[NC28203]

>>>I really can't see how a manufacturer who buys raw materials for what ever he manufactures is exempt from paying those taxes. Actually, companies that use a product as an input in creating another product do not pay sales tax on that input. For example, firms can apply for a sales tax exemption certificate from the state they operate in that they can provide to their vendors who in turn do not charge sales tax. A similar process could happen at the federal level.

The problem with the baked in taxes argument is in how the corporate tax is charged. Currently it is 35% of profits. The 9-9-9 plan makes it 9% of gross receipts less investment expenses. Labor is no longer a deductible expense under this plan. So firms go from paying the 7.5% payroll share on the first $106,000 of an employee's imcome to paying 9% on whatever the employee makes with no limit.

[NC28203]

>>>I really can't see how a manufacturer who buys raw materials for what ever he manufactures is exempt from paying those taxes.

Actually, companies that use a product as an input in creating another product do not pay sales tax on that input. For example, firms can apply for a sales tax exemption certificate from the state they operate in that they can provide to their vendors who in turn do not charge sales tax. A similar process could happen at the federal level.

The problem with the baked in taxes argument is in how the corporate tax is charged. Currently it is 35% of profits. The 9-9-9 plan makes it 9% of gross receipts less investment expenses. Labor is no longer a deductible expense under this plan. So firms go from paying the 7.5% payroll share on the first $106,000 of an employee's imcome to paying 9% on whatever the employee makes with no limit.