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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.

He’s running for president, not dictator. He won’t be able to eliminate the income tax and he’ll want to add a sales tax which of course congress will love because its another piggy bank and then they can keep increasing it. Add to that his silly response to Perry’s rock in Texas and I’m falling out of love with him and moving back into Perry’s camp.

” If you could be relieved of paying income and payroll taxes,..”

So, with no payroll taxes, what happens to SS? How are the benefits to be funded (from general fund?) and paid out? Will it be everyone to receive the same amount?

When will Cain’s new SS plan kick in and at what cut off age, 55, 45, ? What about those who have paid in the max every year for decades but not near retirement age, when they do retire will they find themselves drawing the same as a person who paid in vey little and those on SSI?

what about Medicare, will it be funded from the general fund? Will it devolve into Medicaid, or worse yet, become Obama’s single payer government scheme?

Until these and other questions are satisfactorily answered, Cain will get ripped apart into very small pieces.

One key advantage inherent in the 9-9-9 plan’s seemingly arbitrary and superficial number choice is that none of the taxes will be so large as to motivate serious cheating or avoidance.

Even the 9% income tax will be so low that few homeowners will really care deeply, or change their ownership choices based on the loss of the mortgage interest deduction.

They imagine, quite reasonably, that they could be worse off than under the current system.

Reasonably? Perhaps if one tries to "run the numbers" and do an apples to oranges comparison a person might "reasonably" believe they will lose under Cain's plan.

The problem is...it's not an apples to oranges comparison, our current system is closer to a chocolate covered pile of dog doo. It might look ok, and if you don't get too close, it might not even smell too bad. But there are not enough "rich people" in the universe to prevent our present situation from collapsing into an extremely smelly mess for everyone in very short order.

Afraid of the "what ifs"? in Cain's plan? My "what ifs" if things continue as is will be exponentially worse than any bogeymen you can come up with in 9-9-9.

And anyone who uses VAT in the same sentence as Cain's plan is either not understanding the difference between VAT and NST or they are deliberately attempting to mislead.