The Current Tax Code vs. Herman Cain’s 999 Plan
Base income
Now = $40000
999 = $40000
Amount spent on non-taxable items = $15000
Amount not spent (put in savings) = $3000
Amount donated to charity = $1000
999 sales tax rate = 9%
999 income tax rate = 9%
Federal taxes
Sales tax = $1444
Income tax = $3510
Total federal taxes = $4954
999 after tax income = $35046
999 effective tax rate = 12.39%
The 15.3% payroll tax is eliminated under the 999 plan. If you get a paycheck from an employer, then your employer pays half of your payroll taxes behind the scenes. It’s part of your pay that’s hidden from you in the current system. It is possible that your take home pay will go up under the 9-9-9 plan by 7.65%. If you checked yes on the calculator, it was added to your current income number (which is why the 999 income number is higher).
Remember, that money spent on things like a mortgage payment, rent, utilities, etc are not taxed as a sale. So, money you do not spend on over the counter purchases DO NOT incur the 9% sales tax, just the 9% earnings tax.
RE: Amount spent on non-taxable items = $15000
What are these non-taxable items that a family making $40,000 in income would be spending $15,000 on? Could you give us some examples?
What items are NON-TAXABLE?
Did Cain give us any indication of what they are?
ML/NJ