Herman Cain's '999 plan'

[Patranus]

Great plan.
Simple and straightforward.
Equitable.
No loop holes.

Probably not perfect but 10000x better than what we have now and what any credible candidate is purposing.

 

[Ns1]

the problem is there is no universal definition of "fair"

 

[Dulanic]

He has been saying that the employees will be saving 6% because their payroll taxes will go from 15% to 9%. In addition this 6% savings will help workers offset the 9% sales taxes. Either he is ignorant or plainly lying because workers don't pay 15%, they pay half of payroll tax and the employers pay the other half. So again corporations get another break. After I heard this I knew he was full of shit.

Let's go with lying.

 

[Dulanic]

Here is a good read on Cain's 999 plan.

http://finance.yahoo.com/news/Herman-Cains-999-tax-plan-cnnm-976918316.html?x=0

To quote most republicans... a recision is a horrible time to raise taxes. Yet here is one that wants to slam the lower and middle class with extra taxes... pot... kettle?

 

[werepossum]

Doesn't this just undermind what Modelworks said above? In essence, you are having the 'more wealthy' pay for the poor.

To some degree, yes. I'll let Modelworks decide how much, but in general I don't think it's reasonable to tax people who are at or below the poverty line. Eliminating income up to the poverty line also makes a slightly progressive income tax, assuming we also eliminate the income cap for payroll taxes or roll Social Security/Medicare payroll taxes into general fund. I'm not a big fan of the progressive income tax, but if it rapidly flattens out as one gets further from poverty-level income I'm happy. All that is also assuming we tax all capital gains income the same as wage income, a modification Modelworks might or might not support.

 

[bfdd]

Great plan.
Simple and straightforward.
Equitable.
No loop holes.

Probably not perfect but 10000x better than what we have now and what any credible candidate is purposing.

I actually agree with this sentiment. I'd like to see it tweaked up a little bit and what not, but it is a far superior tax model to what anyone else is offering up, which is more of the same. We need to completely reform our tax structure. I'm a small Feds kinda guy, but I see the necessity of having a Federal Government.

 

[Bird222]

Let's go with lying.

Yeah, considering he was a CEO he is probably aware of how payroll taxes work.

 

[jstern01]

How about we abolish public services? You pay at least one federal excise tax don't you?

We don't need "fairer" taxes, as what's "fair" is totally subjective; we need no taxes or at least very decentralized taxes. I've never understood what is wrong with the state-rate tax (where the taxation is administered and collected by the states, then the monies are submitted to the Federal government based upon the U.S. House Representation of each state). That way, the majority in each state can decide what works best and there will be no federal policing and no more federal borrowing. It's much easier to get rid of debts at the state level than it is at the federal level.

Darn those nasty opening lines in the US Constitution, 'We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.'

And Article I, Section 8, Clause 1 of the United States Constitution (the "Taxing and Spending Clause"), specifies Congress's power to impose "Taxes, Duties, Imposts and Excises," but Article I, Section 8 requires that, "Duties, Imposts and Excises shall be uniform throughout the United States."[

And shame on the Supreme court to interpret that as meaning the Federal Government should be allow to tax us. the U.S. Supreme Court in 1916 upheld the progressive income tax as constitutional in Brushaber v. Union Pacific Railroad Company, 240 U.S. 1 (1916). The Supreme Court indicated that the amendment did not expand the federal government's existing power to tax income (meaning profit or gain from any source) but rather removed the possibility of classifying an income tax as a direct tax on the basis of the source of the income. The Amendment removed the need for the income tax to be apportioned among the states on the basis of population. Income taxes are required, however, to abide by the law of geographical uniformity.

It just sucks.

 

[Patranus]

I actually agree with this sentiment. I'd like to see it tweaked up a little bit and what not, but it is a far superior tax model to what anyone else is offering up, which is more of the same. We need to completely reform our tax structure. I'm a small Feds kinda guy, but I see the necessity of having a Federal Government.

I am mixed on a consumption tax but would rather have a 9% income tax and then a 9% consumption tax than have a flat 18% income tax.

 

[xBiffx]

Anyone who doesn't agree with or doesn't vote for Cain is a racist. All you need to know.

 

[her209]

He has been saying that the employees will be saving 6% because their payroll taxes will go from 15% to 9%. In addition this 6% savings will help workers offset the 9% sales taxes. Either he is ignorant or plainly lying because workers don't pay 15%, they pay half of payroll tax and the employers pay the other half. So again corporations get another break. After I heard this I knew he was full of shit.

His lips are moving. Of course he's lying.

 

[Ausm]

Anyone who doesn't agree with or doesn't vote for Cain is a racist. All you need to know.

So does that make you a racist because you hate Obama then??

 

[Patranus]

He has been saying that the employees will be saving 6% because their payroll taxes will go from 15% to 9%. In addition this 6% savings will help workers offset the 9% sales taxes. Either he is ignorant or plainly lying because workers don't pay 15%, they pay half of payroll tax and the employers pay the other half. So again corporations get another break. After I heard this I knew he was full of shit.

