9/9/9, the + and -

[luzribeiro.livejournal.com]

With the lack of unbiased reporting these days, I am interested in hearing from smarter people than myself on exactly WHY they think Cain's 9/9/9 plan is either a good idea or a non-starter, why it would or wouldn't work, and why it would be unduly burdensome to some - but not to others. Let's assume, for the purposes of discussion, that the plan COULD pass. (Let's not just say "I don't like the plan because I don't think the bill would pass.")

Let's also assume the following:

1) That the plan would completely replace the current tax system.
2) That the plan would include a 9% national sales tax on purchased goods, but not on services.
3) That the plan would include a flat tax on income at 9% for every worker.
4) That the plan would include a flax tax on income at 9% for every corporation.

Come on, help me understand this. You know you want to!

Comments

[caerfrli.livejournal.com]

It would be seriously regressive.
Low income people would pay a much higher share of what they have than higher income people.
This will discourage consumer buying (since the rich will not likely buy much more than they already do while the poor--of whom there are many more--will buy less), depressing prices, wages and employment and spiraling the economy down further.
In addition, without tax breaks charities would suffer and people would be less willing to get a mortgage, depressing housing prices further. Other entities, such as green products and so on benefiting from tax credits would also feel the affect.

[eracerhead.livejournal.com]

Calculate everything you purchased last hear and multiply it by 0.09. This is how much extra it would have cost you. Look at how much income tax (not FICA) you paid last year and compare the two.

[telemann.livejournal.com]

That includes medications.

Spoken like...

[sophia-sadek.livejournal.com]

... someone who would purchase a pair of cheap shoes rather than a pair of well built shoes. Just remember: you get what you pay for.

[zebra24.livejournal.com]

It's not really fair, you should took off current business taxation according to current tax code.
Your statement is kind of worst case, when business previously never paid a dime in taxes.

[underlankers.livejournal.com]

It sounds like a pizza deal, and people are dumb enough to think a pizza discount derived from a video game is a workable plan because he's the only Republican to have provided one.

[luzribeiro.livejournal.com]

But people like pizza, don't they.

[peamasii.livejournal.com]

I would think it may be a good idea to have a fixed, flat tax on all income, but no tax on services sounds bad. As I run a small consultant business which buys some goods/services and then sells services only, I need to offset my sales tax expenses (on the items that I buy) by charging tax on services. If I can no longer charge tax on services, then I cannot offset the tax I pay on goods (which is a lot here, 18%), it's obvious why that would be bad for my consumption.

[a-new-machine.livejournal.com]

The issue is that flat income taxes are regressive. If I'm making $25,000 a year, 9% of my income gone destroys a huge chunk of my livelihood. If I'm making $2.5 million, then that 9% has very little appreciable impact on my life.

On religious grounds...

[sophia-sadek.livejournal.com]

One of the problems with Mr. Cain, besides his Biblical name and his history of selling goods under the name of an organized crime boss, is that the man is upside-down. When we turn his plan right-side up, we can see the magic number that the plan represents.

On the other hand, the tax plan will give an great boost to businesses who cater to pampering the rich. Sure, there will be more destitute people hanging onto the sides of railroad cars, but that is what made America great in the first place.

Re: On religious grounds...

[sealwhiskers.livejournal.com]

oh fear not, it will all trickle down somehow on the rest, and besides, the banks will give away loans suddenly, like there's no tomorrow!

[sealwhiskers.livejournal.com]

Here (http://www.politifact.com/truth-o-meter/article/2011/sep/26/facts-about-herman-cains-9-9-9-tax-plan/) is a decent summary of the 9-9-9 shit.

In addition to what others have said, I want to underline once again that non profits and charities would die en masse in the US from the plan, as it looks now. I hope most people understand what that would mean.

There are also some very weak links in Cain's "empowerment zones" addition to the plan. Firstly: many poor are not bundled together in the type of zones Cain's campaign describe, they are mixed in with "other animals" in normal zones. These poor would have two choices - move to a dangerous zone or starve. Secondly, the empowerment zone plan relies on businesses wanting to invest in such areas - now why would they do that when they get a pretty juicy tax break from the plan to begin with? Why move your already thriving business, which has already gotten a huge break, into an area where people are dirt poor and get shot on every day by gangs.

I'm not seeing the empowerment zones working at all, to alleviate the poor.

Lastly: it is *incredibly* hard to predict what this flat tax would accomplish if replacing most other taxes, but there was a study recently conducted by the University of New Mexico's Bureau of Business and Economic Research to calculate how much tax revenue the 9-9-9 would accumulate while using personal income figures and US census figures. It indicates that the Cain' plan would accumulate 360 billion less than current taxes are doing.
Even if this is only half true or one third or fourth, it's still pretty devastating.

