Posted on 10/13/2011 7:18:11 AM PDT by SeekAndFind
REPUBLICAN PRESIDENTIAL candidate Herman Cain’s 9-9-9 tax plan was the centerpiece of Tuesday’s Post-Bloomberg debate. Mr. Cain claims his proposal is a “bold plan to grow this economy” while getting the debt under control. His opponents warned variously that the plan would never pass (former Pennsylvania senator Rick Santorum) or that it would (Minnesota Rep. Michele Bachmann), giving Congress the “pipeline of a new revenue stream” that would inevitably be cranked higher.
Mr. Cain’s plan is problematic, but not for the reasons his fellow presidential contenders claim. Rather than putting the country on a sustainable fiscal path, it risks not producing enough revenue to fund the government’s needs. It would turn the current progressivity of the tax code upside-down, giving a windfall to the wealthy and hiking the tax burden for the least well-off.
Mr. Cain would junk the existing, Byzantine structure of rates and deductions in the individual income tax code. He would end the estate tax, the payroll tax to fund Social Security and Medicare, and the capital gains tax. Instead, individuals would pay a flat tax rate of 9 percent; the only deduction that would remain would be for charitable giving. Businesses would pay corporate taxes at the same 9 percent, instead of the current 35 percent. And there would be a new national sales tax set at, you guessed it, 9 percent.
Would this produce enough revenue? Mr. Cain, without providing details, insists that it would produce as much as the existing tax code. “We have had an outside firm, independent firm dynamically score it,” he said at the debate. Leave aside the point that the current tax code does not generate adequate revenue to meet the needs of an aging society.
(Excerpt) Read more at washingtonpost.com ...
Regardless of what tax structure and rates were in place, for the last 110 years, Federal Revenue has been between 18% and 20% of GCP. Herman’s plan would create a net of 18%. If that is not enough, then make it 10-10-10 and you get a net 20%. If you like, 9-9-10 would get you 19% or 10-10-9 would get you 19%. Take your pick. Federal revenue has never been higher than 20% because whatever changes Congress makes, the markets adapt their behavior to the change.
Wrong. Somehow, we rationalize that it's perfectly ok to steal from one and then give to another, while keeping quite a bit for ourselves along the way...expenses, doncha know.
I am for a plan that removes fiscal discrimination and legalized theft from the tax code and replaces the old with a new plan that taxes all equally.
At least he came out with a plan. That’s more than any of the others, including Obama, has done. No plan is perfect in it’s initial stages but it is a basis for discussion and should not be dismissed upon first review.
No, what it would do is get at least part of the 47% of the workers in this country that are essentially tax freeloaders, forcing them to pay at least a pittance for the massive services that they steal from the taxpayers every year in the form of welfare, school lunches, food stamps, EIC, and other forms of help. There is no logical reason that wealthy people, those that have earned more, should have to pay a higher percentage of their income in taxes than the freeloaders that survive because of them.
In fact, there's good argument that taxes should be charged on a per-person basis rather than based on income, spending, or any other such formula. How about everyone just pay $10,000 each, right off the bat. Everyone pays the same for a burger - why shouldn't everyone pay the same amount of tax?
They say this like it's a bad thing. I think it's time for the freeloaders to chip in and start paying for some of the benefits they have. Further, if they don't have an income, no problem...but they shouldn't have the right to vote, then, either.
Also, these "shortfall" issues are predicated upon two erroneous assumptions. First, that the current level of spending prevails. To the extent that the gutless wonders in DC make real spending cuts, any shortfall is reduced. If their stones are big enough, it could be negative. Second, Cain's plan would stimulate growth, reducing some entitlement claims (e.g., welfare, food stamps, housing and other subsidies) plus increase the amount of tax revenue coming in as unemployed workers get back to work. Finally, this kind of tax structure would bring home some of the jobs that have been exported due to the punitive tax structure here in the US. Couple 999 with a real reduction in the regulatory burden imposed by the US, and this place would see an economic takeoff like we've never seen.
The WP can't think beyond seeing their stupid leader facing unemployment in a year, hence the shallow thought process shown in this article.
“Mr. Cain, without providing details, insists that it would produce as much (revenue) as the existing tax code.”
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Then it is highly defective.
We need a taxation scheme that will starve the government beast, not continue to feed it at its current hideous level.
My biggest problem with Cain’s 9-9-9 plan is that if it were adopted, it would soon grow to become a 10-10-10 plan, then a 15-15-15 plan, then a 20-20-20 plan, etc.
Once a new tax is enacted, it is just a matter of time before the tax rate is increased.
... or maybe the 5-5-5 plan... :-)
No nation with a direct tax has ever been able to resist the urge to tax itself into ruin - we are no exception.
There is a reason the constitution had to be changed to permit the direct, unequal taxation of the people - the founders didn't want the federal government doing that.
Whoo Hoo! I’m in. IMO if it won’t provide enough revenue for BIG government that’s a great reason to support it. Go CAIN!!!
Stupid ranter!
While I’m glad this is out for discussion, I think it’s going to be a hard sell to many who now either pay no taxes or have huge deductions substantially lowering their tax burden.
Example: Mom gets an annuity of $54,000 per year. She’s in a nursing home costing $54,000 per year, all deducted leaving her with zero income to tax.
Take that deduction away and she’ll owe almost $5,000 in taxes.
My dad planed her lifetime support before he passed based on rules in effect at the time. To change the rules abruptly means my mother will have to come up with $5k, not planned for with no ability to pay it.
RE: My biggest problem with Cain’s 9-9-9 plan is that if it were adopted, it would soon grow to become a 10-10-10 plan, then a 15-15-15 plan, then a 20-20-20 plan, etc.
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Why are you worried SPECIFICALLY about that tax plan when ANY tax plan ( including the current one, including all others that are going to be proposed in the future ) will have the same problem regardless?
If our attitude towards any tax proposal is — Let’s not do it because Congress will eventually turn it into a steaming pile of s**t — then we might as well not attempt any reform at all.
Herman is a proponent of the Fair tax. He has indicated this would be an intermediate step. See his web site.
It is necessary for two reasons.
Much of the country is attached to the income tax like a security blanket. You can't rip it all away at one time.
The current income tax is embedded in the price of goods and services. So, all existing inventory has an element of income tax embedded in it. It takes time to wash that inventory through the system and allow the system to adapt. Once the adaptation has taken place, the next step to just the fair tax can take place and the process repeats.
I need to undersand: How to offset (at least initially) the added expense to those (mostly senior citizens) on fixed/no income in retirement.
The net cost of goods and services does not go up. Under the current system, the cost of taxes is embedded in the price. Under the Cain system, the price goes down because of lower embedded taxes, then the sales tax is added on and the price out the door is the same as it was before.
That's my fear also. Fact is, such a plan would require a constitutional amendment creating strict, clear ceilings on all tax rates to every INDIVIDUAL entity that is taxed. That's the only way to do it.
They tell you who they most fear.
Not any more deceptive than what the entire White House has been giving us for three years.
Cain’s 999 may need some revision, but at least he is thinking in the right direction.
And this is a bad thing because...
Amen.
Of course, at least 4 of the current Supreme Court Justices would find it unconstitutional to amend the Constitution to repeal the Sixteenth Amendment.
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