Wrong. When you remove a 15.3% payroll tax, a 35% corporate tax, and a 35% individual tax and replace it with 9-9-9 it doesn’t measure up. See my last two posts.
In order for the Obamas to make up the shortfall they would have to spend $14,755,022 on items subject to the 9% national sales tax. Take the tax cut of $1,327,952 and divide it by 9%. That’s almost 2.6 times their current gross income. So unless the Obamas run out and buy a new house or new car or figure out how to spend 3 times more than they make on sales tax related goods, that revenue will never come back ‘from them’. The government will either go broke, or the middle class, those making $50K to $75K will really end up paying $4,300 more in taxes just like the Tax Policy Center said.
As you know (or maybe not), not all of the Obamas income is from wages paid by an employer. Actually all $374,460 of his wages were paid by US taxpayers. The other 9% tax on his self-employed business income is already included in the table, and this data is from his actual tax return. Obamas business didn’t really have any expenses, so no sales tax was collected there.
So did taxing the Obamas self-employed business income the other 9% make up the shortfall? No.
So do you want to tax the federal government the other 9% on Obama’s wages too? Do federal state and local governments even pay income taxes? No. So what tax return will they not be allowed to deduct wages from?
So when it comes to government workers, their employers will not pay the other 9%, because their employers don’t pay income taxes. And when it comes to the self-employed, and small business owners some will benefit and some won’t. Those who make more than $330K will clearly pay less in overall taxes under 9-9-9, everyone else will pay more. That’s why this dog won’t hunt.
You’re still not getting it.
In your table, his full income including wages and business profits is taxed only at the personal level. The 9% Business tax would ALSO apply to his profits and wages, since they are not deductible from total business revenue. If it was a corporate structure, and the profits were passed to him as Dividends, then they would be taxed only once at the individual level. But without the corporate structure paying out dividends, the business tax applies to all of it, then the individual income tax applies to all of it AGAIN. Then when it is spent, it is taxed AGAIN, except there is less to spend because it was taxed away by the business and individual taxes.
As you know (or maybe you don’t), the existing 15.3% Payroll tax doesn’t apply to all wages. It only applies to the first $106K of wages, and only the Medicare 2.9% rate applies to the other $268K of wages. Payroll tax doesn’t apply to ANY of the $5.2M in business income. So stop throwing around the 15.3% number as though it applies to all income rather than just a tiny portion of it in cases like this.
You are insincere in suggesting the FairTax appeals to you. You complain that someone with numbers like this tax return would only pay ~$1.4M under ‘9-9-9’, but under the FairTax they would only pay ~$1.2M of their $5.2M income. Probably much less since the FairTax gives them the option of paying nothing if they spend outside the country.
Same with your talk about a “flat tax above a certain exemption amount”. An exemption amount accomplishes nothing but rewarding the low income people for being low income, and guaranteeing a large pool of voters who have no skin in the game and no incentive for responsible government spending.
Your entire rant amounts to professing Marxist ideology — maintain punishingly high tax rates on successful people so you can preserve the tax-freeloaders who’ve failed at life. Rewarding failure and punishing success is the Democrat’s position. You are on the wrong website. Go back to DU where you’ll be more comfortable.