The Herman Cain 9-9-9 Plan

[jgoose71 0]

The more I look into it, the more I like it. Here is the Meat and Potatoes of it:

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Dubbed the “9-9-9 plan,” Cain’s proposal, which he has been touting for several weeks, would restructure the tax code to include a 9 percent corporate and personal flat tax and a 9 percent national sales tax. Taxes on repatriated profits would also be eliminated along with payroll taxes and the estate tax.

http://www.nationaljournal.com/politics/cain-touts-9-9-9-economic-plan-in-wsj-op-ed-20110915

I've done searches trying to find opposition or what anyone thinks might be wrong with this plan, and right now all the liberals are parroting this post:
http://www.dailykos.com/story/2011/09/10/1015350/-The-danger-of-Herman-Cains-9-9-9-plan

The author makes the argument that lower income families will have to pay a higher tax rate and a 9% sales tax will kill them. He also goes on to say that he wants people to be able to think for them selves. So I did that, and here is my counter arguments:

1. While there is a 9% national sales tax, it doesn't mean squat because the 35% corporate tax has been rescinded. With all cost eventually being pass to the consumer, the consumer still makes out.

2. The 9% becomes a consumption tax. You pay yourself first. If you put your money in savings, it doesn't get taxed.

3. This will lower the costs of American goods here in the U.S. that are shipped over sea's and raise the costs of items built by china and brought to the U.S. This will make us more competitive on the global market. It may even possibly move some jobs back to the U.S.

An Article about corporate taxes:
http://www.nytimes.com/2011/05/03/business/economy/03rates.html

I'm also scratching my head trying to figure out how liberals are for a VAT tax, but not the 9-9-9 plan. They both raise the costs of goods.

Another item I really like about the plan is that it levels the playing field for all businesses. There is no more favorites or subsidies. Companies make it on their own merits. It also means GE would pay taxes on it's $20 Billion in profits as loop holes will be closed.

Also, companies will know exactly how much they will have going in and coming out. Consistency. They can hire accordingly.

One last item. Herman Cain talked about "Economic Power Zones". Basically in low income ghettos getting tax breaks for companies that move in to further their development. Can't decide is that is good or not yet. We'll have to wait and see.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[quade 4]

I also heard he was giving away free cake, puppies and jet packs.

If you look at the total amount of taxes vs US GDP you'll see it's in the neighborhood of 24-27% depending on who's running the numbers. 9% is far too low to pay our current bills and there is not really a way to cut our current bills to that level.

quade -
The World's Most Boring Skydiver

[chutem 0]

My first thought is that people with a lot of dispoable income will be less likely to spend it if they can avoid being taxed by holding on to it. How will this effect the economy?

I'm growing less trusting of corporations (in general not only in this instance) to "share the wealth" by passing on their tax savings to consumers. Over time it should happen through competition, but that may take awhile.

Questions I have would be "elimination of payroll taxes" does this mean no SS or medicare taken from employers/employees. How are they funded or are they scrapped? Would the country have taken in more or less in taxes on this plan? Since you support this plan how would it effect you personally, would you pay more or less?

This is my quicky I have not looked into it very hard view. I'm sure someone can tell me what an idiot I am.

James

[jclalor 12]

So the wealthy receive a huge tax cut and the majority see a major tax increase? Good luck with that.

[billvon 2,991]

>The Herman Cain 9-9-9 Plan

Sounds like a good start. Where does the rest of the money to run the government come from?

[jclalor 12]

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Sounds like a good start. Where does the rest of the money to run the government come from?

[chutem 0]

Around the Phoenix valley we see in the nieghborhood of 8% to 10% state and local sales tax depending on where you are. Add 9% and we are up to 17-19%. I'd think very hard about my purchases at that point. This would probably amount to a tax increase for me as I have not done very well the last few years.

I have to agree with BV that we must increase tax revenue and reduce spending. How far in debt do we want to leave our children?

James

[jgoose71 0]

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I also heard he was giving away free cake, puppies and jet packs.

If you look at the total amount of taxes vs US GDP you'll see it's in the neighborhood of 24-27% depending on who's running the numbers. 9% is far too low to pay our current bills and there is not really a way to cut our current bills to that level.

Yes 9% is one of the nines. If you add up all 3 nines, you get a 27% total tax rate. Corporate tax, income tax, and sales tax. All the money going in and out gets hit at those 3 levels. Not just 9% and that's it....

