Simple example of the outrageousness of Cain's 9-9-9 plan

[halik]

Cain 999 plan if based on the half baked advice of an investment banking adviser with no economic credentials and nothing more. As various people run various numbers past us on a plan the is, as of yet, pie in the sky. But maybe at some near future point in time, we will have more credible numbers from something like the Congressional Budget Office that can be more relied on.

But where does this shit come from in terms of a potential President Cain promising anything, when tax rates and tax policy are set by the legislative branch and not the Prez.

As for me, I have run the numbers for me, and have concluded Cain is public enemy number #1, as it will shift the tax burden more and more away from the very rich and towards the average wage earner. And totally collapse the American economy in short order.

This

 

[Patranus]

1) You assume that people spend 100% of their money on NEW items.
2) You assume that the other 7.5% in payroll taxes actually comes out of the employers pocket (Hint - It comes out of yours)
3) You assume that the reduction in corporate taxes wouldn't result in lower prices or higher wages.
4) Deductions for children should be eliminated anyways.

 

[Thump553]

It's ironic. Obama has to move heaven and earth, and gets called every name in the book for pushing through a very tepid medical insurance reform but Cain proposes to completely restructure our complete tax system (not just income tax) in addition to defunding Medicare and Social Security and his GOP supporters think he plan is just great based on a vague 60 second explanation.

My question also is how is he going to pass such a sweeping change where he previously vowed under his Administration no bills or treaties would be longer than three pages.

 

[Lithium381]

the tax system NEEDS to be reformed...... flat tax (anything above poverty level) is the simplest way to go.

 

[halik]

1) You assume that people spend 100% of their money on NEW items.
2) You assume that the other 7.5% in payroll taxes actually comes out of the employers pocket (Hint - It comes out of yours)
3) You assume that the reduction in corporate taxes wouldn't result in lower prices or higher wages.
4) Deductions for children should be eliminated anyways.

1) Someone has to buy the new items for them to become used
2) Effective tax rate for middle quintile is 14%, rerun the math with that and you'll get the same answer
3) Wages are not a function of corporate tax rates, but rather marginal productivity. You will likely see an increase in employment numbers though.
4) Don't really know why there's a subsidy for having kids.

The 999 is most definitely a tax hike on the lower half of the income distribution and I still don't think the revenue numbers will be anywhere near a viable budget.

 

[halik]

the tax system NEEDS to be reformed...... flat tax (anything above poverty level) is the simplest way to go.

Is that building a fence to fix the immigration issue?

 

[blackangst1]

it will shift the tax burden more and more away from the very rich and towards the average wage earner.

The 999 is most definitely a tax hike on the lower half of the income distribution

(snipped the rest of the comments, obviously)

So whats the income level where its break even to what we have now? Again, if it raises taxes on lower and middle income, and cuts taxes for the rich, whats the cut-off income point?

 

[halik]

(snipped the rest of the comments, obviously)

So whats the income level where its break even to what we have now? Again, if it raises taxes on lower and middle income, and cuts taxes for the rich, whats the cut-off income point?

Pull up the effective tax rate by quintile, income quintiles and savings rate quintiles*.

For the average person (looking at the middle quintile/~50th percentile) savings rate is some 5% currently, effective tax rate at 14.2%.

So (1-0.142)=85.8% take home

With 999
(1-0.09) - (1-0.09)*0.95*0.09 = 83.2% take home



*Haven't been able to find that data.