Posted on 10/19/2011 9:33:06 AM PDT by grumpa
Dear Mr. Cain. It is obvious that you better do something fast to change the perception of your 999 plan. It is a good basic idea but will die a horrible death if you don't answer the sincere objections to it. Below are the objections to the plan along with proposed changes:
Objection: The plan is regressive. Solution: Offer personal exemptions to the personal income tax, for example, $4,000 per person. So a family of 4 would not pay tax on the first $16,000 of income.
Objection: Having to pay 9% sales tax on the purchase of a new home. Solution: Exempt homes from the sales tax.
Objection: Retired seniors will be hurt because they do not currently pay payroll taxes which would be an offset to the 999 taxes. Solution: Exempt Social Security from the 9% income tax.
Objection: Certain very wealthy investors like Warren Buffet may not pay an income tax. Solution: Include capital gains as income subject to the 9% tax. Because of the recommended exclusion above, you will need to raise income somewhere else. This is the logical place to get it.
Objection: 999 could become 20-20-20. Solution: This plan needs to be accompanied by a balanced budget amendment and/or a federal spending limitation amendment.
Fundamental change can’t happen if we insist on staying inside the same old box.
Not a bad idea. While I prefer zero capital gains tax, a 9% capital gains tax is still 6 pts lower than the current tax (still would encourage investment) and truly levels the playing field.
I agree the current state of taxation in this country needs drastic reform. However your solution to the objections of 9-9-9 has the same fault as the current procedures. It includes exemptions and that is what is causing the current system to be so bad, too many exemptions.
Absolutely I can’t believe how many people here don’t understand the room companies will have to compete for better talent increase wages and reinvest in their companies with the elimination of many hidden taxes and will pretty much negate the 9% sales tax a lot.
My problem with the new tax plans (9-9-9, flat, vat, etc.) is not the plan itself. All of those are better than what we have now. I assume the plans would be tweaked to make them “fair”. The 9-9-9 could become 8-10-7 or whatever.
My problem is how do we get from where we are now to any new plan. I simply don’t see daylight there. Perhaps it will occur in small steps.
>>>>>“I’ve come to the conclusion that the American people and the voters do not want a national sales tax,” he said. “[Cain’s] going to have to replace that national sales tax with a 9 percent payroll tax. And if you do that, it’s a total winner.” LINK
Replacing the 9% sales tax with a 9% payroll tax is one step that would make some people support 999 more. But it won't be a total winner until the Fair Tax is dropped for the Flat Tax. We don't want anything that could be morphed into a federal level, European-style VAT, value added tax. One thing Cain's proposal is doing, fostering discussion and debate on the issue of tax reform and that is good.
CAIN: Well, let's talk about how I would address that same problem. I believe in empowerment zones. Most of the unemployed black Americans in this country are in these mostly economically depressed areas. It could be, and I'm only using this as an example, because we haven't finished establishing the parameters yet. Instead of in a designated empowerment zone, it being 9-9-9, it could be, as an example only, 3-3-3.
What this does, because you have a lot of African-Americans located in cities like Detroit, disproportionately, it would encourage businesses to stay in business there or to move there. It would encourage people to work there, because if you live in the empowerment zone, you're going to pay a smaller percentage in taxes.
Your calculator is defective. The idea that a 22% increase in consumer goods is currently embedded to cover the average 35% current tax, and this will decline to 6% based upon 22/35 of 9% becoming the new corp. embedded cost is excessively presumptive. Will corporations willingly give up additional margin?
Dear Mr. Cain. It is obvious that you better do something fast to change the perception of your 999 plan.
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You are wrong - right off the bat - you make an incorrect conclusion.
For better than a month now, Mr. Cain has made headlines with this 999 plan. It has vaulted him into the top of the polls. Even polls between Cain and Zerobama show Cain is leading. And the other GOP presidential wanna-be’s are playing catch-up - based on Cain’s 999. plan.
Even with a more than a month of intense scrutiny over the 999 plan the basic premise is still very good. Sure, there are kinks to work out, sure there are concerns. But the overall perception?
It’s fine. Relax.
See Art Laffer’s opinion piece on 999 which he endorses.
Note the statement on those below the poverty line...
http://online.wsj.com/article/SB10001424052970204346104576637310315367804.html?mod=rss_opinion_main
Am loving this discourse...
Agree with the very low income exemptions. However, even with these changes, 47% of people eligible to pay federal tax don't! Any reasonable change to “expand the tax base” will, by necessity, make some of these tax-takers pay. While absolutely necessary, a big hurdle to overcome.
Obama understands this - the more people that make out better economically (no fed taxes, handouts, welfare, health care - all for free!), even it if bankrupts the nations, he is counting on to be reelected. If it wasn't for that unemployment thingy (forget all the other O Disasters), he would be golden.
The lobbyists are coming out like flies on a fresh turd whining about how they all want to keep their exemptions or should I say corporate welfare...
It includes exemptions
Doesn’t the 999 envision “Empowerment Zones”? That is nothing more than exemptions.
So by starting the exemption game, again, this is a “golden opportunity...to true tax reform.”
Yeah, right.
Everyone should pay taxes, otherwise you create voting blocs that receive benefits via spending, but bear absolutely no burden. Just as people fear the rates of 9-9-9 could change by future legislation, they should recognize introducing deductions defeats the uniting purpose of flattening the tax code.
Objection: Having to pay 9% sales tax on the purchase of a new home. Solution: Exempt homes from the sales tax.
Actual solution: You buy a used home instead if you don't want to pay the tax?
Objection: Retired seniors will be hurt because they do not currently pay payroll taxes which would be an offset to the 999 taxes. Solution: Exempt Social Security from the 9% income tax.
Since social security is a welfare program, it makes sense to me to not tax it. Afterall, what is the point of collecting taxes, disbursing them, and then taxing that disbursement?
Objection: Certain very wealthy investors like Warren Buffet may not pay an income tax. Solution: Include capital gains as income subject to the 9% tax. Because of the recommended exclusion above, you will need to raise income somewhere else. This is the logical place to get it.
No, actually it is not. Taxing capital gains is deleterious to the accumulation of savings and the growth of individual nest eggs. The hidden cost (in unrealized future earnings on the taxed investment income) far outsize the actual net tax collection. One of the best things about Cain's plan is how it takes the federal leeches off the individual's ability to save and more importantly, grow those savings to provide for their own well being without government welfare programs.
Objection: 999 could become 20-20-20. Solution: This plan needs to be accompanied by a balanced budget amendment and/or a federal spending limitation amendment.
I haven't seen a balanced budget amendment worth spit, since they include exemptions for 'emergencies' like war, and in case you hadn't noticed we're perpetually at war. I wouldn't mind an amendment to increase the majority required to alter tax rates, but only after they're reformed down significantly.
“It includes exemptions and that is what is causing the current system to be so bad, too many exemptions.”
I agree.
Yes, as long as there is competition for customers.
It will also mean that, once again, the huge underground economy will be left untouched. No one I know who has a mostly cash business pays taxes on all of their income, and this includes some "staunch conservatives". The sales tax would make them pay up. Billions of dollars drug dealers and other criminals make is untaxed. A sales tax would bring in huge amounts from them. Cains plan is "balanced" in that it brings in tax money from all groups, including those who have heretofore avoided paying taxes. A payroll tax would be continuing the old way with the underground economy being untouched.
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