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 ...
The FairTax is an excise tax uniformly applied to spending on retail goods and services above the poverty line and therefore meets the Founders original constitutional provisions for taxation apart from any amendment including the awful 16th Amendment.
http://www.fairtax.org/site/PageServer?pagename=about_faq
Study Study Study and Ask Questions.
Well said, Jeff.
Great observation well stated.
Nope. The federal government cannot tell the state and local governments that they can't levy taxes of their own. The 9% federal sales tax is in addition to any state and local taxes currently in place.
999 abolishes the payroll tax. This would allow businesses to compete more on price and pass on savings to consumers.
So even with a national sales tax, the total cost of goods could (and likely would) be less.
This, coupled with increased household income generated by lower household income tax rates, would likely up, not tamp down, demand.
They won't. And it will elevate those opposed to it.
NONSENSE!!!!!
Listen to yourselves! You are quibbling over details!
What POTUS gets EXACTLY what they propose?! None. Everything gets changed as it goes through our legislative process.
The FOUNDATION is to broaden the tax base (get everybody to pay something) and to make it transparent.
If you can’t support that, you are not a conservative.
“Even if Republicans score a resounding victory in 2012, they’re not going to have a filibuster-proof Senate majority.”
Another pundit that has a crystal ball..... Too funny
Oh man, how the hell can he impose what how much taxes states can collect? If he said so then either he is either a fool or a liar or both. Are you sure he said that because it is hard for me to believe that even someone like Cain the TALKER can say such insane stuff.
People in Cook County, Illinois would pay darned near close to that - 19.25% once Cain's 9% sales tax is added to the existing sales tax. In my neck of the woods it would only be 17.25%
Show me in his plan listed on his website, that says there would be no tax on used items. I don't think it is there.
His supporters are now spreading the lies that his 9% national sales tax is going to replace or reduce the state sales tax. Can you believe this crap?
Isn't the 5.56 number a temporary number. I think the actual number is 1/2 of the 15 percent. The employer pays the other half.
Every criticism of 9-9-9 that I read steps around or blatantly AVOIDS the reality of EMBEDDED taxes in every good/service in the so called ‘free’ market. If the business cost of producing goods/service is reduced to 9%, then the ‘levelizing’ force of embedded tax GOES AWAY. Allowing businesses once again to COMPETE by becoming agile, efficient, and streamlined and setting their PRICES accordingly.
The COST OF LIVING will DROP folks. The 9% sales tax will merely level that out. Any other criticism that AVOIDS the embedded tax portion of the arguement is DISHONEST.
Because the Constitution already allows for the indirect taxation [See Article 1, Section 8, Clause 1.] which states “lay and collect taxes, duties, imposts and
excises…”
Well, I guess I’ll be the first to address the author’s proposal.
Basically, he proposes using a carbon tax (a tax on energy) instead of a sales tax. His main argument for doing so is that oil, etc., is already tightly inventoried, so this would make compliance easier and so on.
He also argues that a national sales tax would be regressive on the poor and hit fixed income households hard. These arguments have been debunked elsewhere, but I’ll save that. My response here is that these same objections (to the extent they are well-founded) apply to the author’s proposal of a carbon tax: higher energy costs (supposedly) hit the poor and fixed income people the hardest.
So, although his “easier compliance” reasoning has some merit, his reasoning on alleged regressiveness of the sales tax oesn’t really fly.
What needs to be analyzed here is what is the principle that Cain is trying to implement by the national sales tax? I see it this way:
1. EVERY American pays the tax.
2. EVERY American pays the same tax rate.
3. EVERY American is empowered to control how much tax he pays by regulating his purchases (beyond necessities). If he sees the need to Go Galt, the FedGov will feel it directly.
4. EVERY politician’s constituents will be affected by ANY tax rate increase. They will not be able to get away with voting to raise taxes on “the other guy.”
5. ANY tax rate hike will be clearly visible to EVERY taxpayer — it would be right there on your receipt for purchase. 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.
Any tax that accomplishes the implementation of those principles would be a great thing for our country. We would have vastly more accountability over taxation than we do now. And vastly more power to control how much we want to fund FedGov through our purchases.
Well, no. Contributions are a deduction, not a credit. If you make $50,000 then you will pay $4500 in income tax under the Cain plan. If you give 9% of your income to your church then you will pay $4095 in income tax (($50,000 - $4500) * .09)).
BINGO! See post # 94.
Will people on welfare pay taxes? Food stamps? Disability? What is this empowerment zone loophole Cain talks about? When you buy a house from someone, does that become a used item? Loopholes for charitable deductions? Which charities? In my state, we currently don’t pay sales tax on food - will we have to start?
These loopholes that Cain already has included are big enough to drive an army of Teamster-driven semi-trucks through. Do Cain’s supporters actually believe that by the time politicians get thru with this, it will be better?
Cain is a modern day flim flam man.
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