Of course it goes hand in hand with those that want to dismantle medicare and medicaid and such, so from such groups you will hear cheering.

Not all charities...

[sophia-sadek.livejournal.com]

... depend on tax deductions. Our charity will continue despite such deformations.

[luzribeiro.livejournal.com]

That's surely an educating link.

[eracerhead.livejournal.com]

Empowerment zone is a euphemism for ghetto. The poor tend to do better when they are integrated into mixed communities.

not exactly.

[zebra24.livejournal.com]

*non profits and charities would die en masse in the US from the plan*
Not exactly.
http://www.hermancain.com/999plan
9% Individual Flat Tax.
*Gross income less charitable deductions.*


**how much tax revenue the 9-9-9 would accumulate while using personal income figures and US census figures**

That's sounds kind of stupid even for me - current figures not something you can account for making such calculations.

360 billions is even less than current tax collection price (430billion)

[meus-ovatio.livejournal.com]

It's the most blatantly self-serving, snivelling, get-rid-of-capital-gains scheming anyone has offered up to date. It's the 9-9-9-0 plan as far as I'm concerned.

[paedraggaidin.livejournal.com]

I am thinking I am one of the few true fans of progressive income tax around here. "Fair Tax," flat tax, and Cain's 9-9-9 idea sound great on paper, and maybe some sort of flat-rate plan is subjectively more "fair," but they're just not, I think, very equitable if they tax the poor at the same rate as the wealthy. 9% of an AGI of $125,000 isn't really going to impact someone's life, lifestyle, or livelihood, whereas 9% of $10,000 could mean the difference between buying food and paying rent (and anyone who says otherwise has never tried to actually live on a minimum wage of around $5.80). I wouldn't mind a flat plan so much, so long as there was a certain income threshold below which income tax is waived (say, $16,000/year for single, $24,000 married, add $1,000 for every kid up to three, something like that).

So, I don't think it's unfair to give a break, even a total break, for low-income workers. What is unfair is to unduly burden the self-employed, and that's one thing I do like about flat-tax plans. It's the one thing that really pisses me off about our current tax scheme. ^$#^%@$ Schedule SE. When I was a Webmaster, one day our boss thought it'd be a brilliant idea to make us all "independent contractors" and so we started getting 1099-MISCs instead of W-2s and had the distinct privilege of filing as self-employed. It really sucks.

The national sales tax, however, is an idea I could really get behind, again so long as it was calculated not to unduly burden the poor; say, by taxing consumer goods at 9%, groceries at 4.5%, and pharmaceuticals at 0%. Again, like income, I think a progressive scale is just more realistic and equitable.

[kylinrouge.livejournal.com]

Or a consumption tax that starts at yearly purchases over $500k.

[oportet.livejournal.com]

I pay 9.5% sales tax, and that includes sales tax on food. I pay well over 9% income tax.

Seems like it would be good for me.

Once implemented it will work just fine.

[zebra24.livejournal.com]

Real problem - lefties including democrats and some republicans will never go for it.
It will just remove most junk part from government and force them to be productive and really produce something good for people, not just headache and fat-asses.
Even babysitting is more productive than all this tax-collection and calculation shit.
Best example is Georgia, reformed by Saakashvili.
It wasn't that simple, but very big simplification of tax code.
Result - solid and steady growth (http://www.indexmundi.com/georgia/gdp_per_capita_%28ppp%29.html) even Russian aggression and crisis hurts it not as much as you can imagine.


Pros:
1) easy taxation (400 billion per year just for reducing IRS expenses), reduces waste on taxation of 300million people
2) Better predictability after settlement
3) No winner/looser selected by government anymore (do you know number of tax exceptions?)
4) Would significantly improve credit ratings and investors expectation for country.
5) New private sector jobs.
6) Less to spend on junk for Obama and more to spend and save for taxpayers.

Cons:
* 999 is a Satan number, that's why it will never happens. (just kidding :)
* Hard to calculate and balance first budget. Needs work to figure out new collected taxes amount.

Re: Once implemented it will work just fine.

[eracerhead.livejournal.com]

It will just remove most junk part from government and force them to be productive and really produce something good for people, not just headache and fat-asses.

You really know very little about public workers.

[kylinrouge.livejournal.com]

"The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation."

"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

-Adam Smith, The Wealth of Nations

[allhatnocattle.livejournal.com]

lj-cut please

[luzribeiro.livejournal.com]

[kardashev.livejournal.com]

Come on, help me understand this. You know you want to!

Umm...no, I don't.

[luzribeiro.livejournal.com]

That's so mavericky!