Sorry, Wrong Number 9-9-9

The American Spectator ^ | Ross Kaminsky

[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.

[Bailee]

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.

[Future Snake Eater]

1) Absolutely, the 16th Amendment must be repealed first.

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

[Bailee]

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.

[CynicalBear]

>>“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.

[Bailee]

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.