Posted on 10/13/2011 2:31:28 PM PDT by La Enchiladita
So what about Herman Cain's 999 tax plan? Turns out it has some very good aspects -- and some others, not so good. I'd give it two rousing cheers and one bronx cheer.
...But here we come to a problem.
Cain doesn't get rid of the income tax. Instead, he reforms it. And then he adds a new levy -- a national retail sales tax -- on top of it.
(Excerpt) Read more at freedomworks.org ...
Why? Why doesn’t he just get rid of the income tax at the start? The answer, most likely, is that if he proposed to eliminate the income tax in one fell swoop, while trying to raise the same amount of revenue as we do today, he would have to set the rate for the sales tax so high — well above 9% — that voters would balk. My guess is a national sales tax would have to be set at something closer to 25%, to raise the same amount we currently raise with the existing income and payroll taxes.***
Now, ask yourself: If you could be relieved of paying income and payroll taxes, would you be willing to pay a roughly 25% sales tax on everything you buy? Well, presumably that would depend on whether you’d be better or worse off, financially, right? The key here is how much you pay in income taxes under the current system.
•If you’re one of the minority of people — the top 10% of the population — who pay 70% of the income tax revenues, you might see the change as a good deal.
•But if you’re lower down the income scale, and especially if you’re one of the 50% of Americans who don’t pay any income taxes, then you might not see it as such a good trade.
•And if you’re poor, you might really hate it.
And that, I suspect, is why the so-called FairTax (the proposal to replace income and payroll taxes with a national retail sales tax) has never taken off as an idea. When people hear about that 25% rate, they experience a kind of sticker shock. They imagine, quite reasonably, that they could be worse off than under the current system.****
The second problem with Cain’s plan is more serious than the first. It puts in place the infrastructure for a VAT, a Value Added Tax. That’s bad.
No, that’s very bad.
A VAT is a form of national sales tax that is collected at every stage of the process from the initial sale of raw materials to a manufacturer to the final sale of a finished product to an end-consumer. It’s the most insidious of all taxes, because it is built into the price of everything and consumers can’t see how much of the price is due to the tax. When taxes rise, prices rise, but consumers mistakenly assume that’s just market forces at work. Politicians love a VAT: it lets them take a lot more money out of our wallets. And VATs usually exist side by side with income taxes, not in lieu of them. Taxpayers should hate VATs for the same reasons politicians love them.
European countries have VATs; we do not. European countries collect a lot more in taxes than we do. These two facts are related.
Blah blah blah who cares? 999 won’t pass!
It’s a starting point. Herman Cain is your best chance of getting a Fair Tax or a Flat Tax and blowing up the current Tax Code.
His plan would leave me with a “Fistful of dollars” and a “Few Dollars More”.
Well, thank God and Herman Cain, there’s no VAT tax in Cain’s proposal.
I trust these guys over some blogger.
Paul Ryan ‘loves’ Herman Cain’s 9-9-9 tax plan
http://dailycaller.com/2011/10/13/paul-ryan-loves-herman-cains-9-9-9-tax-plan/
Godfather of Supply-Side Economics Supports Cain’s ‘9-9-9’ Plan
www.humanevents.com/article.php?id=46828
Cain has done more good as a candidate up to this point than our legislators and president have done in a complete session of congress.
Yes let’s vote for Pissin’ in the Wind Perry. /s
For that we completely lose the Inheritance Tax, the Capitol Gains Tax, and the income tax is completely reformed, and there is no payroll tax for Social Security and Meidcare.
A pretty good trade IMHO.
Particularly when the package requires the passage of a provision requiring a 2/3rds majority to increase any of the tax rates. we do not have that provision on any of the taxes now.
At this point, I am for his plan.
Don’t forget that we lose the gift tax, inheritance tax, death tax...
I’ll be able to send my mom $1000 and it’s nobody’s business.
We need more clarification on this...and I believe groceries and medicine should probably not be in the mix...but will wait and see. At this point I know that it does not appear to be a VAT.
I think the Cain plan is a good starting point for discussion about tax reform. but I do have big problems with it. Personally I much prefer a repeal of the 16th Amendment, and then a national sales tax.
If people want a national sales tax to be more “progressive,” then perhaps we could have a program where people under a certain income level can apply for a partial rebate. But if they want the rebate, they should have to fill out a financial statement to prove they qualify.
As for everybody else, April 15 just becomes another day. The government can stop collecting personal financial data from us, and people will no longer be forced to sign a government-required financial statement under penalty of perjury, which is itself a violation of the 5th amendment ( regardless of what some liberal court says.)
9-9-9 may sound OK under a conservative president and congress, but how many years will it be before a “progressive” president and congress make it 30-30-30?
I am definitely supporting Cain in the primary, but I think this 9-9-9 thing needs a lot of work under a conservative Republican congress before I would support it.
Loons, congress writes legislation, the plan is the start, the flat tax is the goal. Congress without all of that cronyism and social engineering, a wonderful thing.
I knew and stated that we lost the inheritance and capitol gains...I did not know that we also lost the gift tax. That’s good...all the more reason.
Will there still be mortgage interest deduction? If not, I’m thinking that high priced homes might drop in price.
I have my doubts about the plan, but look—the Pubbie Party over many decades has done nothing to reform our tax structure, a structure which is the foundation of the Demonrat redistributionist soviet strategy. In fact, Republicans acquiesced in junk like the “earned income” reverse tax. The socialists will never be overthrown as long as they are guaranteed the votes of the 40+% of the population which pays no income tax.
My husband and I had a little debate on the food and medicine issue this morning. I agree with you that they should not be taxed. My husband said that this opens the door to what else would people want to exempt. He’s also worried that the gov’t would start to let some foods be exempt and others be taxed in order to try to get people to eat more ‘healthy’ - thus trying to engineer behavior.
I still don’t buy it. ALL food and ALL medicine (that includes everything from cold medicine to cancer drugs) should be exempt.
I was also wondering about so called ‘sin’ taxes. Would cigarettes and alcohol also be set at 9%? (I like that. I don’t want the gov’t deciding what’s good or bad.)
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