Where do you think that 7.5% that employers contribute comes from?
(Hint: Your salary)

 

[Ns1]

nm

 

[werepossum]

Where do you think that 7.5% that employers contribute comes from?
(Hint: Your salary)

It's true that the employer "contribution" is part of your total cost to your employer, but it's worth emphasizing that just because the employer no longer has to pay it doesn't automatically mean that it winds up in your pocket. In this economy that money would probably remain in the employer's pocket - not necessarily a bad thing, but it does mean that this savings can't also offset your new sales tax. (Unless you use Obamath.)

Also, giving government an additional tax means government now has another tax to raise. If you have capital gains income near or above your wage income you still come out ahead, but most people don't.

 

[OutHouse]

paying 9% would be a nice tax break for me. I like this plan

 

[Carmen813]

Regressive taxes for the lose.

 

[Carmen813]

Where do you think that 7.5% that employers contribute comes from?
(Hint: Your salary)

If you honestly belief that money would just magically go into your salary you are quite deluded.

 

[Thump553]

werepossum: you are generous to a fault in using the phrase "doesn't automatically mean (the payroll tax reduction) ends up in your pocket." I'd like to see some real world analysis on that-I'm guessing workers would be doing very well if their salaries were increased enough so their net pay didn't go down-with the employer pcoketing the rest of the savings.

The regressive nature of a 9% national sales tax is enormous as far as widening the net income disparity in this country, not to mention the huge whammy such an expense would have any economic recovery. For many people it would amount to a nine percent income reduction.

Cain's ideas make a nice bullet point set of talking points to score political points but is absurd and unworkable.

 

[Fern]

IMO it will be disaster to implement an national sales while leaving the income tax in place. Oh, they may start out at 9% but anybody believing they'll stay there is delusional.

I also feel that adding another 9% sales tax to that of the already existing state sales tax will kill demand. Bad for the economy, and very bad for the states. Sales tax is major source of revenue for them and this will hurt them financially.

I saw the comment below by his economic advisor. The guy appears to be an idiot:

“This is an attempt to shift the tax burden away from production and towards consumption, to balance the load,” says Rich Lowrie, Cain’s Cleveland-based senior economic advisor. “This taxes everything once but nothing twice.”

How the heck is paying 9% on the income you earn, then paying another 9% when you use that money to purchase something not taxing it twice?

I've said it before here many times, and I'll say it again: National sales taxes are not nearly as simple as people think. I worked in Paris at the Euro HQ for one of the 'Big 4' international accounting firms and our VAT (national sales tax) was the largest division. Think about that for a minute.

As someone above noted, we're going to have people clamoring for sales tax exemptions for all kinds of things. E.g., should healthcare products and services have a 9% sales tax? Probably not. What about the cardboard boxes sold to pharmaceutical companies to pack and ship their medicine? Probably not. So on and so forth. It ends up getting ridiculously complicated.

IMO, getting Congress/politicians to stop using the tax code as a means of wielding power to influence aspects of our lives is total fantasy. We go through this phase constantly where we simplify the tax code, ripping out all the little things Congress has inserted, then about 10 or 20 yrs later it is 'junked up' to the max again. Rinse, repeat etc. But this time we'll be stuck with an new/additional junked up/complicated sales tax too.

9-9-9 is a horrible idea IMO. (Of course, that means it will likely happen, at some point anyway).

Fern

 

[OutHouse]

Great plan.
Simple and straightforward.
Equitable.
No loop holes.

Probably not perfect but 10000x better than what we have now and what any credible candidate is purposing.

I agree. the other politicans plans are the same failed crap we have now

 

[Doppel]

Cain has a 10-15% chance of winning the republican nomination and a 0% chance of ever being president. No chance in hell it will ever happen.

 

[woolfe9999]

Sales taxes are regressive AND they kill consumer demand. They suck. The last thing we need is a national sales tax.

 

[Siddhartha]

I live in CT which has a 6.5% sales tax is Mr Cain proposing that I pay a total of 15.5% taxes on food and other necessities?

 

[werepossum]

werepossum: you are generous to a fault in using the phrase "doesn't automatically mean (the payroll tax reduction) ends up in your pocket." I'd like to see some real world analysis on that-I'm guessing workers would be doing very well if their salaries were increased enough so their net pay didn't go down-with the employer pcoketing the rest of the savings.

The regressive nature of a 9% national sales tax is enormous as far as widening the net income disparity in this country, not to mention the huge whammy such an expense would have any economic recovery. For many people it would amount to a nine percent income reduction.

Cain's ideas make a nice bullet point set of talking points to score political points but is absurd and unworkable.

This is true. I'd venture to say very, very few employers would turn over that money, at least not until their competitors did. The Democrats' years of insisting that the "employer contribution" has no effect on the employee's salary would also give them cover. Why would I give you MY share of the tax cut, that I previously paid?

Sales taxes are regressive AND they kill consumer demand. They suck. The last thing we need is a national sales tax.

There are two truly great things about a national sales tax - it allows everyone to see the true cost of government, and it is difficult for government to buy votes with it. I don't buy the part about killing consumer demand IF the payroll and income taxes were simultaneously abolished, because the average worker would have a lot more money to spend, but it would make saving more attractive as any portion of your income saved would be tax free. Savings USED to be considered a good thing. A national sales tax as the sole means of federal taxation wouldn't be regressive; it just wouldn't be progressive. It would be flat, or if started at the poverty level it would be very slightly progressive.