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[jgoose71 0]

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Around the Phoenix valley we see in the nieghborhood of 8% to 10% state and local sales tax depending on where you are. Add 9% and we are up to 17-19%. I'd think very hard about my purchases at that point. This would probably amount to a tax increase for me as I have not done very well the last few years.

I have to agree with BV that we must increase tax revenue and reduce spending. How far in debt do we want to leave our children?

James

You didn't read my post very closely did you? Corporate tax rate is 35% That's a cost that is already passed to you when they sell their products. Reduce the Corporate tax rate to 9% and add a sales tax of 9%, your extra cost being passed to you is now 18% instead of 35%

And if you decide to invest your money, you only pay the original 9% income tax.

Just shuffling the numbers so taxes get applied in different areas to help benefit you a little more.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[quade 4]

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Yes 9% is one of the nines. If you add up all 3 nines, you get a 27% total tax rate.

Not even close. While 3 times 9 does, in fact, equal 27, that would NOT be the total taxes collected expressed as a percentage of GDP.

quade -
The World's Most Boring Skydiver

[jgoose71 0]

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Yes 9% is one of the nines. If you add up all 3 nines, you get a 27% total tax rate.

Not even close. While 3 times 9 does, in fact, equal 27, that would NOT be the total taxes collected expressed as a percentage of GDP.

Care to Expand on that? You are doing a horrible job arguing your case.

This is what I get when looking at Taxes collected Vs. GDP
http://www.deptofnumbers.com/blog/2010/08/tax-revenue-as-a-fraction-of-gdp/

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[quade 4]

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Yes 9% is one of the nines. If you add up all 3 nines, you get a 27% total tax rate.

Not even close. While 3 times 9 does, in fact, equal 27, that would NOT be the total taxes collected expressed as a percentage of GDP.

Care to Expand on that?

You've already done it yourself. You simply don't realize it because you're mesmerized by the seeming simplicity of the fallacy presented by the way the "plan" has been framed.

You think 9% corporate plus 9% person plus 9% sales would equal 27% of GDP, but that's simply not the case.

Reread your own analysis;

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Corporate tax rate is 35% That's a cost that is already passed to you when they sell their products. Reduce the Corporate tax rate to 9% and add a sales tax of 9%, your extra cost being passed to you is now 18% instead of 35%

And if you decide to invest your money, you only pay the original 9% income tax.

So where, exactly, would the additional money come from?

quade -
The World's Most Boring Skydiver

[jclalor 12]

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You didn't read my post very closely did you? Corporate tax rate is 35% That's a cost that is already passed to you when they sell their products. Reduce the Corporate tax rate to 9% and add a sales tax of 9%, your extra cost being passed to you is now 18% instead of 35%

And if you decide to invest your money, you only pay the original 9% income tax.

Just shuffling the numbers so taxes get applied in different areas to help benefit you a little more.

[chutem 0]

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Around the Phoenix valley we see in the nieghborhood of 8% to 10% state and local sales tax depending on where you are. Add 9% and we are up to 17-19%. I'd think very hard about my purchases at that point. This would probably amount to a tax increase for me as I have not done very well the last few years.

I have to agree with BV that we must increase tax revenue and reduce spending. How far in debt do we want to leave our children?

James

You didn't read my post very closely did you? Corporate tax rate is 35% That's a cost that is already passed to you when they sell their products. Reduce the Corporate tax rate to 9% and add a sales tax of 9%, your extra cost being passed to you is now 18% instead of 35%

And if you decide to invest your money, you only pay the original 9% income tax.

Just shuffling the numbers so taxes get applied in different areas to help benefit you a little more.

I read your post and addressed that in my first reply. I don't trust corporations to pass the savings on to us. In the long run I could see it through competition. In the short run. I see corporations calling it more profit.

I'm guessing you are in a position to benifit from this plan. I hope the economy picks up and I can once again be in a position to benefit from a plan such as this. The question I have to ask myself is "is this a plan that will benefit our country in the long run/will this plan leave my children further in debt?" What say you to this?

In 2010 would this plan have generated more tax revenue for the US? I believe we need more tax revenue and decreased federal spending. I'm prepared to spend a little more on taxes (only if spending is cut and not to reduce taxes on the wealthy) are you?

James

[DaVinci 0]

Well except that when the current income tax rates were put into place in 1913(?) the top rate was 7%. But by 1944 it was 94%

So any tax that is new, WILL be raised as soon as the Govt can.

The Govt has a spending problem. They need to quit spending out of control.

