Take an average family in this country - husband, wife, and two kids. Give them the median family income of $49,500 per year. Now look at their taxes. Individual deductions are $3650 for each person, standard deduction is $11,400 for a total of $26,000 in deductions and a taxable income of $23,500. That gives them an income tax of $2687.50. The current child tax credit brings that down to less than $700 in taxes. The Make Work Pay credit brings them to zero. So all our family pays is the Social Security and Medicaid taxes of 6.5%, for a total tax bill of about $3200.
Now lets look at them under the Cain plan. No individual deduction. No standard deduction. No credits. Just a flat tax of 9% for a tax bill of $4455. That's an increase of $1255 in income tax alone. But Cain does allow a deduction for charity, so let's say that they tithe 10% of their income to their local church so they can take advantage of the one deduction Cain's plan allows. That reduces their taxable income to $44,550 and gives them a tax bill of $4009. Still an increase.
Now, of that remaining income available to them, our couple will pay an extra 9% on everything they purchase. Every article of clothing. Every bite of food. Every service they contract for, including rent if they don't own their own home. That's easily another $3000 or so in taxes. So under Cain our couple has seen their taxes go from about $3200 to upwards of $7000. Their taxes under Cain easily double.
Can someone explain why anyone would vote for a man hell-bent on doubling their taxes?
Good work SoJoCo, maybe your example will sink in a little bit better than my example.
You are leaving out the reduction of business income tax from 35% to 9%. Businesses don’t pay it. It is passed on to customers. So it effectively is a sales tax. It is just hidden. The way Washington likes it.
Reduction of business taxes will make American built products cheaper for foreigners as well as Americans. American manufacturing will surge. So will jobs and pay.