RE: Rent, a mortgage, utility bills, a car payment, school tuition, daycare, the list goes on.
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Are you certain that these items are deductible from our taxes under 9-9-9? I thought 9-9-9 was supposed to SIMPLIFY the tax code.
If you’re going to include all these items as deductible from your taxable income then the only difference between 9-9-9 and the current tax code is the tax rate and nothing else.
I am not sure if you are correct in your understanding of 9-9-9 at all.
What reliable source tells you that these items you enumerated are deductible under 9-9-9? They can’t be because if they are, then the advantage of SIMPLIFYING our tax code in order for government not to interfere with our lifestyle goes out the window.
There are no deductions from your tax bill - they go away. Sales tax is applied to over the counter sales, as it is today. You don’t pay sales tax on your mortgage or car payment or utility bill (you may pay some universal access taxes, but that is a different animal).
They are not deductible. They just aren't a sale where sales tax would apply. Let's say you put $4000 annually into a savings account - you don't incur a sales tax on that money because no sale took place. This is the reason that it is completely absurd for people to whine about paying 18% on their entire income. It is not going to be the case - you don't spend all of your income in over the counter transactions, and those items don't incur the sales tax.
This is just a guess, but...
The consumption tax should be on things that are “purchased,” not just “money spent,” and it is collected at the time of the purchase by the merchant.
For states that have a sales tax now, it would probably include those same items, but also food.
For example, a car payment is not “purchased,” the purchase was made during the original transaction, and that is when the tax would be collected (or financed within the loan).
I don’t think rent, utilities, tuition would fall under the same category at all because they are not actual purchases.
But, I’m no expert—this just makes sense to me, and I do have a financial/tax background.
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 may need to use the feigning ignorance tag. /FI
Your arguments belie the purported purpose for the original post. No one can be this dense.