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 ...
So you think this is all just going to "happen?" To choose just one thing, how about the Earned Income Tax Credit? You think that's just going to go away -- or are they going to increase it because the cost of living goes up for the "poor?"
A bunch of fun talking about but it isn't going to happen.
CUT spending don't give them a vacuum to -- "you'll know what the tax plan will be after it passes" opportunity.
SEAL the border.
Kill ObamaCare.
Get control of the over regulation, taxation and lawsuits on business and watch the money flow into the treasury as people get jobs and business come back.
Individual flat tax on what? earnings? Income?
You mean the almost-50% of the people who don’t pay into the systems that are demanded to exist? Yeah, how horrible for them. I feel their pain.
So, basically, you don’t have a damn clue. You’re against it all, but have no plan. I can see why you’re not running for President.
Gross personal income will decline. Net personal income will remain flat, disregarding any affect the policy has on the growth of GDP and personal prosperity.
For instance, if your annual income is $60,000 and you are paying $9000 in federal income tax, an income of $56,000 and federal tax bill of $5000 will net the same disposable income of $51,000.
The adjustment would not be instantaneous upon implimentation of the policy. It will take some time. The The transition period will be eased by the stimulation of business provided by the flat 9% business tax. GDP will grow rapidly. The income advances that would normally accompany such growth will be moderated by the adjustment necessary to gross income. Most Fair tax proposals to date have include a prebate, which is a suitable mechanism to moderate the effect of price and income adjustments during the early stages.
Whether it is Cain’s 9-9-9, or a jump to a full Fair Tax, mechanisms need to be in place to moderate the effect of prices and incomes adjusting to the new system. Remember at the time of implementation, all existing inventory will already have a full tax burden embedded. You would not be able to literally flip the switch without blowing a fuse.
So you expect them to vote for that pain?
So, basically, you don’t have a damn clue.
Apparently more of a clue than Cain if I can find all the mistakes and misconceptions that he can't.
“And their intellectual capacity on economic matters is evidenced in their posts.
I suspect they’re all women.”
Whoa, now there’s a little misogyny for you. All us little women voicing an opinion, huh? And of course it is of lesser value than your august self’s? And what was your first clue that I was a female; could it have been because I am “flagLADY”? Duh.
“and still smitten with Bush, party insider”
Obviously you have not read my posts from the Bush regime era, otherwise you would know that I was a very vocal critic of George Bush the Younger, especially on fiscal issues (his spending habits) and in particular on his border stance (illegal immigration/border control). But then you know so much about me (just a woman) that you should have known this too, unless you are a relative nooby. But, what can I expect. You’re just a man, a devilish one at that.
The answer to your question is right in the excerpt I already posted to you.
See: Gross income less charitable contributions.
What would make you think I think that?
I think that any massive tax reform is going to be horrendously hard to enact. However, I'm up for the challenge. What about you?
And you seem to be letting what you assume (emphasis) is politically possibly determine what you think is politically necessary.
That's not the case. Don't let process lead. First, evaluate the plan on its merits. Then determine what obstacles there are to enacting it and whether those obstacles can be overcome. Otherwise, you are being defeated by process before the process even begins.
To choose just one thing, how about the Earned Income Tax Credit?
What about it?
Under the 999 plan, as under every conservative major tax reform plan pushed in the last 20 years (such as the Fair Tax and the Flat Tax), the U.S. Tax Code goes away. Period. That is the point.
No more tax code. No more IRS. No more 50% people not paying taxes.
That is all.
How long have you been a conservative and been paying attention to politics?
Have you not heard of the Flat Tax or the Fair Tax proposals?
Why do you assume that any new system of taxation "grows government"?
By all means, let’s avoid bold thinkers because it’s so very unlikely that their bold thinking will get enacted or even move the ball forward toward the massive tax reform our country needs.
Let’s just give up on boldness — even though plans such as Cain’s have been pushed by conservatives for literally decades (Fair Tax anyone? Flat Tax anyone?) — and elect someone who wants to reach across the aisle and tinker around the edges.
Oh, by all means, let’s never elect someone who gets votes just because he has ideas that are good for the country and that we support! That would be stupid! Vote for someone because he’s bold enough to offer a good plan that would get us closer to doing away with the tax code, eliminating the IRS and making all Americans stakeholders in the tax system? No way! Let’s elect the guy who gets votes because he’s not rocking the boat.
/s
Bears repeating:
and all the liberals and Paulbots, crying that the sales tax would hurt old retired people, conveniently fail to mention, that by reducing the business tax by over 30%, the TOTAL tax on goods, would effectively be 18, instead of the current 40%.
so net prices, would go DOWN by 22% on almost everything for Seniors. (and for the rest of us!)
http://www.freerepublic.com/focus/f-news/2791787/posts
Cain Economic Advisor Rich Lowrie Explains Sales Tax via Twitter
“This is in response to the Bloomberg idiot moderators and everyone else who insists that the 9% sales tax will raise prices.”
The problem with this argument is that it is in no way unique to a NST.
Any and all taxes we have now or may have in the future are open to future increases. That is the nature of the beast.
Do you have a professional do your taxes?
If you are self-employed, unless you meet some criteria I've never heard of, you are supposed to be paying the full 15% (employee and employer's share) payroll tax, which is for Social Security under the Self-Employment Contributions Act on IRS Schedule SE.
Maybe you have zero income?
Now I guess you could be taking the tax as a business deduction AFTER paying it. Maybe that is what you are referring to. But you do pay the tax first.
If you truly are not paying the Social Security (payroll) tax, your Social Security "contribution" form you get every year will show you getting zero credits.
How is that different from what can happen to our taxes now? Saying tax rates could be increased is not an argument that is unique to the 999 plan.
What is unique to the 999 plan is that finally everyone, not just about 50% of us, would be paying taxes. So it would be a lot harder for congresscritters to raise rates.
The problem with this is that it lacks the accountability that a NST has. We all know how hidden fuel taxes are now. Even when gas prices go out of control, people don't think, hey, maybe the government should back off some of the taxes adding to the price burden of a gallon of gas.
The tax not only has to raise revenue, it has to be open and notorious -- and having it on every receipt does that.
Art Laffer just caused an earthquake over at CNBC and Bloomberg Business.
People who want to understand the importance of this should look up the “Laffer Curve.”
Yes, I have zero credits on those social security forms, all my income is rental income that is handled differently than other types of self employment income. I pay no social securiy of medicare tax on that income.
I will be able to get social security and medicare though (just like a stay at home mom), because I will be able to claim it as a spouse on my wifes plan which she does contribute too through her salary.
The same argument could be made for the health insurance industry, which is in the bag for Obamacare.
They don’t want it repealed, but we are going to try to, and I believe, likely will repeal it anyway.
Just because there are armies of lobbyists out there doesn’t mean we give up before we’ve even begun.
Do you really want a President to have power to control state and local taxes, too?
I don’t.
If you can’t bear your state’s tax burdens, and can’t get them changed, I hope you’re able to vote with your feet. That’s what’s going to have to start happening here.
Have you ever heard of Art Laffer?
He’s a smart guy and a real economist to boot.
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