Since Cain has offered no tax caculator site to refute this kind of analyses of his tax plan, the media gets to define and caculate it for him.
Although simplifying the tax code is an important part of ending government corruption via buying loopholes, it will be protrayed as a tax increase on the middle class at a time when the middle class is suffering under the weight of this economy. It also is slammed for introducing a new consumption tax that we all know would not stay stagnant at 9%.
The 999 plan is a very weak campaign centerpiece when it comes to the general election.
This isn't the half of it 9-9-9 is an economic apocalypse for retirees and anyone who actually earns money. First the plan institutes a national sales tax WITHOUT GETTING RID OF INCOME TAX. This is an idea that bureaucrats have been salivating over for decades. Anyone want to bet how long it would remain 9-9-9 before it went to 23-23-23 (but only for the "rich" so that they could pay their fair share.) But leaving out the utter insanity of adding a whole new CLASS of federal tax there is the effect of a wealth tax on anyone with actual wealth (savings for you Cain supporters who blindly follow without doing the math)
Take Joe and Fred both who made $125,000 for the last ten years. Joe is frugal and saves. He's saved $500,000. Fred puts every penny on lifestyle. has a couple of hundred in savings. They both have similar families and have paid the same amount of taxes. Joe's savings have already been taxed. Fred has spent his money. Now what happens to Joe when he goes to spend his saved money? He only gets to spend $455,000 because his savings (wealth) are taxed again. Fred OTOH doesn't have this problem because he's spent every penny as soon as it hit his hands.
Now multiply this effect on retirees savings and you'll sw how the ones who actually worked and didn't plan to sponge off the rest of us will get screwed.
Now look at European countries with both income and sales taxes. They are able to plunder 40% - 48% of their GDPs because there is no tax avoidance strategy that works for a sales tax. Contrast to the USA where the government "only" loots 19% of the GDP because of the various ways to avoid income tax. 9_9_9 is economic folly on an unprecedented scale.
Lying by omission is still lying.
Cain also eliminates their medicare and payroll taxes therefore they pay less, not more.
So once again the Obama protection agency at ABC is knowingly lying about 9-9-9
This crap being peddled by ABC news takes the normal libtard approach that economics operates in a static vacuum as a zero sum game-- i.e. if you raise cigarette taxes by $1 per pack, it will produce revenue equal to $1 x the number of packs we expect to sell next year with the current rates.
In the real world, economics never works like that. People adjust their habits and behaviors to avoid or minimize taxation.
Corporations would do no different. The tax savings would mean (among other things) producing more in America and moving jobs back here where taxes are lower. Consumer prices would have to fall, not only to combat loss of sales from increased sales tax, but to reflect savings from reduced corporate taxes.
Consumers, even at the low end, might actually be better off than they are now.
To make the thing politically salable, the plan would include a rebate or tax refund going to those below a certain income threshold to the point that just about everybody would be getting refund checks (or direct deposits). This would be true even for those on the high end (for their first $40K or whatever threshold is set).
It might actually become increasingly popular as taxpayers would be getting in on a monthly bonanza of what they normally only see during tax refund time, albeit in smaller chunks.
Cain is a first rate mathematician. He understands the details of these things far better than your average English major writing for the MSM with a leftist agenda. Given the opportunity (and from what I've seen so far), I believe he can also explain it better as well!
All he has to do to modify the plan is to have generous exemptions. This is how Steve Forbes’ flat tax worked. Problem solved.
Get the facts straight from Herman Cain:
http://www.hermancain.com/999plan
Herman Cain 999 calculator:
http://www.nerds4cain.com/Blog/archives/723
For a realistic view of how it works:
■If you get a paycheck from an employer, then your employer pays half of your payroll taxes behind the scenes. It’s part of your pay that’s hidden from you in the current system. This tax goes away under the 9-9-9 plan, so the money will start showing up in your paycheck (yes, your paycheck amount will go up under the 9-9-9 plan by 7.65%).
■Amount not spent is the amount you don’t spend out of your income, so there is no sales tax on it.
■The maximum effective tax rate under Herman Cain’s 9-9-9 plan is 17.19%. This only occurs if you don’t put any money into savings and spend every dime you earn.
■When doing your calculations for your current income, don’t forget that the payroll tax (which is 15.3%) will be eliminated under the 9-9-9 plan. Consequently, the maximum tax increase anyone at the low end of the income scale might see under the 9-9-9 plan is a mere 1.89%.
