Herman Cain's '999 plan'

[ElFenix]

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.

that's from an legal burden standpoint. iow, it's worthless. from an economic standpoint the worker is usually the one who pays the payroll tax.


a company is going to produce up until where the marginal production equals the marginal cost. the marginal cost for a new employee mostly consists of the total compensation of the employee. that is salary, benefits, and any fees/taxes such as employer's share of payroll taxes or unemployment insurance. the company does not care whether those things are paid in 100% cash directly to the employee or not.

 

[Jhhnn]

Cain's Chief 'Economist'

"Americans for Prosperity", another Koch Bros front.

No taxes on capital gains or dividends, just on earned income. I'll bet the financial elite are creaming their jeans at the idea...

Oh! Oh Baby! Ska-wirt!!!

 

[Jhhnn]

that's from an legal burden standpoint. iow, it's worthless. from an economic standpoint the worker is usually the one who pays the payroll tax.

So,uhh, do you really think that employers will grant employees the portion of SS they now pay? Or will they just keep it?

Inquiring minds want to know if you're truly delusional...

 

[sportage]

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

If people actually READ the 999 plan, the plan also ends social security AND Medicare is killed dead. His plan suggests getting your pension, social security and Medicare from... wait...wait...wait for it.... your CHURCH.
And...wait...wait..wait for it... the STATE.
The same state that cannot afford to hire police, teachers or fix the streets.

I guess that's where Bachmann the exorcist lady got her 666 warning from?

I like Cain's original 999 plan better:
9" pizza, for $9, delivered within 9 minutes.
Actually it was his original 9999 plan.
9" pizza, for $9, delivered within 9 minutes, and 9 minutes till it gives you the runs...

Gaud I love watching stupid people running for the republican nomination.
Maybe we should split up the country. The republicans could have the bottom half and the democrats the top half, each half ran by their own party congress and president.

And we will see how many citizens really want to live in the southern land of republican rule.
No healthcare.
No Medicare.
No social security.
No science.
No unions.
No agency to make sure your food is safe.
No gays.
All women submissive to man.
Everyone making over 1 million pay no taxes.
Everyone making under 1 million pay 75% tax rate.
And that list are the positive selling points in good ole republican-land.

 

[a777pilot]

Do any of you understand that this so called 9-9-9 Plan is NOT the end product but is merely a transition to a system that is not based on income at all?

You might want to research why we have a 16th Amendment in the first place.

 

[thegimp03]

Cain's plan is bold, I'll give him that. Doubtful whether it'll ever come to fruition even if Cain is somehow elected, as Congress is happier sticking with the status quo of today's failed system so they can be reelected to additional terms.

 

[Thump553]

Do any of you understand that this so called 9-9-9 Plan is NOT the end product but is merely a transition to a system that is not based on income at all?

You might want to research why we have a 16th Amendment in the first place.

So you are saying it is Cain's plan to completely abolish income tax altogether?

Gotta love loopy Republicans that long for the days of robber barons and death of the middle class.

 

[halik]

Another regressive flat tax idea that would be an economic disaster.

But it would sure be great for someone independently wealthy like Cain.

He makes no income so he pays no income or corporate tax, and since his saving as so large, he is only taxed on what he consumes. Enabling him to evade 99.9% of taxes, while others on limited or fixed incomes paying even more taxes.

That is exactly the problem we have now, more and more national wealth is transferring to the 0.1% of those that are most wealthy, and now ole Herman Cain wants to accelerate the process.

In the old testament bible Cain slew Able, and now in the new GOP bible, Cain wants to slay the American economy.

This, incidence of the tax will be mostly borne on the poor. Great for me, stupid for the country.

The inelastic part of consumption is inversely proportional to your income.

 

[Matt1970]

It is highly unlikely an across the board flat tax would ever pass.

 

[Jhhnn]

Do any of you understand that this so called 9-9-9 Plan is NOT the end product but is merely a transition to a system that is not based on income at all?

You might want to research why we have a 16th Amendment in the first place.

Yeh- transition to a totally regressive tax plan, where the rich pay only a pittance in relationship to their incomes, and their ability to stomp the rest of us flat economically can grow exponentially.

That's really what all Repub tax plans offer- a new Gilded Age, and everything that goes along with it.

 

[bfdd]

btw Cain should get all the credit in the world for at least pushing up something besides talking points. Where is everyone elses "plan"? I don't even care if they can come true, at least he's showing SOMETHING of what he wants to do and not just using the "fix the economy" talking point.

No I'm not a Cain supporter and I doubt I'd vote for him, but the guy stands out among the rest for not being a politician and for actually putting something up for people to critique.

 

[alphatarget1]

"Americans for Prosperity", another Koch Bros front.

No taxes on capital gains or dividends, just on earned income. I'll bet the financial elite are creaming their jeans at the idea...

Oh! Oh Baby! Ska-wirt!!!

I actually was wondering about that. On Cain's website it says:

Individual Flat Tax – 9%.

Gross income less charitable deductions.
Empowerment Zones will offer additional deductions for those living and/or working in the zone.

Gross income would include capital gains and dividends, no? I know interests in my "saving" accounts are taxed as income.

 

[Carmen813]

Only way I'd consider a national sales tax like this is if it was exempt from certain essential products/items, or if it came along with universal health care.

 

[alphatarget1]

Only way I'd consider a national sales tax like this is if it was exempt from certain essential products/items, or if it came along with universal health care.

