Posted on 10/18/2011 2:52:12 PM PDT by Def Conservative
The business portion of Cain’s plan apparently does not allow employers to deduct wages and salaries, which means — for all intents and purposes — that they would levy a 9 percent withholding tax on employee compensation. And that would be in addition to the 9 percent they presumably would withhold for the flat tax portion of Cain’s plan.
Employers use withholding in the current system, of course, but at least taxpayers are given credit for all that withheld tax when filling out their 1040 tax forms. Under Cain’s 9-9-9 plan, however, employees would only get credit for monies withheld for the flat tax.
In other words, there are two income taxes in Cain’s plan — the 9 percent flat tax and the hidden 9 percent income tax that is part of the VAT (this hidden income tax on wages and salaries, by the way, is a defining feature of a VAT).
(Excerpt) Read more at cato-at-liberty.org ...
Yup. The end user ultimately pays all costs, including taxes.
Screw you, surrender monkey RomneyBot!
BUMP
IIRC VAT’s under WTO rules can be rebated. This is another potential advantage.
It means a resetting of taxes worldwide unless they want to transfer their wealth to the US.
First they were calling the retail sales tax portion a VAT. That died down when people started educating themselves on what a VAT actually was.
Now their trying to call the 9% corporate income tax a VAT. I think that will die down when people start to compare it to the current 35% corporate income tax.
After all, if you're going to call Cain's 9% corporate income tax a VAT, what do you call the current 35% corporate income tax?
There isn't a VAT in the plan, and saying the 9% corporate income tax works like a VAT is not a valid criticism. Heck, I pointed out a while back that the current 35% corporate income tax works like a VAT, but for some reason you don't hear Michele Bachmann screaming about that.
First they were calling the retail sales tax portion a VAT. That died down when people started educating themselves on what a VAT actually was.
Now their trying to call the 9% corporate income tax a VAT. I think that will die down when people start to compare it to the current 35% corporate income tax.
After all, if you're going to call Cain's 9% corporate income tax a VAT, what do you call the current 35% corporate income tax?
There isn't a VAT in the plan, and saying the 9% corporate income tax works like a VAT is not a valid criticism. Heck, I pointed out a while back that the current 35% corporate income tax works like a VAT, but for some reason you don't hear Michele Bachmann screaming about that.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.