What Could Cain’s 9-9-9 Plan Mean For You?

ABC News ^ | 10/13/11 | Ben Forer

[SaraJohnson]

If you have a family of four with an income of just under $50,000, they could end up paying more under the Cain plan. Currently, they are taxed around $3,850 in income tax. Under Cain’s plan, they would be taxed at 9 percent or pay $4,500. That’s $650 more. Although the family would save almost $4,000 in Social Security taxes, it would have to give up the child tax credit worth the same amount. Furthermore, it would pay an additional national sales tax of 9 percent on everything purchased, including groceries and clothes, which totals about $2,000. That means under the Cain plan that family could end up paying $2,725 more.

[DTogo]

In other words, even many so-called "Conservatives" are falling for the class warfare rhetoric, and favor a "progressive" tax system.

What about:

- the payroll tax employers would no longer pay?
- the hundreds of billions in accounting and tax expenses employers and individuals avoid complying with the current tax code?
- the millions of man-hours employers and individuals avoid complying with the current tax code?
- the millions of Americans not paying any taxes now, if not getting a "credit," that would start having some skin in the game?
- the capital gains potential no longer taxed?
- the market boom that would increase everyone's 401(k) value?
- the investment boom in America that could allow this $50K individual to find a higher paying job?

[Drew68]

Does the state tax go away or what?

No. The states still get to charge their own sales taxes.

[Beagle8U]

“home mortgage interest deduction gone
child tax credit gone
business expense deductions gone”

You forgot...

Property tax deduction - gone

State and local income tax deduction - gone

Employee expenses deduction - gone

The list of lost deductions is endless.

[CynicalBear]

I’m thinking Laffer is a better economist with no agenda rather then a guy from the Lame Stream Media. Laffer gives Cain’s plan a big thumbs up. These Johnny come lately economist wanabes don’t impress me.

[SaraJohnson]

If we give politicans and special interests to go ahead to have loopholes, liberals will drive a truck through it. But I agree that a consumption tax target on food purchases would be harsh for the middle and lower classes.

Ending loopholes is the who purpose of tax code reform. A consumption tax is not going to be popular.

[justsaynomore]

Retirement income is not taxed under this plan - there is no double taxation.

[manc]

see post 13.

I would rather have the flat tax than this 9,9,9, which could go to 30,30, 30

Many elderly folks cannot afford to see another tax of 9% and no matter how this is spun then it is an extra tax

This is no quick gimmick like selling pizza, this is peoples lives and their money

seeing a Donald Trump have half of his taxes go down while those old folks see an increase is something which the left will use to destroy him and the GOP.

Get the flat tax which is better than this 999 plan , hell there is not even a way to stop this going to 50,50 ,50 in the future

[olezip]

“Relative to the current system, it is a big improvement,” William McBride, an economist with the Tax Foundation, told ABC News. “9-9-9 is fundamentally scrapping the tax code and starting over, and there is very good reason to do that.”

Scrapping the tax code and starting over is a great idea! Whether the start of the new code results in 9-9-9 depends on how long it takes to implement, whether it really is revenue neutral compared to the current system, and how many exceptions result in the simplified new system.

The Democrats love the idea of a national sales tax, just add it to the current tax code to give the Obama administration more dollars to waste.

[SoJoCo]

Now she will have a 9% tax on her.

More than that. She'll have her Social Security taxed at 9% as income. And an additional 9% on all her purchases. Should they send her a "Cain for President" sign now or later?

[3Fingas]

Agreed. I personally would like to see the 16th Amendment repealed and the US Government go back to tariffs and a national sales tax. Since that will never happen in my lifetime, I would settle for a flat rate income tax on all US citizens and corporations. Eventually, we need to shift away from Social Security and Medicare to tax exempted individual savings plans. But, I am dreaming on that one too. Who am I kidding — this won’t happen until the U.S. can’t borrow or print money anymore.

[RightFighter]

1. Regarding the child tax deduction - what you’re saying is that you’re all for redistribution of wealth when it is YOU that is receiving the distribution.

2. Regarding payroll taxes - if you’re self-employed, you’re paying DOUBLE payroll taxes - over 15% total, because you pay both the employee and employer portions.

[shortey22]

Everyone is forgetting another thing.

Cain also advocates the Chilean model of social security. That means, yes you won’t pay any payroll taxes *BUT* you would be contributing 10-20% each month to a retirement fund instead.

[hellbender]

There is no hope of stopping the govt. expansion racket and running the parasitic elite out of power until the roots of the racket are cut away, by making sure that everyone pays. Now almost half the population pays no income tax. Herman Cain knows that people respond to incentives and disincentives.

Jaime Ricardo "Rick" Perry thinks that giving subsidies to illegal immigrants does not encourage more illegal immigration. What a fool. Or what a scheming phony. One or the other.

Oh gosh. I'm so heartless. I lack compassion. Shame on me. /s

[justsaynomore]

First off - the SS model Cain talks about is OPTIONAL.

Cain is not lumping fixing SS in with 999. That is a completely different plan.

SS will still be funded under the plan, the base is bigger which is why payroll taxes can be eliminated. Kind of like how you save when you buy in bulk.

[Presbyterian Reporter]

Herman Cain needs to lay out the details of his 999 plan or start backing away from it.

I believe 999 eliminates charitable contributions as a deduction. That is probably a killer among conservatives who generally give much more to charitable organizations than do the liberals.

[SoJoCo]

If you don’t believe that prices will drop as the corporations have the heat taken off of them, then you don’t believe in supply-side economics, the free market and the laws of supply and demand.

So if GE paid no income tax last year, then wouldn't Cain's plan force them to raise their prices? By a LOT?

[mkboyce]

9-9-9 is not an end, but a beginning to the conversation.

This static analysis does not take into account that with a reduction in taxes, comes a reduction in the cost of goods and services and a more than likely increase in economic production. The family of 4 making $50K would probably end up earning more (and keeping more of it) in the long run.

[mazda77]

The biggest problem with all of the hits against the 999 plan and the eventual FairTax plan is that everyone assumes it is on top of what we already have.

Do any of you doubters ever to consider that getting rid of the Permanent Political Class might change things just a little bit?

That people just might see much more in their paychecks each week?

That those same people would be more keen to how much tax they are paying and in such keeping far more pressure on their congresskritters to keep taxes down?

That just maybe more people would be disposed to saving for their future and not relying on SS for their needs after retirement?

[goodnesswins]

NO...probably means they wouldn’t be able to give as much to DEMOCRATS! /s

[Marie]

How in the heck do you get both the EIC and the home mortgage deduction?

Every year that *I* have filed, it’s one or the other.

I’ve NEVER claimed my mortgage deduction because I get more money from the EIC.