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Sorry, Wrong Number 9-9-9
The American Spectator ^ | Ross Kaminsky

Posted on 09/30/2011 8:42:11 AM PDT by Cincinatus' Wife

....Of Mr. Cain's many ideas, the most well-known -- in part because of its clever sound-bite name -- is his 9-9-9 plan which aims to replace most current federal taxes (including income tax, death tax, payroll tax, capital gains taxes, and double-taxation of dividends) with a 9% flat tax for business income, a 9% flattax for individual income, and a 9% national salestax. The plan would eliminate almost all deductions.

While Mr. Cain's consistent results-oriented approach is admirable -- not least for its contrast with the other candidates -- voters should be wary of the 9-9-9 plan despite its initial appeal. In short, it is somewhere between folly and economic suicide to implement a national salestax, even at a modest rate, without simultaneously repealing the 16th Amendment to the Constitution (which permits a national income tax.)

There is in economics a relatively new concept known as Hauser's Law, named for its creator, economist Kurt Hauser of the Hoover Institution. Hauser's law posits that the federal government cannot take more than about 19.5% of national income through taxation and that soaking the rich (or those whom President Obama defines as rich) will not generate the tax revenue..........

• United Kingdom: 36.1% total taxes/GDP, with a VAT rate of 17.5 percent taking 6.8% of GDP. (The UK's VAT rate has since been raised to 20 percent.)

• Germany: 36.7%, with a 19 percent VAT taking 6.7% of GDP.

• France: 43.7% total taxes/GDP, with a 19.6 percent VAT taking 7.3% of GDP

In other words, governments of these countries which have national sales taxes take far more of the national wealth than we do in the United States. There are several European countries with even more punishing VAT and income taxes, with Denmark's government confiscating an astonishing 48.8 percent of national income.

(Excerpt) Read more at spectator.org ...


TOPICS: Business/Economy; Extended News; Government; Politics/Elections
KEYWORDS: incometax; nationalsalestax; revenue; taxation
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To: Stosh
There is no VAT in 9-9-9. The sales tax is just that - a tax on new retail sales. There is specifically no business-to-business tax. Purchases from other businesses are deductible from the business income tax.
51 posted on 09/30/2011 1:21:30 PM PDT by newzjunkey (Obama wins reelecton; GOP will find a way to lose.)
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Comment #52 Removed by Moderator

To: Bailee
9-9-9 would not tax any of that because food is exempt. But if it were not, it would only tax the groceries. The final sale, not each step of production.

Right now those items ARE taxes at the current 35% Business tax rate since each business has to pay it taxes out of profits generated in each sale. SO 9-9-9 would actually reduce the tax burden on these items

53 posted on 09/30/2011 1:23:18 PM PDT by MNJohnnie (Giving more money to DC to fix the Debt is like giving free drugs to addicts think it will cure them)
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To: Bailee
I am with holding my opinion of 9-9-9 until I can see an explanation.

The plan is outlined on his web site.

He told Chris Wallace the other Sunday a detailed version is coming that he wants professionally scored.

54 posted on 09/30/2011 1:25:59 PM PDT by newzjunkey (Obama wins reelecton; GOP will find a way to lose.)
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To: Stosh
What stops the current political class from doing that very thing under the existing tax code?

The same political and economic pressure that prevents the Congress from simply hiking tax rates when ever it feels like now, would apply to even a great extent in a 9-9-9 system.

Everyone pays so everyone knows any tax hike means they pay more. Under 9-9-9 the is no more illusion that someone else is paying for your "help" from the Government

55 posted on 09/30/2011 1:36:40 PM PDT by MNJohnnie (Giving more money to DC to fix the Debt is like giving free drugs to addicts think it will cure them)
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To: KansasGirl

The problem I’ve got with 9-9-9 is that down the road its liable to be 20-20-20.


56 posted on 09/30/2011 1:48:20 PM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: Bailee
>>Then Theorectically a Farmer that produces 100% of what he Consumes will pay NO tax at all.<<

Good grief man. A farmer buys a $200,000 tractor, a $50,000 wagon, a $100,000 corn planter, a $50,000 manure spreader and other high cost items. Then he buys clothes, appliances, and all the other stuff any of us buy. How in heavens name did you think he was going to get by with no tax at all?

57 posted on 09/30/2011 2:19:32 PM PDT by CynicalBear
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To: HerrBlucher

For some only Red Meat Rhetoric is what counts, actions and experience not so much.


58 posted on 09/30/2011 2:30:27 PM PDT by jgge
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To: Stosh

Please people!!!! Learn the difference between a VAT and NST. DO not use the terms interchangeably- they are vastly different!


59 posted on 09/30/2011 2:45:25 PM PDT by Mygirlsmom (Am I too old to ask for emancipation from the "Federal Family"?? Sarah Palin)
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To: NavyCanDo
From my 2010 return accounting for all my deductions, My tax owed came to just a little under 9 percent. So with Cain's plan IF that means no more deductions, or tax credits I would be paying a few hundred dollars more than I do now.

Actually, it would be less. Your 9% tax owed was in addition to the 6.5% you paid for Social Security (actually, you pay 13%, your employer merely remits the other half on your behalf) and the 1.5% or so for Medicare. Both of those are eliminated under 9-9-9

60 posted on 09/30/2011 2:50:33 PM PDT by Mygirlsmom (Am I too old to ask for emancipation from the "Federal Family"?? Sarah Palin)
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To: CynicalBear

Please Read.

“Theorectically a Farmer that produces 100% of what he Consumes will pay NO tax at all”

It is Possible the Amish could come pretty close if they wanted to.


61 posted on 10/01/2011 5:59:39 PM PDT by Bailee
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To: Cincinatus' Wife

1) Absolutely, the 16th Amendment must be repealed first.

2) Why does he keep listing out VATs while talking about a national sales tax?


62 posted on 10/01/2011 6:02:43 PM PDT by Future Snake Eater (Don't stop. Keep moving!)
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To: MNJohnnie

Sorry food production of cattle was the Simplest form of getting something from raw material to finished product that I could think of.

Very little added to the Process but labor and Shipping.

And taxing just the Final sale is definitely not a Vat Tax.

But we cannot say which method would reduce the tax burden. For that we would need to know how much Profit the Farmer, Butcher, and Grocer made to calculate their current tax burden.


63 posted on 10/01/2011 6:21:47 PM PDT by Bailee
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To: Bailee
>>“Theorectically a Farmer that produces 100% of what he Consumes will pay NO tax at all”<<

You obviously have no concept of what a farmer has to purchase. No way “theorectcally” would a farmer get by without paying sales tax.

>>It is Possible the Amish could come pretty close if they wanted to.<<

They do now. They keep their own seed, make many of their own tools and purchase very little other then some staples. Cloth to make their clothes and iron for horse shoes etc.

64 posted on 10/01/2011 6:25:55 PM PDT by CynicalBear
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To: CynicalBear

Born and Raised on a Cattle/Corn/Tobacco Farm and for us you are absolutely correct. The amount we had to spend on Equipment, Seed, Fertilizer, Chemicals, and fuel Forced us out of Business.

However I consider the Amish to be Farmers as well. Whether you till 40 Acres, Hundreds or Acres, Or even thousand of acres. If you raise your family tilling the soil you are a Farmer.


65 posted on 10/01/2011 6:41:21 PM PDT by Bailee
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