Taxing consumption is the way to go. Nothing should be exempt. People will think twice about buying crap they don't need and eating less (less fat people!) if there is a consumption tax.

 

[halik]

Yeh- transition to a totally regressive tax plan, where the rich pay only a pittance in relationship to their incomes, and their ability to stomp the rest of us flat economically can grow exponentially.

That's really what all Repub tax plans offer- a new Gilded Age, and everything that goes along with it.

I'm kind of amazed people nowhere near the required income support this stuff:

Average savings rate is about 5%, average effective fed income tax rate is ~14% (middle quintile). Currently your after-fed take home avg is 86% 0.86 = (1-0.14). With Hermie's plan your take home on average would go down to 83.2% = (1-0.09) - (1-0.09)*0.95*0.09 = 0.832

Hope you can follow the above - since on average people spend 95% of their after tax income, putting another 9% on that makes them strictly worse off. People on the higher end of the income spectrum obviously save far more and have higher effective tax rate, so their benefit would be greater.

 

[halik]

Taxing consumption is the way to go. Nothing should be exempt. People will think twice about buying crap they don't need and eating less (less fat people!) if there is a consumption tax.

Lovely idea for a country where consumption makes up 70% of the GDP...

 

[alphatarget1]

I'm kind of amazed people nowhere near the required income support this stuff:

Average savings rate is about 5%, average effective fed income tax rate is ~14% (middle quintile). Currently your after-fed take home avg is 86% 0.86 = (1-0.14). With Hermie's plan your take home on average would go down to 83.2% = (1-0.09) - (1-0.09)*0.95*0.09 = 0.832

Hope you can follow the above - since on average people spend 95% of their after tax income, putting another 9% on that makes them strictly worse off. People on the higher end of the income spectrum obviously save far more and have higher effective tax rate, so their benefit would be greater.

I may not agree with the 9-9-9 plan in its entirety, but it got a discussion going, right? I think anybody who works should pay at least some form of income tax, and I think a regressive tax will be good for our economy in the long run. If crap is more expensive due to a sales tax, people will buy less stuff which are mostly from China anyway. That'll in turn lower our trade deficit. This whole consumer-based economy is only fueled by debt, not real growth, and we clearly cannot afford it anymore. I don't see why the 9-9-9 plan cannot be negotiated and changed. Our tax code is pretty FUBARed and it'd be nice to start over.

 

[alphatarget1]

Lovely idea for a country where consumption makes up 70% of the GDP...

The only way to create wealth is to sell stuff/ideas to other countries that people want to buy. How much of that 70% of the GDP was funded from debt? Do you really think that's sustainable in the long run?

 

[Jhhnn]

I actually was wondering about that. On Cain's website it says:

Individual Flat Tax – 9%.

Gross income less charitable deductions.
Empowerment Zones will offer additional deductions for those living and/or working in the zone.

Gross income would include capital gains and dividends, no? I know interests in my "saving" accounts are taxed as income.

Even the WSJ offers that Cain's plan would end taxes on investment income-

http://online.wsj.com/article/SB10001424052970203791904576607330997185722.html

No estate taxes, either. It might make some kind of sense if corporate profits & cash reserves weren't at all time highs, with the incomes of the financial elite not far behind. They're doing that at reduced capacity utilization. It's not like they need money to invest, they just need reasons to invest, like the inability to meet demand with existing investment.

All trickledown all the the time- Ska-Wirt!

 

[halik]

The only way to create wealth is to sell stuff/ideas to other countries that people want to buy. How much of that 70% of the GDP was funded from debt? Do you really think that's sustainable in the long run?

*Annual* US GDP is $14.1T, *total* consumer debt is 2.43 trillion (800b of that is revolving, 56% of people carry it over 12 mo)

Consumer debt is down sharply from previous year.

http://www.creditcards.com/credit-c...-personal-debt-statistics-1276.php#Total-debt

 

[Jhhnn]

I may not agree with the 9-9-9 plan in its entirety, but it got a discussion going, right? I think anybody who works should pay at least some form of income tax, and I think a regressive tax will be good for our economy in the long run. If crap is more expensive due to a sales tax, people will buy less stuff which are mostly from China anyway. That'll in turn lower our trade deficit. This whole consumer-based economy is only fueled by debt, not real growth, and we clearly cannot afford it anymore. I don't see why the 9-9-9 plan cannot be negotiated and changed. Our tax code is pretty FUBARed and it'd be nice to start over.

Circling back around to *federal income tax*, like a moth to a flame. Total taxes as a % of income are what matters. The rest is pure obfuscation. All taxes cut into the bottom line just the same, regardless of which govt entity collects them.

 

[Zebo]

I hope Cain gets elected. Instead of slow bleed/ slow boil maybe people will wake up. I'm voting for him,

 

[Zorba]

Taxing consumption is the way to go. Nothing should be exempt. People will think twice about buying crap they don't need and eating less (less fat people!) if there is a consumption tax.

An amazing way of killing demand, which causes companies to lower supply, which lays people off, which kills demand, repeat.

Who the hell would buy a new car with a 18% sales tax on it (9 from state, 9 from feds)? Or would they still buy the same car as they would've with just a 3% excise tax?

 

[woodie1]

........

Who the hell would buy a new car with a 18% sales tax on it (9 from state, 9 from feds)? Or would they still buy the same car as they would've with just a 3% excise tax?

That would be a non-starter for me.

However, I did read that a used car would not be taxed so their value would increase. All products would be taxed once when sold as new but never taxed again.

 

[umbrella39]

Cain hasn't a chance, next...