I am a fan of a flat rate tax. Some uber economic genius figures what we need to run the current spending, adds in an amount that will reduce the deficit in say 10 years. Then adds all the income from ALL sources of ALL Americans and then figures out what % they all would have to pay to cover that number. Any deficit would be added to next years number, and surplus would be reduced.

I have seen numbers years ago that would put that number around the 20% mark.... It might be higher now that the deficit has doubled.

EVERY citizen needs to pay some amount of tax. Only then will they actually care how the country is run. If you continue to allow over half the country to pay nothing and reap the benefits of the other 50%... You are asking for trouble.

There could be some deductions.... 401k's, medical expenses... But the tax code SHOULD be so simple that a guy with a High School education a blank piece of paper and a calculator should be able to figure it out.

A flat RATE is the only "fair" tax.

[billvon 2,991]

>It doesn't even need to be a 'flat rate' but it should be simple enough to fit on an index card.

Easy. 40% on every dollar you make over poverty level.

[DaVinci 0]

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Easy. 40% on every dollar you make over poverty level.

And you got the 40% from?

And define "poverty level"
HHS Poverty Guidelines?
10,830 for one and $3,740 for each additional person?

Could work.

But I'd really like to see where you got your 40% number.

[jgoose71 0]

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So where, exactly, would the additional money come from?

Well, honestly, I was thinking the money would be made up in 2 area's.

1. Imported items. Over seas companies don't pay taxes. American companies go over sea's to create tax shelters. The 9% sales tax address that problem. Right now this is the current tax rate these people are being hit with:
http://en.wikipedia.org/wiki/Tariff

2. These are flat tax rates. As i posted earlier, GE made $20 billion last year and actually got money back from the government because of subsidies and tax advantages. Under this new plan, that would go away. Everyone would pay there fair share. While the Corporate tax rate is 35%, established companies that can afford lawyers don't pay this. It's typically only the small business man.

To expand on Item number one, this will also decrease the cost of business in America, which will allow us to be more competitive over seas, increasing jobs.

My biggest problem that I have with the way the current US economy model is being ran is all manufacturing has pretty much left the country. This will increase the cost of importing while decrease the cost of exporting, hopefully moving a textile plant or 2 back from Singapore to the US.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[kallend 2,027]

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If you continue to allow over half the country to pay nothing and reap the benefits of the other 50%... You are asking for trouble.


A flat RATE is the only "fair" tax.

Maybe citizens of those "red states" that freeload off the others should pay more. That would be "fair".

...

The only sure way to survive a canopy collision is not to have one.

[mnealtx 0]

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If you continue to allow over half the country to pay nothing and reap the benefits of the other 50%... You are asking for trouble.


A flat RATE is the only "fair" tax.

Maybe citizens of those "red states" that freeload off the others should pay more. That would be "fair".

Sweet - they can return the 'fairness' by keeping the food/energy/water they currently ship to the blue states.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[kallend 2,027]

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If you continue to allow over half the country to pay nothing and reap the benefits of the other 50%... You are asking for trouble.


A flat RATE is the only "fair" tax.

Maybe citizens of those "red states" that freeload off the others should pay more. That would be "fair".

Sweet - they can return the 'fairness' by keeping the food/energy/water they currently ship to the blue states.

Those are commercial transactions rather than freeloading off taxpayers. Free market should take care of that.

...

The only sure way to survive a canopy collision is not to have one.

[mirage62 0]

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Maybe citizens of those "red states" that freeload off the others should pay more. That would be "fair".

Thats about as dumb as saying you should move back home

Kevin Keenan is my hero, a double FUP, he does so much with so little

[kelpdiver 2]

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Maybe citizens of those "red states" that freeload off the others should pay more. That would be "fair".

Sweet - they can return the 'fairness' by keeping the food/energy/water they currently ship to the blue states.

NOW this would be an interesting one to see you back up with actual facts. Not sure how you'll establish ownership of the water though. Food is a bit clearer. Energy is less so, since there have been different oil spots at different points in history.

For all the talk about California's poor government, the 20B deficits that were faced in recent years closely matches the net contribution made by the state to the Feds.

[rehmwa 2]

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For all the talk about California's poor government, the 20B deficits that were faced in recent years closely matches the net contribution made by the state to the Feds.

if it's a wash, then what's the point?

For that matter perhaps Cali could have done a much better/cheaper job with handling their own affairs without any Fed strings attached.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[billvon 2,991]

>For that matter perhaps Cali could have done a much better/cheaper job with handling
>their own affairs without any Fed strings attached.

It likely could have - but then the red states would have been in an even worse bind.

As always there are no easy answers.