Posted on 10/19/2011 5:26:14 AM PDT by SueRae
It used to be that the sole purpose of the tax code was to raise the necessary funds to run government. But in today's world the tax mandate has many more facets. These include income redistribution, encouraging favored industries, and discouraging unfavorable behavior.
To make matters worse there are millions and millions of taxpayers who are highly motivated to reduce their tax liabilities. And, as those taxpayers finagle and connive to find ways around the tax code, government responds by propagating new rules, new interpretations of the code, and new taxes in a never-ending chase. In the process, we create ever-more arcane tax codes that do a poor job of achieving any of their mandates.
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CloseDavid Klein Republican presidential candidate Herman Cain's now famous "9-9-9" plan is his explicit proposal to right the wrongs of our federal tax code. He proposes a 9% flat-rate personal income tax with no deductions except for donations to charity; a 9% flat-rate tax on net business profits; and a new 9% national tax on retail sales.
Mr. Cain's 9-9-9 plan was designed to be what economists call "static revenue neutral," which means that if people didn't change what they do under his plan, total tax revenues would be the same as they are under our current tax code. I believe his plan would indeed be static revenue neutral, and with the boost it would give to economic growth it would bring in even more revenue than expected.
(Excerpt) Read more at online.wsj.com ...
Ping.
I tried the fancy ping, but it didn’t work for me!!
“You’re assuming that when the 22% of hidden taxes is removed, all this money will be added to the employees paycheck?
Some will be added to the employees’ paycheck. It will have to be. As the economy takes off, there will be MANY more jobs. Eventually companies will have to offer more wages and benefits to attract workers.
Some will be taken off the retail price of items, off-setting the pain of the 9% sales tax. This WILL happen as companies like Wal-mart drag the prices down with a quickness.
Some the companies will keep, as PROFIT. Stocks will go up, benefiting retirees and anyone else with a 401K.
Working people, shopping people and retired people will ALL win.
Laffer – 9-9-9 not a joke
by admin Posted on October 18, 2011
Arthur Laffer documents his thoughts on Herman Cain’s 9-9-9 plan. The debate was increasing frustrating tonight due to Bachmann, Romney and Perry routinely providing false and misleading analogies on Cain’s plan. Here is the math:
Current tax code: 25% income tax + 9% sales tax = 34%
9-9-9: 9% income tax + 9% federal sales tax (only on goods you choose to buy new) + 9% state sales tax = 27%
Now, the argument will be made that the poor now must pay 9% income tax under this plan. At what point should people have skin in the game? When 47% of the country pays no federal income tax and yet receive benefits beyond what this country can afford, are we supposed to seek our own financial demise?
http://theconservativethinker.com/wp/?p=1702
9-9-9 removes a minimum of 9% from the cost of the domestic product and adds 9% to the cost of the import product. Domestic manufacturing will boom. Sales tax on imports will produce roughly $80 - $100 billion annually, probably more. This is money that before was leaving for the originating country. The cost of US goods would drop by 9% making them more profitable and competitive overseas.
Made in America will become an avenue to revenue, lots of it.
Love the idea of repealing the 16th, but they already have a federal sales tax; it's called the federal excise tax.
When nonblack taxpayers are paying more to pick up the slack, yes.
Whatever happened to equal protection under the law?
Hope you get elected; good luck!
Your way of thinking is what has got us passing illiterate blacks through to a “college degree”. Once they are accustomed to getting paid for work that is not economically competitive, there’ll be no getting them or their businesses to compete by the rules and standards that the nonadvantaged taxpayers have to go by.
And oh, those companies who can’t compete against those advantages? I guess they’re just collateral damage.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises...but all Duties, Imposts and Excises shall be uniform throughout the United States; U.S. Constitution Art I Sec 8.
The critic you make of 9-9-9 applies even more so to the current tax code. The Feds can do everything you worry they would do under 9-9-9 RIGHT NOW. The same economic and political pressure that stop them now will be magnified by 9-9-9.
It is easier to raise tax rates now by hiding them as a “Tax on business” or making “the rich pay their fair share” then it will be to raise tax rates under 9-9-9 when everyone knows any tax rate hike effects THEM personally.
Sorry but it is irrational to argue that we must cling to our current failed corrupt tax code because any replacement will not be absolutely perfect.
They could save themselves the 9% by buying used. Funny how the "poor" can afford so much more than I.
Thanks for that, I’ll have to read later (site blocked from work)
I'm sure you meant, "equal abuse by the law," because being taxed is stealing out of someones pocket; and I do not wish that on anyone. Sure there has to some stealing from the federal government for the military; but that's it, let the states decide all other taxes.
According to your linked website, the 22% represents a hidden cost due to the 35% corporate tax. That part is true -- after deductions and loopholes, corporations pay about 22% in corporate income taxes, not 35%.
But the mistake made by the website is that this 22% is paid on sales. It's not. It's paid on profits. It's easier with actual numbers.
Say a company has $100 in sales and makes a 10% profit on those sales. At 35% corporate income tax, they would owe the federal government $3.50 ($10 profit X 35%). Under Cain's plan they would only owe 90 cents ($10 profit X 9%).
So under Cain's plan, the company would save $2.40. Now let's assume they choose to give the entire savings to the consumer in the form of lower prices rather than taking it for themselves or their investors. Sales would therefore be lowered from $100 to $97.60 -- a 2.4% reduction, not 22%.
Foreign manufacturers would not get this tax break since they pay no U.S. taxes. Their prices would remain the same. This means there would be no incentive for U.S. corporations to lower their prices when they know their foreign competitor can't.
Love your tagline.
I have had it for over a year.
“What he actually said was, “It used to be that the sole purpose of the tax code was to raise the necessary funds to run government. But in today’s world the tax mandate has many more facets. These include income redistribution, encouraging favored industries, and discouraging unfavorable behavior.”
This is a BAD thing.”
Yes, it is - but, this is exactly what 9-9-9 ALSO does!
If you think keeping the business and personal income tax while adding a sales tax will stop the Federal Government from doing the “BAD thing” you are delusional.
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