My son was griping about this plan. The idea of paying 9% in income tax and an additional 9% in sales tax stuck in his craw.
My daughter broke it down like this:
On her last paycheck, she earned $415. She was actually paid $359. So she paid 13.5% in federal taxes. (With Cain, she’d pay less)
She’s trying to save up for a cheap, used car. If she saves that money, she won’t have to pay the 9% until she spends it. (She won’t pay anything in taxes for a used car - only if she buys new.)
I told him that I liked the plan because it rewards savers.
I then pointed out to him that he uses Coin Star to cash out his tips. He’s paying a 10% surcharge because he’s too lazy to count and roll his own money. I told him that, if 10% meant that much to him, he’d do it himself. (He’s now sworn off Coin Star.)
If Cain’s 9-9-9 plan is anything like the Fair Tax, the products will only be taxed at the retail level. this means that overall prices will go down and it may end up being a wash. (Plus the 9% corporate tax that’s passed on to consumers)
I love the simplicity of the plan.
Sounds like he may have a gross/net knowledge problem. :->
He probably is already paying close to or even more than 9% in sales tax depending on where he is but that would bring income tax down. The good part is that with sales tax, you can control how much you pay through wise purchases or people can even barter if they feel the government isn’t spending their money the way they want versus just confiscated via income tax.
I hope you pointed out to her that the BHO (& auto industry)
cash-for-clunkers program to encourage new car purchases
required the destruction of the used cars traded in, depleting
the stock of available used cars, driving up the price of
"previously owned" vehicles, usually bought by people with
lower incomes?
So, in effect, her tax dollars went to making her desired purchase
more costly.