Libs don’t like simple.
>>From the last paragraph of the article:...assuming prices stay stagnant when all indications are that prices will lower under 9-9-9 due to less tax burden on businesses.<<
Biggest mistake in the article.
The way Cain describes the 9% “corporate” tax, it appears to be essentially a Value Added Tax (VAT) rather than the current corporate income tax.
As it’s described on his site (when I last checked), the 9% tax would be applied to adjusted Revenues, not Income, and the adjustments are mainly raw materials, products, utilities, etc., purchased from suppliers. Labor is not an adjustment.
So, in effect, all of the value added to the resource inputs is taxed at the 9% rate. This could be a higher tax than the current 35% corporate income tax. For example, it would almost certainly be a higher tax when a company is operating at breakeven or even a loss, and paying no income tax at all in a down year. There would likely still be some tax owed at the 9% rate under Cain’s plan, however.
I’m not saying this is a bad thing, by the way. It’s just that people are consistently confusing Cain’s 9% corporate tax (which is close to a VAT) with the present 35% corporate tax (which is paid only on net income), and are concluding that companies will pay much less tax as a result, but they’re wrong because they’re comparing apples and oranges.
When considering lower income households, I think the combination of the 9% sales tax and 9% income tax will offset the savings from not paying the FICA tax, and the 9% corporate VAT will come close to raising as much as the 35% income tax.
I also think that the 9% corporate VAT tax might be a better tax, because businesses operating on the 35% tax are always evaluating expenses like corporate perks and salaries as though they were only costing 65%, with the feds picking up the other 35%. Once that cut dropped to 9%, the shareholders would eat the 91% of the cost of that box suite at the ball game, instead of just 65%. This would likely cause businesses to pull in some of the more outrageous expenditures, at least in some cases.