With my income, 9% would make it my largest expense outside rent and food. Then, adding 9% sales tax on all purchases would mean an effective increase of more than 14%.
Where is the savings for the millions of people just like me?
>> “Where is the savings for the millions of people just like me?” <<
.
None!
A sales tax in grossly unfair to the elderly, and the disabled.
A national sales tax would be a moral abyss.
It's in the saving of the Republic. You realize what will soon happen unless the trend of the current tax code is stopped cold?
It used to be just 35% who didn't pay any federal income tax. Then 40%, then 45%. Now it's 49%.
Guess what happens when it becomes 51%? That's right, a tyrannical free-loading majority will start winning every single election, and we taxpaying suckers in the minority won't be able to stem the massive growth in federal spending and taxation demanded by the freeloaders.
Ask the retired fixed-income folks in Greece whether they're looking forward to the $hit storm that's heading their way. That's your future under this currently bankrupt tax code.
Under 999, everyone will have to pay some federal income tax. Everyone will have skin in the game. And everyone will think twice about voting for the pol that promises all these great new federal spending programs.
In the lower business cost lowering the price before the tax. Even the plumber call could be a bit cheaper because of lower business costs.
Another factor is that Social Security payments will collapse unless it gets capital. As Goldwater said, there will come a “break point” where we can't “muddle through” anymore.
Parts of Cain's plan will be nasty tasting medicine but we're not just facing stagflation, hyperinflation, or recession. It is now possible to forsee the financial house-of-cards falling so fast that a complete chaotic monetary collapse darkens America. We need a sharp change in direction or a true disaster in the markets could make the crash of 1929 look like a mild downturn and 1934 seem like the Good Ole Days indeed.
Not in 9-9-9. I'm with you.
Don’t know,you vote your conscious,I’m no spring chicken myself.
I personally think taxing food is a bad idea (we don't tax it in CA but some states do), some in the press suggest food and medicine would be taxed, but on his website presently there's not enough detail to know whether those items would be included or what mitigation there would be for low or fixed income situations. That's coming according to his chief economic advisor.
One of the "savings" is 9-9-9 will eliminating considerable levels of hidden taxation that you already pay in prices. This is why Cain makes the point critics are making assumptions based on circumstances in place under the existing tax code.
Ultimately Cain sees 9-9-9 as a gateway to the "Fair Tax" which is a national sales tax only. Such proposals often have a "prebate" system to address low and fixed income situations.
See my post #91.
My mother is on SS. I don’t want our elderly to be in a bad spot. I want them happy and retired and taken care of.
999 will NOT hurt the elderly. Quite the opposite.
You are already paying far more than 9% in hidden taxes that are imbedded in the retail price. Your new item purchases should be about the same. (It’ll probably take a couple of months to kick in, but the prices will drop.)
The other thing to realize: If we do nothing and try to maintain the status quo, the system will collapse and eventually there will be nothing for any of us. We must implement a plan that is close to this or we be seriously screwed. We can’t continue as we have been.
I have no idea if your SS will be taxed. I can’t see congress passing a bill that doesn’t at least exempt the first $20,000. Do you? The out cry would be deafening.
That’s why we can’t sit back on our laurels and just trust *anybody* to do the right thing. We’ve got to stay on top of them the whole way.
I'm paying 28% fed, 10% state(CA)/8% state(ID) plus social security/medicare and CA state sales taxes of 9.25%. Cain's 999 might put 10% back in my pocket. It won't have any impact on my property taxes in ID...other than possibly removing them from consideration in the calculation of federal income tax AGI
Where is the savings for the millions of people just like me?
Not to mention, that if you're in a state that has high sales taxes AND Income taxes you get nailed even worse. Cain's plan is just shifting deck seats on the Titanic. It gives the appearance of being a smaller tax when it probably wouldn't be for most Americans.
Under the current system, most middle class Americans pay about 25% income taxes if they make between $35,500-84,000 per year. (And because of tax deductions Americans often pay less than that rate). Most Americans pay the current rate of 25% plus their state income taxes which averages about 6% across the US. They also pay about 6% in state sales taxes on average. If we assume that an American spends all of their income in a given year that means they would be Sales-taxed and Income-taxed about 37% of their income if they don't claim any deductions or tax credits. If they claim deductions, this percentage of income paid out in taxes can be substantially reduced from 37%.
For example, if a person makes $35,500 per year and receives a $2485 tax refund, they are only paying about 30% of their income in taxes while a person making 84,000 who receives a tax refund of $5880 would also only be paying 30% in taxes rather than the 37% rate. So if your tax refund for a year is 7% or more of your annual income you'd only be paying about 30%.
If Cain's 9-9-9 tax proposal was adopted at 9% on the Federal Level, and you lived in a state with a 6% Income tax rate You'd end up having to pay 15% of your income in state and federal income Taxes plus 15% in state and federal sales taxes. So if you are just an average middle class person who makes $35,000-84,000 per year, you would end up paying about 30% of your income in taxes if you spent all of your income in a given year. Also, from what I understand, Cain's proposed system will not give you any federal deductions and tax credits. Thus if you save more than 7% of your annual income through deductions and tax credits, you would be better off under in the current system than under Cain's 9-9-9 plan.
So I don't see how the average person is better off under Cain's plan than under the current system. Most people would likely be paying about the same percentage of their total income in sales and income taxes under both systems, it's just that Cain's plan plays number games by dividing one big tax into two smaller tax rates which makes it look like the governments are taking less of your money when their not.
Instead of hitting you with one big 18% income tax, it just hits you with two 9% taxes which are both being placed on the same income. One of those tax rates taxes your income when you make it, and the other taxes you for using that same income. (Thus it's arguably a form of double taxation.) Those on fixed incomes like Social Security will suffer the most because a sales taxes tend to be regressive if they don't grant tax exemptions for food, rent, medicine, etc.)
It is also foolish to add a national sales tax while we still haven't repealed the 16th Amendment and the income tax. Having both a sales and income tax is like having two income taxes simultaneously for the reasons mentioned above. Also, the sales tax won't be kept low long. A new tax generally starts out low and then increases rapidly until the tax rate is crushing. When the income tax was first adopted in 1913, it was sold to Americans as a tax of only 1% that would only fall on the richest Americans. That sure changed quickly. The rate was jacked up in the Great Depression. In fact, in World War II those who made more than $200,000 were taxed at 96% and the rate stayed around that number until President Kennedy lowered that rate in 1962! In any case, that 1% tax of 1913 has grown to 25% on the middle class today. What's to stop the Government from raising a 9-9-9 tax to a 20-20-20 tax?
I'm in the same boat, but will go along with 999. The flat tax on corporations does away with the "one hand washes the other" current business tax deductions in exchange for campaign contributions and frees up money for R&D and jobs. It takes that power away from the pols, so I am willing to take a hit.