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Problem with Perry’s tax plan are numerous.

Perry’s plan is a “what do I need to say to get votes” plan rather then “what do we need to do to fix the tax code” plan.

It does not broaden the tax base thus leaving the current system of payers and payees in play for future political exploitation.

It keeps in place the corrupt practice of playing favorites in the tax code by still granting special exemptions. This is the greatest flaw in Perry’s plan. He leaves in the politically popular exemptions to pander to certain voter blocks. It the best example of where his plan is not a serious attempt to address the fundamental problems in the tax code but a political gimmick designed to rejuvenate his flagging campaign.

It maintains the current focus on taxing income instead of consumption thus punishing the producers at the expense of the users.

It leaves in place the current ability for trust funds and the massively wealthy to avoid paying any tax by structuring their payouts in forms other then income.

It does nothing to tap the underground off the books economy.

So while Perry’s “sort of flat tax” is an improvement over the current system, it is merely tinkering with the existing tax code while leaving in place the same corrupt, flawed foundation.

Of the two, Cain’s 9-9-9 is the much better plan

Whenever the issue of raising taxes on the “rich” has arisen, I have attempted to bring the forgotten stakeholder in all such arguments into the discussion-the consumer.

I’m pretty sure most on this forum are aware that the “rich” happen to be our employers, entrepreneurs, and investors, and my contention has been that taxes are an expense to them, such that every good and service produced will have included in its end price the taxes charged. The consumer, in the end, pays for all tax increases, especially those levied on the aforementioned producers. This is a very good argument to use with liberals who advocate increasing taxes on the “rich”.

When looking at the Cain and Perry plans, I can’t help but feel the consumer is being ignored once again.

Perhaps the most important benefit of the Cain plan is that there will definitely be some unknown and in my view unquantifiable reduction in the cost of goods produced and services rendered. This will happen by virtue of the fact that taxes are a cost of producing these goods and services, and these taxes will go down during each step of the production process, on up until the purchase at retail by the consumer.

It’s my bet that this reduction in prices to consumers would be significant. It only takes one player in any given market to decide it will use the new cost structure to increase market share, then all other players will have to follow or perish.

I say the effect is unquantifiable because it will depend on the relative competiveness of any given market. I own a small company and I can assure you my competitors will lower their prices by virtue of any reduction in cost, and I will have to react to remain competitive, as all players in my industry are vying for market share in addition to profit.

Just my two cents.

Yes.

Perry’s plan leaves the Fedzilla tax code in place indefinitely. (Although any major reform will have a transition period where the old tax code is being phased out, Perry’s plan doesn’t do that. The old tax remains.)

Thus, crony capitalism and corrupt funneling of favors will continue. And may even increase, since the number of tax payers paying under the code will decrease, thus there will be fewer people paying attention than even are now.

Some argue the flat tax will be so great that the old Fedzilla code will die on the vine, a natural death, the result of “choice.”

DON’T BET ON IT.

If history teaches us anything, it is that the Fedzilla code will never die unless it is killed. 999 sticks a knife in it. That is necessary.

The congresscritters and special interests will get even busier entrenching their schemes, payoffs and rip-offs into the code, all the while arguing that it’s continued existence is necessary for “choice” and that “it’s not fair” because they might lose ten cents under the flat tax.

Perry’s flat tax provisions are very generous and provide many jellybeans to present taxpayers.

But overall the plan is a disaster without a clear way to kill the Fedzilla code and a clear way to broaden the tax base, and thus make most Americans have a stake in the system and ALL congresscritters accountable to ALL their constituents if they raise tax rates.

It keeps in place the corrupt practice of playing favorites in the tax code by still granting special exemptions.

As opposed to Cain, who not only adds an entirely new tax to the federal code, but also has entitlement zones to give favored taxpayers special rates and treatment, based on how well their communities either lobby for exemptions or bend their will to whatever the federal government orders them to do.

It does not broaden the tax base

It does not raise taxes on the poor and middle class, unlike the Cain plan, which does.

It maintains the current focus on taxing income instead of consumption, punishing the producers at the expense of the users.

Income tax doesn't "punish" producers. It collects money from individuals to support government services, at the point where they get the money. people who earn income are not "the producers"; some certainly are, and some are not. But they are ALL the "users", i.e. the consumers who would pay sales tax.

Not only is income tax a good thing, as income is money people actually have, while consumption is money people need to spend to live, but what exactly do you think the 1st 9 is in the Cain plan -- it's an INCOME tax. And his 2nd 9 is a CORPORATE INCOME tax. Only the 3rd 9 isn't income tax -- instead, it is a brand new taxing authority for the federal government, subjecting every business in the country to a whole new set of rules, regulations, and required filings with the federal government.

This 9 percent tax on every sale in the country, be it local, mail order, catalog, or online, dwarfs the attempts to allow states to make business collect their taxes for online purchases. It's easy to support that and not Cain's plan, since states already tax online sales, and the collection issue is one of enforcement, not a new tax.

But ANY person who argues that it would be a disaster to collect state sales tax on online purchases has to oppose Cain's plan, which slaps a new 9% tax on those purchases.

The problem with income tax isn't the concept, it is the government using the different rates to treat people differently. The flat tax and the 9% tax take care of that problem. Except if you add entitlement zones where people pay 3% or 0% based on favored status, like being a poor black person in a failed liberal enclave.

It does nothing to tap the underground off the books economy.

Cain does only if you assume the underground economy can't include laundering new products to market as used, or selling off the books.