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.****
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”.
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
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.
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.
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.
This is from a conservative blog, so you Cain freaks can’t say it’s liberal media propaganda.
The important thing is that we are talking about Cain and his ideas.
That’s good news for Cain’s campaign.
VAT, FAIR, national sales tax—same thing. It’s the fastest way into the deeper end of socialism. Most people with incomes and time allowing them to participate much in politics now derive their incomes directly or indirectly from the debt regime of big government.
Refuse politics. Avoid buying anything that you don’t need, and become more economically independent. Learn to manufacture something useful as a hobby for now, even on a small scale. Starve the beast.
9-9-9 definitely needs some adjusting.
9% corporate needs to allow deduction of wages (less bonuses and buyouts) from gross income.
9% income tax needs to be on just 50-75% of income to be at the same level vis a vis middle americans.
9% sales has to have a staple foods exemption.
These come first to mind, so it must be broad to include all Americans, spending will still have to be seriously cut, and tariffs will have to go up to accomodate any shortfall in receipts.
Ni, ni, ni, ain’t gone pass, lass!
Why is everyone so myopic about this? I have a couple questions for you to ponder.
1. When you buy a good or service, what hidden factors are incorporated into the retail price outside transit cost and vendor markup?
2. What do you think happens to the cost of that good or services when those hidden factors are eliminated?
You are already paying far more in taxes than your payroll and income tax suggest...you just don’t know it because it’s all hidden in everything you purchase. ALL COSTS associated with producing a good or service (payroll, taxes, compliance, etc.) are handed to the customer in the form of higher prices. Raise corporate taxes and you are essentially raising the cost of the product and indirectly raising taxes on the consumer. Why do you suppose it cost so much to make anything in the US and why companies flee offshore in order to remain competitive?
All the 9-9-9 plan does is make how you are taxed transparent and easily paralleled to the economy instead of the giant boondoggle it is now.
Prices go down. Economy goes up. Corporations come home. Businesses hire more people. GDP explodes. Individual optimism and moral takes off. Standard of living goes up. It’s the 80’s all over again…without the cheesy hairdo’s and bangle bracelets.
Considering the are a few bad points among the good, I would be more inclined to look at the rest of Cain (and other candidates) positions. Cain looks pretty good over all. How about your candidate? BTW, I would not be unhappy with a Perry candidacy but he is not as inspiring as Cain.
Cain freaks?
Who are you a 'freak' of? Do tell.
I’ve always felt a flat tax is the best.
My proposal would be a 14% flat tax with the first $30,000 you make tax free.
If you make less then $30,000 then you don’t pay taxes BUT you also don’t get any tax ‘returns’ either.
Corporate rate set at 6% with the first $100 million free (net)
National sales tax is not a good idea at all. It makes all businesses and all members of transactions tax collectors for the fedguv. Having owned a business for most of my adult life I can tell you that state sales tax audits are every bit as onerous as IRS audits anf federal sales tax auditors will be able to reach unimpeded into interstate commerce at their whim including every transaction between any two citizens. Careful what you wish for.
Secondly Herman turns social security and medicare into full fledged entitlement, read welfare., programs by funding same with 999 general revenues. Under 999 nothing will distinguish Medicare from Medicaid since both will be funded from general revenues.
Is this really where conservatives want to go?
I like Cains boldness but I think the details and unintended consequences are undesirable. Like Paul Ryan I think the best route is the simplest, most efficient least intrusive tax and that would be a flat tax without the thousands of pages of bs.
I have a question that I haven’t seen addressed anywhere. If you eliminate payroll taxes, which includes FICA, doesn’t that imply that Social Security would have to be reformed or completely overhauled or replaced? Paying FICA taxes is what determines benefit eligibility and benefit amount. Is this part of the 9-9-9 proposal?