ParadigmShifter
Random Nonsense Generator
You could call fowl.
Cain's 9/9/9 plan
- Thread starter Archbob
- Start date
Formaldehyde
Both Fair And Balanced
Why is it shocking that a rich guy would want his taxes substantially cut while going even further in the red to make future generations pay for it?
MobBoss
Off-Topic Overlord
Are you alleging that his plan is merely for his own personal gain?
It's a gimmick that will help him sell books once he drops out of the race and takes his Fox News gig.
Zack
99% hot gas
It's nothing more than an empty campaign promise to try and get votes. This would never be implemented, and good thing -- it could be disastrous.
Well, there is a strong motive for it. He would gain quite a lot.
Then you look at the other motives, I.E. helping the country.
Spoiler :
Even if he wanted to, which is always dubious with any politician, the effects of this plan are pure fantasy.
The answer is clear.
MobBoss
Off-Topic Overlord
And here I thought the complaint was that the rich didnt pay taxes under the current tax plan.
I mean come on, Jolly has often touted how Buffet pays less in tax than his own secretary. Presumably, under the 9/9/9 plan he would be taxed more under that metric, wouldnt he?
So which is it? The rich do indeed pay a lot in tax and would be getting over under 9/9/9 or they dont pay hardly any under the current system? So which is it?
I mean come on, Jolly has often touted how Buffet pays less in tax than his own secretary. Presumably, under the 9/9/9 plan he would be taxed more under that metric, wouldnt he?
So which is it? The rich do indeed pay a lot in tax and would be getting over under 9/9/9 or they dont pay hardly any under the current system? So which is it?
The complaint is not that the rich do not pay a dime in taxes, I don't know where you got that idea.
I'm not convinced on that second line either. I haven't seen any notes on capital gains or other taxation on investments, but I'm assuming they are set to zero under the 9-9-9.
And the third is offering us a false choice, if I am parsing your sentence correctly.
Formaldehyde
Both Fair And Balanced
This would be a huge windfall for the rich and it offers 15% less revenue than the current system. It is just the usual rape of the lower and middle class by the rich while screwing over the next generation with even more national debt.
Why do you think a rich Republican presidential candidate is advocating it? Because he suddenly decided to become generous?
What I don't understand is why anybody but other rich people or wannabe rich people think it would be a good idea.
Why do you think a rich Republican presidential candidate is advocating it? Because he suddenly decided to become generous?
What I don't understand is why anybody but other rich people or wannabe rich people think it would be a good idea.
Corporate rates are reduced in two areas - their income tax rates are going down to 9 plus they are not having to pay the employer's half of the payroll tax. Now it may force GE ir Exxon to actually pay taxes (though Cain's plan does not prevent the possibility of subsidizing to make up for this 9% of pain), but most businesses currently pay more than 9%, plus they shoulder half the payroll tax burden.
Individual rates are going down to 9% on ordinary income and on capital gains, they are going to 0%. This certainly lowers the rate at the top end and increases it at the low end (especially when that low end is a couple with kids and a mortgage who lose all the credits and deductions - so it is kind of anti-family to boot). The reason someone like Buffett pays less of a percentage of his income than his secretray is that most of his income is capital gains, taxed at favorable rates. This doesn't change under 9-9-9 as capital gains rates are not only lower than wage serf rates, they are zero.
Then we get to the sales tax which is regressive as the lower the income, the higher percentage of your income you tend to put towards consumption. Cain's plan has no exceptions that traditional sales tax schemes has such as food, so this 9% will really be regressive.
Just because the current system is out-of-kilter doesn't mean that someone like Cain (or Forbes) can't tilt it even more. And it always comes dressed up in the same provocative attire of simplicity.
The sales tax part also hurts retirees. Congrats Grandma, you just spent your life paying income taxes and accumulating a nest egg - now you get to pay taxes again as you spend your nest egg.
The estate tax goes away under Cain's plan, so that is another break for the very high end crowd. You can actually think of the 9% sales tax as a death tax for everyone. Just got an inheritance that would be tax free? Guess what - you get taxed at 9% as you spend it.
Anyway, much like Cain's favorite ice cream, his 9-9-9 plan and candidacy is likely to eventually end up the flavor of the month that didn't meet expectations.
Woah, woah woah, hold the phones. Are you suggesting that specious and ridiculous analogies might not adequately convey complex policy concepts? Shame on you!
If the glove don't fit, you must acquit.
MobBoss
Off-Topic Overlord
Honestly, I dont know if it would be a good idea or not, as I havent really looked at it in much detail. I just found the comment that he's doing it just to help himself out to be kinda out there....
I thought the American system is based around the assumption that everyone is one of the wannabe rich people?
He would very likely personally benefit from it. Given his career as an executive, his current income is likely very capitals gains heavy as he cashes in stock holdings. He is likely wealthy enough to be subject to the estate tax. It also slashes one level of dividend taxes that would cut one of his sources of dividends to 0 when a company he has an pwnership interest to him pays him dividends. It also gets him out of any payroll tax obligations as both a business owner and an individual.
Thus while for the rest of us, it is the 9-9-9 plan, for Cain, it is more like a 0-0-0 plan. Not quite as tax free to Cain as the orbes plan was to the guy that worked so hard becoming the son of malcolm Forbes, but a pretty good deal for Cain, nonetheless. Nevertheless, I think Cain is smart enough to know this plan has 0-0-0 chance of passing the House-Senate-Presidential signing, so it's really more of a campaign gimmick that will get him into the tax plan hawking game once his campaign fizzles. He claims to want to use the 9-9-9 plan as a starting point towards the Fairtax - another plan that is more designed to sell books than to actually get enacted.
Here are the "details" as Cain has released them:
http://www.hermancain.com/999plan
One more thing I have noticed in looking at the plan - the business tax discourages incurring labor costs. Notice that you get a deduction for dividends to shareholders (spun as double taxation), but not a deduction for labor casts (though now that income is taxed not twice but 3 times - to the business, to to the wage serf as income, and to the wage serf as he spends it). Thus businesses will have the incentive to pay shareholders more and workers less. This is a reversal of how the tax system works now. The more I look at this, the uglier it gets so far as how it shifts the burden to the typical American family.
Under the current system, Buffet pays ~ 17% in direct federal taxes and his secretary pays twice that. Under the Cain plan Buffet would pay about 9% in direct federal taxes, and his secretary close to 18%. Because Buffet consumes very little of his income, and his secretary consumes most of hers.
