“Under 999, EVERY SINGLE constitutent in EVERY SINGLE congresscritter’s district would be affected by any tax rate increase (both income and sales).”
And so they would do it gradually, a half percent here, a half percent there, kind of like the frog put in a pot of cool water that is warmed gradually so that you don’t notice.
If a farmer needs a new lawn tractor to mow his lawn, the farm business buys one. No sales taxes and the entire cost is ‘wrote off’ the business income. Ditto on new pick-up trucks, beef for the freezer, etc. ect.
I’m a business owner in a sales tax state, and can tell you that we pay sales tax on all business purchases, UNLESS they are for resale, and we collect sales tax on the resale.
I can easily avoid sales taxes already by buying mail order. I’m even clever enough to have figured out how to buy vehicles without paying sales tax.
Even if true, how is that risk greater than what we face every day now with Congress’s power to raise taxes?
Are you so satisfied with the present system that you are unwilling to consider how this might be put in place in a way that works?
Would you like to see the tax code abolished, the IRS phased out, every person in America a stakeholder in the tax system?
I see this as a freedom issue as much as anything else.
Raise the cost of electricity and fuel and EVERYTHING goes up. What an idiot.
His point is that it is far easier to administer a tax on a few big utilities than on every retailer in the nation. And far less intrusive.
” Herman needs to look at dropping the last 9 and concentrate on 10-10 or 12-12 and taking a huge chunk out of federal spending.”
We should just have a 9-14. 9% business tax and 14% sales tax and that’s it. Do away with income tax altogether and get the IRS out of everyday citizens lives. The IRS would only be involved in businesses and their accounting. Changes to allowable deductions for businesses would be needed. US workers would be in complete control of their earnings and spending. The 51% of the population that currently do NOT pay taxes would being paying something. This 14% rate could be adjusted upward/downward depending on societal need (Congressional approval, federal spending cuts, etc...). The only unknown would be local (states, county, cities) tax needs.
You forgot...unless they are consumed by the business in the course of normal business operation.
I know how the system works, and any business can really work the system. A business will make out great, others, not so much.
“Congresscritters could no longer raise and raise the tax burden (as they have on the cost of gasoline) without people realizing it and raising hell.”
Oh heck, we raise hell all the time right now, so you think that would really stop them from raising taxes? Dream on. And if they lower taxes in one place, they will pop up in another. If you don’t think there won’t be a multitude of ways around 9-9-9 to raise revenue, you are drinking kool-aide.
His solution is hilarious!!
Well, done and point made. :)
Phase 1 - 9-9-9
•Current circumstances call for bolder action.
•The Phase 1 Enhanced Plan incorporates the features of Phase One and gets us a step closer to Phase two.
•I call on the Super Committee to pass the Phase 1 Enhanced Plan along with their spending cut package.
•The Phase 1 Enhanced Plan unites Flat Tax supporters with Fair tax supporters.
•Achieves the broadest possible tax base along with the lowest possible rate of 9%.
•It ends the Payroll Tax completely – a permanent holiday!
•Zero capital gains tax
•Ends the Death Tax.
•Eliminates double taxation of dividends
•Business Flat Tax – 9%
◦Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.
◦Empowerment Zones will offer additional deductions for payroll employed in the zone.
•Individual Flat Tax – 9%.
◦Gross income less charitable deductions.
◦Empowerment Zones will offer additional deductions for those living and/or working in the zone.
•National Sales Tax – 9%.
◦This gets the Fair Tax off the sidelines and into the game.
While the 9% national sales tax is a baaaaad idea, the author’s solution is far worse. Since any tax levied on businesses will be passed down to consumers, consumer prices will inevitably rise. It will also pick winners & losers, giving government preferences to “low carbon” industries. Nope. Not a good idea.
And if your income remains the same and your taxes go up, as they will for the majority of taxpayers, then you can afford less. So where does that make Cain's plan a good thing?
There *is* much more to the man, but the media is focusing on 999. It doesn’t take much to look up his positions on all the issues.
Spending cuts are a huge part of his plan. So is exploiting our energy resources.
And 999 is the answer to most things. We need a thriving economy, stock market and jobs. We need to kill the IRS. We need to kill the EPA and the DOE. (Things Cain wants to do.)
The debate had him sounding like a broken record because the economy was the topic of the debate. He held his own. The next debate will have a different topic and we can move on.
P.S. The payroll tax revenue stream would be replaced by the NST, an ongoing revenue stream based on consumer purchases.
If the government gets less money that way, GOOD. SPEND LESS. BUDGET ACCORDINGLY. PRIORITIZE.
And don’t forget that the elimination of payroll taxes and all the other taxes on the list and the drop of the corporate tax from 30+% to 9% will put DOWNWARD pressure on consumer prices, which would spur consumer spending which would feed the NST.
And if the tax is raised gradually and no one cares, is that a problem? If so, who is at fault for not holding Congress to account?
The reality is that if and when the tax became too much, the people would respond and, more importantly, they would have the leverage to respond, because every congresscritter would be affected.
>>Many states already pay an 8-9% sales tax.
If you look at the max sales tax in the worst city or county of each state, 22 states have 8%+ sales taxes somewhere in the state.
If you look at statewide general sales taxes, NO states have 8%+, and only 6 have 7%+.
>>The economy needs cuts
I agree, and with a NST as part of the mix, even low-income voters will be more eager to lower that “9” by cutting spending.
Fifty percent of the people in the country do not pay any taxes whatsoever.
Might that have something to do with why our protests to date are not very effective?
Please reread the argument and understand that there is a big difference in accountability when every American has a stake in how taxes are compared to today when 50% of Americans are actually egging Congress on to raise taxes on the rest of us.
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