Posted on 10/18/2011 2:41:08 PM PDT by Def Conservative
The Herman Cain campaign released details of the revenue expected to be collected from his 9-9-9 tax plan. Here are the estimates for 2010:
$701 billion from the 9 percent personal income tax. $753 billion from the 9 percent retail sales tax. $863 billion from the 9 percent business VAT. Yikes! By far the largest tax haul under the Cain plan would be from the business VAT—a tax which would be hidden from most voters.
By the way, the Cain business tax is not a tax on “corporate income,” as some media stories are identifying it. The new revenue data makes it clear that it is a tax on all value added by all businesses in the nation—corporate, partnership, and proprietorship.
Sorry Mr. Cain, I think your tax plan gives the federal government far too much room to grow in coming decades as entitlement cost pressures increase. I’d suggest dropping 9-9-9 and going with my 15-15-15 tax plan. After that, you could move on to proposing a detailed plan for spending cuts, as candidate Ron Paul has delivered.
American business-to-business sales are deductible from the business income flat tax as are capital investments like machinery purchases.
The ones claiming there's a VAT are Paulbots and other scaremongers.
As anyone can see there's no supply-chain consumption tax.
Well, spending is a problem in large part b/c half pay no income tax. Many of those pay no payroll tax.
No wonder they don't want a change eh?
Some plan that motivates ALL individuals to keep the cost of government down will have an effect on spending. That's why the wailing and gnashing of teeth about Cain's plan - it would bring everyone - EVERYONE - into being a taxpayer in such a way to make paying the tax painful. It should be.
Now I'm no fan of 999 b/c it keeps an income tax, keeps withholding, keeps taxes hidden in the prices of goods. But I am a fan of Cain. He started the discussion.
Hey, I agree with you. Government spending should be slashed immediately. By that I mean, cut 30, 40, 50%. However, every dime which goes to Washington in taxes is a dime too much.
Is it or isn't it?
None of Cain’s 999 plan has double and triple taxation such as in the current system.
But I think his plan actually taxes wages twice. Once in the corporate income tax on revenue that passes through to wages, and again on the employee receiving the wages.
A corporation with $100,000 revue, all going to wages (not making any money) has a tax bill of $9000, giving it a loss of $9000. The employees contribute pay another $9000 income tax.
Basically, as I read it (and hope I’m wrong, and support the plan even if I’m not) 999 includes a 9% corporate profits tax, plus a 9% payroll tax, plus a 9% income tax, plus the 9% sales tax. Essentially, the employer’s portion of the payroll tax is increased from ~7.6% to 9%.
If the oil companies ,beer brewers and the tobacco companies go from 35% to 9% in corporate tax, they will have to reduce their prices to the market. IE...gas $3 gal before excise tax may drop as much as 10% to $2.70 gal. The excise tax, sales tax and fed 9% would actually lower the cost at the pump by a few pennies.
I happen to think that an excise tax on guns and ammo is an infringement of the right to keep and bear arms.
Cain has not suggested these would be repealed that I have heard.
People claim the Fed Sales Tax is good because it “captures revenue from illegal immigrants” at the cash registers.
But don’t illegal immigrants pay MORE NOW with the “hidden embedded” 22% than they would under 9-9-9??
But it’s a good argument in the alternative.
I think the flat income tax is better than what we have now - but I'm not too keen on having a flat income tax and a national retail sales tax. Besides all the bad things about the flat income tax [keeps withholding, keeps hidden taxes in prices, and in most flat tax proposals it keeps FICA but maybe not 999] My hope is for the elimination of the income tax code entirely and replace the revenue with a national retail sales tax for ALL our needs.
I credit Cain for starting this discussion. So while I'm not wild about 999 I am wild about Cain.
What I like best about the 9-9-9 plan is that everyone pays the tax, not just those in the upper 50%.
You forgot that the current 35% tax is on profits, not income. Most companies have a small margin, so they pay 35% on a small amount of their revenue.
