“Cain SAID it was OK to call it a VAT.”
It’s not a VAT, big difference between a VAT and a sales tax. A VAT is taxed at every level of the distribution chain. Cain’s sales tax is taxed at only the end point.
To attempt to say the 999 is a VAT tax is a deception. To attempt to take a conversation out of context and imply Cain is saying his 999 Plan is a VAT is deceitful.
But it's not the sales tax that is like VAT, it's the corporate tax that is like VAT. The corporate tax is on the revenue of each company that sells, whether to an end user or another company. That revenue isn't just profit, because almost every business deduction has been eliminated, so there aren't any real expenses being subtracted, just the cost of the goods purchased, which were already taxe by the business selling them.
There isn't enough of a plan published to know exactly how this corporate tax is structured, or a corporation buying goods avoids the end-user sales tax, or if they even can. If they can't, you can see how the tax spirals out of countrol (if every business pays 9% on 100% of all the parts that go into their manufacturing, and pays 9% on all the equipment they buy to do their manufacturing, and then they pay 9% on the new profit they get when they sell, and the next buyer pays 9% sales tax again, etc.).
But at it's base, given the elimination of deductions, it is pretty certain that the entire cost of an item will have been taxed, in bits and pieces, at the 9% corporate rate. The guy that pulls the raw material out of the ground, not being able to deduct the wages of the workers or the depreciation of their assets, pretty much pay 9% on their entire sale. The next guy probably doesn't have to count the cost of materials, but they also pay 9% on all their "added value". Hence the charge that it looks like a value Added tax.
The National Review explicitly calls the plan out on this -- that it has both a VAT, AND a Sales Tax, meaning it has the worst of both worlds. I certainly disagree with those who claim there is an 18% VAT, but I can see the argument that it's a 9% corporate VAT and a 9% user sales tax. IN any case, it's equivalent to paying 18% on the entire value of the item, because the corporations don't get deductions (we don't know if they get any or not, the plan isn't in place yet).
What I know for certain is that Cain doesn't think his plan is the best idea. I know that because under his vision, the 9-9-9 plan is temporary, an will be replaced with the FairTax. So he obviously thinks Fairtax is better than 9-9-9. I agree, although I don't like Fairtax either.