My Mom has a modest retirement income (SS + some $$ from a private plan) and she most certainly pays income taxes. (I know because I do her taxes for her each year.) As best as I can tell, Cain’s 999 plan would be about a wash for her. This assumes that most of the dynamics work the way Cain says they would, and that part is admittedly a guess. I’m no expert. But, I do know you can’t really evaluate his plan statically. That may be a problem in selling it: It’s not that easy to describe all the dynamics of a plan like this in 30 or 60 seconds.
Regarding food, at least some states (including ours and our closest neighboring state) have very low or no sales tax on most basic food items. I’ll also admit I don’t know how prevalent that is. Anyone care to add data? :-)
It would be a “wash” for most people, except that the cost of most goods and services would go down in price as businesses wouldn’t be burdened with such a high tax rate, and the economy would become “healthy” again in a very short time.
People would be spending money again, buying things, American made things, and businesses would be able to expand, hire more people, which would also contribute to a growing economy.
Regarding food, at least some states (including ours and our closest neighboring state) have very low or no sales tax on most basic food items. I’ll also admit I don’t know how prevalent that is. Anyone care to add data? :-)
Yes, that is true that a lot of states do not charge sales tax on food. But with the Cain 999 plan, those that do not currently pay any sales tax would then be taxed 9 percent on food, whereas before they didn’t pay any tax on food in those states.