Posted on 10/17/2011 1:52:25 PM PDT by SeekAndFind
Of course it is. Employers have to factor this in when deciding what to pay an employee.
And Cain is actually underselling his own plan.
Rather then calling it a 6 percentage point reduction, he should call it a 40% reduction, which it is.
I am convinced that the biggest critics of this plan don’t have a CLUE about business.
My husband and I have a small business and employ 50 individuals. We have already crunched the numbers, and my husband added the 7.65% back in WITHOUT MY MENTIONING IT. It was a no-brainer, it IS their compensation.
We also realized through figuring out the numbers that we would be able to grow our business, which means jobs.
Would you favor a law in conjunction with 9-9-9 that mandates the employer passing that savings to employees in the form of wage increases?
Services are generally not covered under a sales tax at the state level. Cain has modeled his federal sales tax on the state sales tax systems, so it’s reasonable to assume they would have the same exemptions.
Repayment of a loan (mortgage or auto)
daycare
dry cleaning
All of the current services exempt under state systems would likely also be exempt under a federal system. Although, you are right, they haven’t been totally spelled out in the plan.
Utilites like electricity and water would probably be taxed, since the involve the sale of a product.
Utilites like trash collection wouldn’t, since they are a service.
“You’ll notice from the calculator that you can significantly affect your tax rate by purchasing used items (say at Goodwill, something that a person making under 20,000 a year is very likely to do)—these do not incur sales taxes.”
Used items may not incur the 9% tax, but I can guarantee you that the price of used items, particularly cars and houses, will rise in tandem with the higher cost of new items. The 9-9-9 plan will not be implemented in an economic vacuum....
How accurate are all the other claims by past and present candidates and elected officials? I don't even pretend to know where they come up with those figures, all I know is I pay my payroll tax on my pension, my property taxes, my state taxes, my state sales taxes, my gasoline taxes......etc, etc, etc...........
Personally, I can't see how I can benefit from a 9-9-9 tax plan............
9% federal tax added to my state 6% equals 15% of all my expenditures after my income tax.........
I'm no longer in a saving mode, what I receive from my pension goes to pay all my expenditures and an additional 9% on those payments will definitely hurt........
The point is that the payroll tax results in an employee taking home 15% less money than he otherwise could were it not for the tax.
My God can you not read and understand the facts presented in this article. Cain is NOT 100% accurate.
“I have been retired for several years and just could not figure out what the 15.3% included. I thought Cain was talking Fed Tax. The more we check into Cain the more we find out he has a problem with the truth. “
Unless you are an idiot, Cain is telling the truth. Money the employer pays ‘on your behalf’ in taxes is money that would go to YOU if it wasn’t for the tax. The only reason SS taxes are split is so the idiot employee - you, in this case - won’t realize that the tax is actually costing him over 15%.
How does it feel to be stupid?
What you said! Also, I'm for pretty much anything that removes progressivity (Read: Marxism) from the tax code.
Used items are currently exempt under state sales taxes.
You’re right, the demand for used items might increase, which would cause their value to go up.
But that’s not really an argument against Cain’s plan is it?
That’s like avoiding having kids, because you’ll have to change their diapers. The long term benefits of having children far outweight the temporary problem of changing diapers.
The long term benefit of getting rid of the current 90,000+ page tax code far outweighs problems like used items going up (imho).
What did Churchill say about democracy? “It’s the worst form of government, except for all the others that have been tried.”
I know the plan isn’t perfect, but compared to the current system it’s a definite step up.
The adjustment to gross income for self-employment tax doesn’t reduce the amount of self-employment tax paid. It only reduces the double taxation of income taxes.
For some reason, lots of folks think that double taxation is an intolerable anomaly that everybody is against. On the contrary, every working person and every investor is double taxed. The income tax double taxes social security and one-half of self-employment taxes. It also double taxes dividends that are paid out of already taxed corporate income.
Double taxation is no bug in the system; it is a feature, albeit one that punishes productive workers and investors for the benefit of politicians and other deadbeats.
Cain is telling the truth. The social security tax is 15.3%. The employee pays half, and the employer pays the other half, which is money that he may otherwise be able to pay to said employee in salary.
Ergo, it is a 15% tax.
Self-employed people pay the entire 15.3%.
999 Calculators:
Income -
http://www.nerds4cain.com/Blog/archives/723
http://raisingcain2012.wordpress.com/about
Sales Tax -
999calculator.net
I did some calculations based on different assumptions.
2010 - paid about 13.59% to the Feds
2012 - after the changes that are slated to come about already, this becomes 16.37%
999 - with everything taxable and nothing from my employer: 17.19%.
999 - with employer passing on FICA and MC, this becomes a rate of 13.46%, though with a 4.5% greater take home pay.
999 - with only 75% of purchases taxable or some savings is a rate of 15.14%
There are too many guesses still to calculate it more accurately. I am quite sure your mileage would vary.
I can share the calculations with you tomorrow if you care to private mail me.
There was a FR thread/post from an old article (New Deal era IIRC). It talked about gov’t wanting more of the economic pie - or in their example - more of the “water”.
If the pool of resources ($) is in private hands, dipping water out of the spring-fed pond is a hard way for the gov’t to get resources AND make the pool of water smaller.
However, if the gov’t can divert some of the water from the springs/creeks going into the pool - they get their money AND reduce the pool available for the private interests.
[Hmmm - my visual: along with the pyschological advantage of tapping the springs “before it is really yours anyway”; compared to a huge pump in your pond and the hose running past the house to the gov’t tanker truck parked in your driveway.]
Anyway - an interesting visual when it comes to payroll taxes, SS, and now of course healthcare. (Boy - talk about diverting resources from the private to the government!).
Can you imagine how much an employee would have saved up over time if 155 of their wages were put away in a private account over their working life?
No - instead - we get told we need the SS ponzi scam.
You may need to use the feigning ignorance tag. /FI
Do you pay any income tax now? Do you collect social security or will you in the future? Do you have any children or younger friends who need jobs presently or in the future? Do you think if the economy gets worse you will be better off? If it gets better?
Pensions are exempt, from what I have seen. That would be 0% Federal Income Tax. We’re not sure yet on what would or would not be taxable on the Sales Tax. I suspect some of the reports of exemptions for retirement might be true, but there is not enough information to know.
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