Cain's 9/9/9 plan

[Luckymoose]

Agreed, 9% sales tax would only be OK if it was the only tax, but then you need to find a way to make it non-regressive.

I pay basically that much already so it won't really bother me much.

 

[uppi]

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.

Nationally that is quite easy. Just mandate all commercial sellers to charge the sales tax (and impose an equal tariff on imported goods). Unless they can somehow keep the sales off the book (and that's hard, because shipment will create a lot of records), they have to comply.

There are many countries which successfully do this, you would just have to copy one of those systems. In the EU there even is a framework that accounts for the sales taxes in different countries. If I order something from some other EU country they have to charge the sales tax of the country I live in.

Only when you start doing crazy things, like a city sales tax the enforcement gets complex. Keeping track of the sales taxes of 50 states should be manageable. But keeping track of the tax law in the 9 people town of Nowhere, Kansas would require a huge legal department.

 

[carmen510]

More common things like name-brand shoes, tv's, computer, video games, etc. Stuff you don't need to survive.

Well, if you want the poor to remain ignorant (higher price for TVs, newspapers, books, etc.), deprive them of entertainment, reduce their job prospects (computers that have word processors and access to the internet), prevent them from using time-saving appliances (electricity gets a sales tax, in addition to the cost of buying appliances), prevent them from eating perishable foods, and generally make their lives harder, then I guess you can say the poor could still survive with a 9% sales tax.

 

[Cutlass]

First: We really need someone competent, like Jerhico or Intregral, to figure out just what kind or revenue the system would really generate. The US federal government is averaging something like 22% of GDP in spending (more when the economy is weak, less when it is better), and that simply isn't going to go down in the long run. So any tax proposal will have to generate that much revenue to make the least lick of sense.

Trying to cut the government much below that in the long run would be devastating for the economy and population.

It would depend on what % the sales tax is. Sales tax is much harder to escape and get out of than income tax. Business taxes contribute to like 1% of our revenues right now. Under this plan, they would probably contribute more.

High sales taxes have the same tax avoidance an noncompliance problems as any other tax. Nation's with high VATs have up to 25% noncompliance. Sales taxes as they exist in the US now already have substantial noncompliance.

Is there any analysis out by the CBO or some other organization that confirms this? This sounds like utter fantasy to me.



Bootstoots stole my thunder by hinting at the exclusive vs. inclusive sales tax calculations. I would assume that Cain's plan would implement a 9% inclusive tax (and gradually increase this to lead to the national sales tax), so that the 'actual' rate that most Americans recognize (the exclusive rate) is somewhere around 10%.

What's funny is that other organizations that have grinded through the calculations suggest that a 23% inclusive tax is too low to be revenue neutral. More realistic calculations put the figure around 30% inclusive or higher, which corresponds to nearly a 43% exclusive tax rate.

Your assuming he's not going to cut spending.

He may think he's going to get a big cut in spending. If he thinks that, he's in dreamland. As I said above, can't be done without crippling damage.

 

[Archbob]

So basically the poor should regress to almost a 3rd world existence for the benefit of an ill conceived tax scheme. I'm surprised you havent gone so far as to offer suicide bounties for the poor.

You can buy regular non name-brand shoes, I promise, they work just fine. Most of the stuff that poor people buy won't be hit by the tax. They still receive vouchers like in the current system. But if they want to buy Nike instead of generic shoes or buy Polo instead of the $5 walgreen's shirt, they will have to pay tax like everyone else.

 

[Core Imposter]

Cain's inexperience shows, not that he isn't likable when viewed from the right.

He really doesn't understand the danger of being specific this early in the process. Romney has more experience. He has a 59 point plan that nobody is going to bother to read must less haggle over. He gets credit for having a plan without having any scrutiny. Perry is smarter, he is going to roll out a fuzzy plan over a period of time...first step being drill, baby, drill. The base will hate that, oh wait!

Cain has used the 999 plan to get in the spotlight now he has to pivot off the issue quickly because it will not help him further. The idea that the base is going to like a plan that gives Congress a national sales tax is grievously flawed. Plus it could never be passed.

Cain blew the real benefit of having a plan in the first place when he claimed it was revenue neutral. That should be the new definition of political incompetence. He should have proclaimed that the plan would increase revenue by generating growth. Otherwise what is the point of it?

Nevertheless, what a show. This ain't my daddy's GOP. We got a mormon, two actually, a catholic, and a pizza guy named Cain with an upsidedown 666 plan and Joan of Bachmann to point it out.

And Chris Christie kissed the Rominator's Ring.

 

[Formaldehyde]

Making the wealthy even wealthier, while screwing over the poor and middle class and not generating nearly as much revenue, is now considered to be a "plan"?

[http://www.politifact.com/truth-o-m...bout-herman-cains-9-9-9-tax-plan/]Politifact: The facts about Herman Cain's 9-9-9 tax plan[/url]

The 9 percent income tax

The centerpiece of the 9-9-9 Plan is to eliminate the current, complicated income tax system -- with its series of tax credits and deductions and its variety of tax rates based on income -- and to replace it with a flat income tax. Cain's flat 9 percent income tax also would replace payroll taxes, which all workers pay and that fund Medicare and Social Security, and would end the estate tax, which is a tax on inheritances. Currently, about 49.5 percent of all tax filers pay no income tax at all, according to the Joint Committee on Taxation, a respected bipartisan committee of Congress. Cain's income tax would be collected equally for workers with two exceptions -- taxpayers could claim a deduction for charitable contributions (we haven't heard him discuss a limit) and taxpayers could earn a type of tax credit for living in an "empowerment zone," which Cain has described as inner cities needing revitalization. While the result of this part of Cain's plan would affect taxpayers differently, the flat income tax and the elimination of payroll taxes would result in shifting some of America's tax burden, making some poorer Americans pay more into the system while many middle- and upper-class Americans would pay less.

