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.
I don't think the solution to the deficit lies in the best and fairest method to come up with $3.82 trillion for Congress to spend.
Which candidates are most likely to cut spending, the ones with lots of interests funding their campaigns or the grass roots candidates?
I hear ya. But since Cain's revenue plan comes in about $1.5 trillion light, I'd much rather focus on spending cuts first. Once we have a balanced budget, then we can debate a new revenue plan to pay down the debt.
It's way too tempting for Congress to say 9-9-9 should be implemented at 13-13-13 to avoid increasing the national debt.
Value add includes the cost of labor and overhead.
Gross profit is basically sales minus expenses, which would include physical plant overhead, labor, and materials cost (along with a few other things).
Value Add is basically the sale price of an item, minus the material cost (which would have been a “sale price” to the supplier).
Cain’s plan doesn’t allow business deductions, so the labor and overhead are taxed. That makes the tax apply to the costs of the business in addition to the profits, which is why it is more like a value-add tax.
What we don’t know is whether Cain’s plan allows business deductions for capital costs (things purchased not FOR the product, but to help produce the product). We know he taxes labor and other normally deductable items, but there is not enough detail yet to know whether he left any deductions.
Whoa! With a service company like a law firm, accounting, architects, etc. that's all there is.
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