The 9-9-9 plan makes much of end of payroll taxes offsetting the sales tax, but retirees have already paid payroll taxes and now they pay income tax on their pensions and withdrawals from 401ks. So retirees appear to pay 18% with no offset via the end of payroll taxes. Why is this a fair deal for retirees or workers who have already paid payroll taxes for years? (This is not a statement, I’m looking for an answer.)
I’ve heard this argument before and as a spouse to a retiree, it interests me a lot, too. I’m voting for him though, because I think this is the best deal for my kids and grandchild.
I believe he mentioned on Sunday that SS is not taxable as it was already taxed. Neither is dividend income like the growth on a 401K. I believe that answers your concern.
Under the plan 401k portfolios would rise in value significantly with a corporate tax rate of 9% and the elimination of the capital gains tax. The cost of goods and services would also fall with the elimination of the payroll tax.
As for fair, the SS administration says it will be insolvent before I retire, making my rate of return on contributions $0.
A booming economy will do more to save SS than the current tax code would ever do. Retirees should be more concerned about that instead of buying new goods and services. It also sounds as if “empowerment zones” would potentially buffer the impact on retirees.
The 9-9-9 plan makes much of end of payroll taxes offsetting the sales tax, but retirees have already paid payroll taxes and now they pay income tax on their pensions and withdrawals from 401ks. So retirees appear to pay 18% with no offset via the end of payroll taxes. Why is this a fair deal for retirees or workers who have already paid payroll taxes for years? (This is not a statement, I’m looking for an answer.)
2. Your contributions to your 401k avoided a 28%+ (?) marginal income tax rate. They will eventually be taxed at 9%. Sweet deal for your generation!
3. We need a humming economy to be able to afford to keep your checks coming from the earnings of current workers who have little hope of receiving the same benefits without drastic change.
4. The sales tax will merely reveal the embedded tax in goods, not necessarily increasing the total cost.
5. If those whose earnings become your monthly check are celebrating this plan, you might want to keep the golden geese happy by supporting it too.
6. It might cost you something to save our nation from socialism. Wouldn’t that be worth it?
Retirees savings would be OK, because of the lowering of prices. Remember, approximatly 22% of the price of all retail items is due to federal taxes. Cain removes that and replaces it with a flat 9% income tax.
Let’s say you spent $50,000 a year from your retirement savings. This is how it would work out under both plans.
As you can see, under 999 you would come out ahead by $4263.30.
Current Tax System vs. Herman Cain 999 Tax Proposal
What would happen to the cost of spending $50,000 a year from savings?
Retail price:
Now = $50000.00
999 = $42510.00
Local sales tax pct rate = 8.00%
Local sales tax dollars:
Now = $4000.00
999 = $3400.80
999 federal sales tax pct rate = 9.00%
999 federal sales tax dollars = $3825.90
Total cost with taxes:
Now = $54000.00
999 = $49736.70
Dollars saved with 999 plan = $4263.30
22% of the current cost of retail items is due to the current tax system. Herman Cain’s plan removes this hidden tax and replaces it with a 9% flat tax. The 999 price in this calculator has been adjusted to reflect this fact. Yes, that’s right. Retail prices willl go down under the 999 plan. The effect of the current tax code on retail prices has been well documented by the FairTax supporters. You can obtain documentation for this at fairtax.org.
Calculator at nerds4cain.com
Watch the videos and pay attention to what Cain says, at least you will then know what he claims to be proposing. The “news media” are deliberately distorting what Cain is saying. I am not here to argue for or against Herman Cain’s plan, I am just saying that you must listen to Cain and ignore what people are claiming that Cain said. Herman Cain says that social security and retirement plans will NOT be taxed under his plan.
The interview with David Gregory was a disgraceful attempt to distort the Herman Cain message. First it starts with a summary of the opinion of “experts” who claim the the Cain plan would be ON TOP OF existing taxes! This is so absurd that I cannot imagine anyone believing it. Cain would have to literally be an idiot to run as a CONSERVATIVE Republican candidate for president on a platform of piling a huge set of new taxes ON TOP OF what we already have. The idea that someone would try to sell that idea shows just how bad the political climate is now. It gets worse when they then go on to say that under Cain’s plans “the poor would pay more and the wealthy would pay less”. If they were right about adding this on top of the existing tax code the poor would indeed pay more but it would be idiotic to think that more taxes added on would mean the rich pay less than they do now!
Herman Cain is human and imperfect and his plans will be imperfect as all human plans are but there is a huge amount of lying going on to try to discredit Herman Cain, don’t believe it.