Go HERE for the most accurate and well described calculator I've seen of the plan - which I've read thoroughly.
I want to know if things like the 18.4 cent per gallon federal tax on gasoline would go away under Cain's plan.
But like I've said before, it may not be the best plan, but it's a start, and it gets people talking and thinking about what our other options might be. We all know we can't continue down the same path. Cain is the only one proposing something drastically different. Still waiting for other/better ideas to surface. (And certain people on FR keep bashing 9-9-9, but they certainly don't offer any better solutions.)
Agreed. It hasn’t gotten traction yet, but the 999 plan is going to sink Cain unless he modifies or drops it. The alternative Democratic plan codenamed “soak the rich” is at least built around the knowledge that the rich are a tiny portion of the electorate.
The best attribute of this plan is it opens the door to have a rational debate about the existing structure.
Current taxes < 9% of gross income, then you lose. Or Current taxes > 9% of gross income, you win. SInce the current Payroll tax is 15.2 % of gross income you are likely to be paying less.
The only issue is will you lose that 6.2% by paying a national sales tax. First after all the regulatory taxes and fees are removed from business we should actually see a decline in prices, it could turn out to be a net gain for you, at the worst a wash.
The fractured argument about providing a new pipeline to revenue that would be certain to go up. Boner said last night that there are 5000 changes in the tax code every year, these are not deigned to cut your taxes.
The whole code could be written on a single sheet of paper, putting thousands of tax lawyers and tax accountants back in the work force.
If they decide to spend more than they make, you would know immediately because your taxes went up visibly. That is what elections are for. Plus he wants a two thirds majority in both houses to raise taxes.
Now in reality you can ignore the 9 9 9 plan altogether, there is no way the establishment will voluntarily give up all their secret sources of revenue. Else how could they all go their broke and leave rich?
But just the thought of trashing the entire TAX code sends a tinkle down my leg.
You lose money constantly by means that you can blame anyone but Congress. They add fees or regulatory compliance expense to industry which the consumer will ultimately pay for. The hardest thing to try and explain to most people is the fact that corporations do not pay tax, they collect tax for the government.
Example; You make widgets at a total production of 75 cents, you sell that widget to the public at $1.00. Government bureaucrat notes that there is a big widget market (Think Cigarettes) so they say maybe we should put a special tax on those widgets, so they decide they should themselves make a profit of 25¢ on those widgets. Now ask yourself will the widget still sell for $1.00? If not, then who will be the loser? Of course the Widget manufacturer could do like Solyndra and figure to make up the loss on volume, but I think we all know the price of the Widget will have to increase by at least 25¢ and likely more because he can then blame the government and pretend to have a clear conscience.
Especially if they spend some of their income on foolishness like food, fuel, etc.
The real downside:
Even though Cain intends the 9-9-9 plan to be transitory, does anyone actually believe that once we have a federal sales tax and an income tax in place at the same time the greedy scumbag, Big Government politicians will ever eliminate either one?
The professional pols in both parties will never let go of a new source of revenue to pay off pals and buy votes.
Yes it’s going to cost some people more. The 47 percent of filers who pay no federal income taxes will at least pay something under 999. No I have no problem with people paying no taxes, it letting them vote that bothers me.
We’re in a fairly high bracket, and break about even.
No thanks on the 9% consumption tax. Cain is doing really well and I’d have no trouble voting for him if he won the nomination, but I oppose 999. Lets just focus on reducing taxes/regulation and curtailing entitlements. This 999 stuff has no chance to pass, and Cain is going to have to start making himself known for something else because once the public really understands 999 it is going to flop badly.
999 means to me that if Cain is nominated I’m not voting for him.
BS.
I just ran the numbers. Do it yourself, if you'd like, on any number of websites. $50,000 income, married, filing jointly, two children as dependents, standard deduction only. Total tax owed: $2690. If both children are eligible for the standard child tax credit, the amount owed would be $690.
To promote this story line, ABC used a filing status of either "Single/Married Filing Separately" or "Head of Household" and ignored tax credits, which would yield taxes of $3985 or $3398, respectively.
This is a dishonest attempt to only focus on the income tax and avoid addressing the fact 9-9-9 scraps all the other Fed taxes these people currently pay
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.”
Wow