Cain's 9/9/9 plan

[JollyRoger]

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.

Actually, Buffet would pay less than 9% since capital gains are 0% under the Cain plan. It is the favorable capital gains rate that is keeping Buffet at a lower rate than his secretary under the current system. This imbalance gets even worse under the Cain plan.

 

[Formaldehyde]

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....

After all, what Republican presidential candidate has ever promoted ideas that were in his own self-interest? I can't get much more "out there" than pointing out the obvious.

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.

Making the poor and the lower middle class pay their "fair share" is a huge talking point with Republicans at the moment.

 

[JollyRoger]

Making the poor and the lower middle class pay their "fair share" is a huge talking point with Republicans at the moment.

I almost want 9-9-9 to pass so that those of moderate-income who support it will perhaps see what a betrayal it is to them.

 

[Perfection]

This guy has sort of won me over. I like his 9/9/9 plan for taxes. Yeah, he is from the fed but I actually like this plan a lot. Thoughts?

I'm far too conservative to let such a radical change like this occur.

 

[JollyRoger]

This guy has sort of won me over. I like his 9/9/9 plan for taxes.

So you want to be taxed on your gross business revenue instead of your net income? All those labor costs would not be deducted from the amount that you get taxed.

Also, whenever you make a sell, you would have to charge sales tax. If you already hate 1099's, you are really going to hate the paperwork associated with a sales tax.

 

[Antilogic]

I'm far too conservative to let such a radical change like this occur.

Finally, someone who knows what the term conservative actually means. Bravo, good sir, bravo.

 

[BvBPL]

Putting a 9% tax on all consumer purchases is a non-starter for me.

Elect Herman Cain if you want everything you buy to be 9% more expensive.

 

[MobBoss]

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.

You know I hear you say this, but I dont really think its factual.

But fwiw, I wouldnt be in favor of a national sales tax either. I already pay close to a 9% state sales tax here in Washington State. A doubling of that would be brutal.

 

[JollyRoger]

You know I hear you say this, but I dont really think its factual.

For someone with a income structure like Buffet, it is very possible. His secretary, with basically a wage only income, is getting hit with payroll tax on every dollar earned, plus the income tax on top of that. Because of the cap on payroll taxes, Buffet pay a much lower percentage of his income in payroll tax. Also, most of his income probably comes in the form of long-term capital gains which is taxed at favorable rates (lower than ordinary income rates). The good news for Buffet under the Cain plan is that he wouldn't get taxed on capital gains at all. I can't figure out why Cain wants to cut George Soros' tax bill, but some guys just have a weird desire to do Soros' bidding.

 

[Zelig]

Fun fact, the guy who actually advised Cain on the creation of the 9/9/9/ plan is a regular ol' advisor at a Wells Fargo bank in Pepper Pike, Ohio. He only has a BA in accounting.

I have more respect for most accountants outside of the big-4 than most other people in the financial sector.

 

[JollyRoger]

I have more respect for most accountants outside of the big-4 than most other people in the financial sector.

Me too and then one of them goes out and creates something as foolish as this 9-9-9 monstrosity.

 

[katipunero]

any idea that's being touted for being a simple and common sense solution to a very complicated problem is to me very suspect. i cannot recall an instance where a proposed common sense approach was fair to everyone when applied.

of course i'm making a distinction between what is simplistic and elegant, and between common sense approaches and intuitive methods. ....there's nothing elegant or intuitive about the 999 plan.

 

[Zelig]

It would depend on what % the sales tax is. Sales tax is much harder to escape and get out of than income tax.

Only for the rich.

Everyone else can just go to small stores and buy all their products "cash no tax".

How do you enforce that on internet transactions? My city has a 9% sales tax, and that means I try to buy as little as possible in the city.

Same way every other western country enforces their sales tax on internet transactions?

Either you're a big business that the government can monitor, or you have to process your payments through paypal/google checkout/visa/mastercard/whatever, which the government can also monitor.

I guess if you want to wire all your internet purchase payments with Western Union...

So to buy a suit to wear to a job interview...

Who sells generic suits. It's like you've never bought anything outside of pizza before.

You can buy pretty generic OTR suits at Sears, or even Walmart.

Hell, I'd be a revolutionary if that happened.

I like meat, but I wouldn't have much of a problem with that, and it wouldn't affect how much meat I buy.