Cain eliminates their deductions, so they pay 9% on almost all of their added value. That's why most people who are studying the plan call the business tax a VAT, because it isn't a profits tax.
Uh, it better get sorted out pretty quick. According to Cain's 9-9-9 plan, the deficit reduction supercommittee is supposed to pass his 9-9-9 plan. They are done next month. So he has to have this thing written into legislation and submitted to them in the next few weeks.
Whem the best thing about a plan is how much it raises everybody’s taxes (except the 1% richest people), I’m not sure that is the conservative message I remember.
the author’s plan is a 15% corporate income tax. His plan doesn’t eliminate business cost deductions, so it is a tax on their net revenue, not on all their sales. That’s what makes Cain’s plan “VAT”-like, that Cain’s plan pretty much taxes ever bit of the value added by a business.
As an example, Cain’s plan taxes the money business pays to employees. That is deducted under the existing tax code. Of course, business pays the payroll tax on that money, about 7.65%.
But under the Cain plan, business pays 9%. That’s a higher tax on the employee income than before. Those who think business will pass the “payroll tax savings” to the employees obviously didn’t know that the corporations are getting taxed 9% on the employee wages, so they’ll actually LOWER the wages they pay by 1.5%.
9-9-9 needs to be fully debated, sent through committees, amended, and improved. But Cain doesnt’ want that. He wants the supercommittee to pass it next month, so the congress has to give it a straight up-or-down vote with no amendments and no committee debate or input.
Those are deductable now. But now businesses have a lot more deductions, and pay tax on their actual net income.
Under the cain plan, the busineess pays 9% on the entire value they add to a product. "value added" -- that's the definition of a "value added tax". It's not exactly like one, but it is close enough that the definition is better than calling it a corporate income tax.
The proof that this is so -- that by calling it a corporate INCOME tax, everybody is getting confused and thinking Cain is lowering business tax rate from 35% to 9%. But he's not, because the 9% is applied to a LOT MORE MONEY than the 35%.
All the “good” things about the plan are reasons a majority of voters will never support it.
9-9-9 would be a great plan if the government was a pizza company, and Cain was running to be the CEO, where he could dictate his proposals and his subordinates would carry them out without question.
That may explain why Cain’s method of passing the 9-9-9 plan is to have the 12-member supercommittee “pass” it. Either he thinks the supercommittee gets to approve legislation, or he understands that the supercommittee makes recommendations that congress can’t change in any way.
Of course, that committee finishes it’s work next month. So Cain better get this proposal to them quick.
At each step of added value in the production and distribution of goods a tax is paid.
Cain's consumption tax is at the retail consumer level; the end of the supply chain. Someone buying a pair of shoes would pay a 9% consumption sales tax. A steel producer would not pay consumption taxes because they are not the retail, end-user/consumer.
{One of many reasons we need to know more about the details.}
Like you understand the current tax code or the 5,000 changes in the code every year. Get a grip.
Oh Lordy.... You clearly haven’t been following everything I’ve been saying for days.
I am absolutely in favor of overhauling the current tax code. I am also in favor of NOT completely discounting or approving Cain’s plan without knowing more details. I have said several times, it is a good start to get the debate rolling, so that we can fix the current tax situation.
I don’t need to get a grip. I am firmly gripped. But thanks!
Yes, it’s not the sales tax part of 999 that is the vat. It’s the flat 9% corporate income tax. It is exactly a vat - a subtraction method vat. Look it up. I wouldn’t lie about that.
A VAT isn’t bad in and of itself - but when it’s combined with other taxes it is [see Europe.]
I wondered why Herman left the nrst and went with 999. It’s gotten him a ton of attention but why didn’t he just put forth the nrst or “Fair Tax”? The arguments against it are liberal ones.
But I’m still a Cain fan and I hope he goes to the nrst.
The value they add is their selling price minus the cost of materials, labor and overhead. Isn't that profit?
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