“Cain’s problem was double-taxing savings, because you paid full income tax, and then have to pay the 9% sales tax. Along with implementing three separate taxes, all of which could easily be raised, putting us in worse shape.”
The 9 percent sales tax was replacing embedded taxes we already pay for. These are taxes businesses are paying right now that are simply passed down to the consumer. On top of that, the 9 percent is only on what you spend. Unless you’re spending every dollar you bring it, it’s not 9 percent again on your entire income. There was also no sales tax on used items.
Of course, it doesn’t matter now. Cain ain’t coming back.
You eventually spend every dollar you make — or else you lose it somehow. It’s not useful as wall decoration.
Under the current tax system, you got taxed when you earned it. If you then replace part or all of the income tax with a sales tax, those people who have money in the bank that was already taxed will now pay tax again when they spend that same money. To be fair, you have to have some way to deduct from the 9% sales tax money that is spent from current savings. Unfortunately, that would be a complicated task (it can be done — do a one-time survey of people’s life savings, and then allow them that much deduction on their income taxes, spread out over the years like the cap on capital losses).