Of course, I'd rather just end corn subsidies.

 

[say1988]

You can buy pretty generic OTR suits at Sears, or even Walmart.

The bigger problem is: how do you define "generic"?

Does the government say which brands are taxed and/or which aren't? This just leads to lawsuits.

The only real option is to establish a price that the tax doesn't apply below, then you have to stake it to inflation (as the government cannot reliably increase it appropriately over time) or it gradually fades into uselessness. And then you get every company involved fighting over this price and merchandisers get even more paperwork to fill out.

Of course, I'd rather just end corn subsidies.

More importantly, end biofuels from food. Period.

 

[Zelig]

The bigger problem is: how do you define "generic"?

Does the government say which brands are taxed and/or which aren't? This just leads to lawsuits.

The only real option is to establish a price that the tax doesn't apply below, then you have to stake it to inflation (as the government cannot reliably increase it appropriately over time) or it gradually fades into uselessness. And then you get every company involved fighting over this price and merchandisers get even more paperwork to fill out.

Eh? I wasn't responding to a comment about what should be taxed.

You tax all clothes, in any case. Seriously, these concepts aren't new or novel, just look at the umpteenth other countries that have them working fine already.

 

[Zulu Impi]

Making the poor and the lower middle class pay their "fair share" is a huge talking point with Republicans at the moment.

This is because whenever taxes are discussed people never get around to the Payroll tax it always stays with income which is actually not that big of a revenue stream. Specific plans discussed in the primaries always change, the idea at this point in the campaign is to pander to your base. In 2007 every democrat would be out of Iraq within their first month in Office.

Cain is running a very strong campaign, on very little money the 9-9-9 plan makes that possible. Its all about name recognition and if you don't have money you need to be memorable, he is that. In some ways I like that he is not experienced in government outsiders can be effective we haven't had one in awhile.

On the actual plan itself it generates less revenue then the current plan while positioning a greater burden on the "middle class" I think with a lot of revision it could be effective and we need to redo our tax codes, maybe not in the same way but the numbers themselves are nothing more then rhetoric.

Like him or hate him you must admit hes been impressive both in campaign and debate, without the 9-9-9 plan he would be nowhere.

 

[Antilogic]

This is because whenever taxes are discussed people never get around to the Payroll tax it always stays with income which is actually not that big of a revenue stream. Specific plans discussed in the primaries always change, the idea at this point in the campaign is to pander to your base. In 2007 every democrat would be out of Iraq within their first month in Office.

I agree with you there. Federal income taxes are only one of many taxes, and it happens to be the nominally progressive one. Other sales taxes, import tariffs, payroll taxes, etc. tend to be regressive.

On the actual plan itself it generates less revenue then the current plan while positioning a greater burden on the "middle class" I think with a lot of revision it could be effective and we need to redo our tax codes, maybe not in the same way but the numbers themselves are nothing more then rhetoric.

I gotta disagree with you here--I do not see how you can manipulate these three flat tax figures into a workable tax code that would not place a huge burden on the lower classes.

Redoing our tax code could be as simple as reducing the number of deductions and still use a progressive income tax system. Or count all income as income, whether you get it by working or investing.

Like him or hate him you must admit hes been impressive both in campaign and debate, without the 9-9-9 plan he would be nowhere.

We gotta disagree again. Repeating the same garbage over and over again like a broken record is not impressive in my eyes. Not at all. The 9-9-9 has bumped him in the polls, though, I'll give you that.

 

[Formaldehyde]

On the actual plan itself it generates less revenue then the current plan while positioning a greater burden on the "middle class" I think with a lot of revision it could be effective and we need to redo our tax codes, maybe not in the same way but the numbers themselves are nothing more then rhetoric.

Don't you think that says a lot about a supposed computer science major and the CEO of a corporation who can't do basic arithmetic?

Like him or hate him you must admit hes been impressive both in campaign and debate, without the 9-9-9 plan he would be nowhere.

Are we talking about the same bigot who keeps making a fool of himself whenever he opens his mouth? I really don't see his appeal to anybody.

 

[timtofly]

@ JR

Retirees = we card; if you are over 50 from this date, you do not have to pay a sales tax.

 

[Whiskey_Lord]

Are we talking about the same bigot who keeps making a fool of himself whenever he opens his mouth? I really don't see his appeal to anybody.

I live with two people who adore the guy. Weep for my sanity.