I'm sorry, turning every person, including your babysitter and lemonaid stand operator into a sales tax collecting agent for the federal government is WAY too much government participation in every activity in life.
It is bad enough I need to chronicle the aggregate of each quarter year of my life to the Fe'ral Government, but Cain wants each and every financial transaction to be public record with every i and j dotted and t crossed or face the violent and punitive police powers of the ever present State.
Furthermore, are you prepared to pay an additional 9% on your next house or car? Most people have a devil of a time conjuring up the 20% to satisfy the mortgage broker - how about coming up with an additional 9% - at the time of purchase - just to satisfy the Washington Monster?
Now extrapolate this to industry. If any capital improvement has an additional 9% toll placed on it that must be paid up front, how does that work out for a billion dollar energy facility, chemical plant or semiconductor fab?
Talk about forcing the manufacturing industry out of the country by levying a pay-to-play fee of 9% of total assessed value. Then because of the flat tax, NONE of it can be deducted for depreciation which really sucks when the startup isn't destined to make any profit for the first couple of years. They still have to pay the tax despite profitability. Yet another way to crush startups and expansion in the US.
Cain would be a bulldozer smoothing out the remaining standing wreckage of an economy following the wrecking ball and ANFO used by our government to Cloward/Pivens the existing one.
We don't need an encore to this botched performance.
I don't see your notion that every person is a tax collection agent.
Instead, we'd all be tax payers, all paying the same rate, ending the tax discrimination we have now.
I'm not saying the 999 plan's rates are exactly what we need. I'm sure the devil in the details (as Bachmann said) would need to be worked out long before such tax reform would land on the President's desk to be signed or vetoed.
Regardless, Cain's idea is a better than what we have now and if nothing else, we're talking about tax reform instead of 'taxing the rich' like we usually do.
40 of the 50 states have a sales tax now, but don't have the problems you describe.
Sales taxes are not collected on services (a service tax is called a service tax, it's a different thing entierly), that's why the babysitter won't be drug in. She is providing a service, so no sales tax.
All sales tax systems have a minimum amount of sales you must make before you have to start collecting sales tax. That's why the lemonade stand operator won't become a tax collector for the feds, they don't enough in gross sales to start collecting sales tax.
I don't mind a vigorous debate on Cain's plan (in fact I perfer it, it helps work bugs out of the system, and every system has bugs), but let's at least stick to facts.
40 states have a sales tax in place that works and is a model for how a federal sales tax would be implemented.
Instead of making wild accusations about what would happen under a federal sales tax, we should look first at how that potential problem is handled under the state sales tax system. Almost every time I've done that, it turns out there has been a simple solution to handle the "problem" for a century or more.
We're not reinventing the wheel here, we're taking about a system that has been in place at the state level for over a hundred years.