The 9 percent national sales tax

Cain's national sales tax, in effect, would attempt to make up for the reduction of federal revenue by creating the 9 percent income tax. The national sales tax, which would help fund the federal government, would be on top of state and local sales taxes, which fund state and local government. In Florida, that would create a hypothetical tax rate of 15 percent in most parts of the state. In the Wall Street Journal, Cain said the national sales tax would be levied "on all new goods." (A good question to ask would be whether services are exempted.) Most economists agree that a national sales tax would raise the relative tax burden on low- and middle-income earning taxpayers. "The main reason is that low- and middle-income households consume more of their income than high-income households do," said William Gale, senior fellow for economic studies at the Brookings Institution. "Another way of saying that is high-income households save more of their income than low-income households do."

The 9 percent corporate income tax

The nation's corporate income tax now stands close to 40 percent, so on the surface Cain's plan would be a huge reduction. But that's only part of the story. The current tax structure includes credits and deductions that often reduce the rate at which businesses pay income taxes. According to the World Bank, businesses on average pay an effective tax rate of 27.6 percent. (Of course, some businesses pay at a far lower rate and some pay more.) Like Cain's changes to the personal income tax structure, his plan for businesses would include eliminating many -- though not all -- of the credits and deductions businesses now enjoy.

How much tax revenue would the 9-9-9 plan generate?

The big question, after how much would you pay, is how much money would the plan generate for the federal government? It's hard to say. For instance, Cain's corporate income tax is based on gross income of businesses less investments, purchases from other businesses and all dividends paid to shareholders. But gross income figures are not always available, nor would be the value of the credits in Cain's system. We also don't know how spending habits might change if a national sales tax was enacted. Still, some people have at least attempted to quantify the impact. The Washington Times published an opinion piece Sept. 25, 2011, that attempts to put a number to the plan. The story used total personal income figures generated from University of New Mexico's Bureau of Business and Economic Research to estimate that the 9 percent personal income tax would generate around $1.1 trillion a year (the figure appears to not include charitable deductions). It used U.S. Census figures to determine spending in the retail industry -- and calculated that a 9 percent national sales tax would generate around $380 billion. And, using a method that we don't completely understand, they estimated that a 9 percent corporate income tax rate would generate $270 billion. In total, that's about $1.8 trillion, though a rough, rough estimate. That number is about $360 billion less than what the government currently takes in -- about $2.16 trillion.

I can certainly understand why the rich and the wannabe rich think it is a good idea. What I don't understand is why so many others think it is. Do we really want the national debt to increase by another 15% so so a year while rich people pay even less?

 

[mrt144]

You can buy regular non name-brand shoes, I promise, they work just fine. Most of the stuff that poor people buy won't be hit by the tax. They still receive vouchers like in the current system. But if they want to buy Nike instead of generic shoes or buy Polo instead of the $5 walgreen's shirt, they will have to pay tax like everyone else.

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.

 

[warpus]

9% sales tax sounds low to me. What am I missing? (It's 13% here)

 

[Archbob]

9% sales tax sounds low to me. What am I missing? (It's 13% here)

Its on top of state and local sales taxes

 

[Dachs]

Haha, Virginia sales tax is like 4% (Fairfax County adds an extra 1%).

 

[Formaldehyde]

edit: x-post.

 

[Archbob]

Whatever the result, you guys better brace yourself for the reign of Cain!

 

[warpus]

Its on top of state and local sales taxes

Ahh I see.

On a road trip a couple years ago I noticed how cheap everything in the U.S. is.. including the taxes. We went to a fancy restaurant and got amazing steak meals with 2 pints each for like $25.. after taxes! It was insanity..

You guys have it good.

 

[mrt144]

Whatever the result, you guys better brace yourself for the reign of Cain!

$100 says Cain won't win.

 

[Cutlass]

Whatever the result, you guys better brace yourself for the reign of Cain!

He won't beat Obama. No chance.

 

[NickyJ]

$100 says Cain won't win.

$1000 dollars says he won't finish second or higher at the end of the Republican primaries.

 

[Quackers]

Strangely, amadeus and I are in complete agreement about the plan, although for vastly different reasons.


And that means what?
He has no experiance in the legal realm or in any other area that would suit him as an executive because the government is not a business and should not be run like a business because it has vastly different goals and responsibilities.
He isn't a joke, but a very bad candidate. Santorum is a joke though.

..and why would a "lawyer" be any better?
Correct me if I'm wrong, but doesn't a large proportion of your representitives have a "legal" background? It seems a pretty narrow group to draw from.

 

[mrt144]

$1000 dollars says he won't finish second or higher at the end of the Republican primaries.

I wonder how we can parlay these into ownership of FAL's company

 

[Archbob]

If the jobs thing doesn't turn around, Obama's not winning in 2012.