Ok. Then by far your largest expense is going to be labor and salaries.
What do you currently have to pay in FICA and Medicare taxes? That all goes away.
If that’s 15 percent, then the 15 would be replaced by the 9 for the corporate taxes, and the 9 for the sales taxes. So you’d be about 3 percent down.
How much do the employees make on average? What income tax bracket are they in? Salaries would be cut and would easily make up the other 3 percent, to have you guys run at lower costs. However, your takehome would be greater.
FICA has a cap.
Under Cain there’s a 9% tax on all employees period. Businesses pay half of FICA up to the limit, the employee pays the other half, again up to the limit. I’d guess but I’m not sure that the 9% employee tax is a wash under either tax method for employees that make up to about $100k a year. Cain’s tax cost to businesses would then be about double what it is now on employees that make $200k a year.
Another point. If your net profit is 20% of the cost of goods and the cost of goods go up 5% overall (9% component cost increase) your net profit just dropped to 15% - or a loss of 25%. Cain’s 9% income tax won’t fix that.