Skip to comments.Sorry, Wrong Number 9-9-9
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 ...
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
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.
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
The problem I’ve got with 9-9-9 is that down the road its liable to be 20-20-20.
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?
For some only Red Meat Rhetoric is what counts, actions and experience not so much.
Please people!!!! Learn the difference between a VAT and NST. DO not use the terms interchangeably- they are vastly different!
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
“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.
1) Absolutely, the 16th Amendment must be repealed first.
2) Why does he keep listing out VATs while talking about a national sales tax?
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.
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.
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.