Nonsense. Payroll taxes are a business expense and as such are used to reduce taxable income. In your Cain world a dollar of income is, with few exceptions, a dollar taxed. Currently if I have a company with $1 billion in revenue and a 10% profit margin then I'm taxed on $100 million, maybe a maximum of $35 million in taxes. Under your Cain world then potentially I have $1 billion in taxable revenue, unless I operate in a 'empowerment zone' and less any goods I buy from U.S. manufacturers. For a company in a service industry like a bank or insurance company or consulting company then if I make a billion I'm taxed on a billion. My taxes more than double.
Unless, of course, this is also one of those "Cain really doesn't mean what he says" moments?
You’re a tax accountant, right? Lies come so easy to you guys.
Aren’t you forgetting the 7.65% payroll tax your company would pay on the $900M in payroll ? Remember, the 9% Business Tax replaces the payroll tax as well as the corporate profits tax.
So you pay $35M in profits tax, but $69M in payroll tax, for a total of $104M in Federal taxes.
So your $1B company would still get a $14M tax break — from $104M currently to $90M under Cain’s plan.