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Posted on 11/05/2011 12:21:06 PM PDT by SeekAndFind
Republican presidential candidate Herman Cain has done the nation a great service by proposing major changes in the byzantine way the U.S. government collects its revenue. Cain maintains that his so-called "9-9-9" plan restructures the nation's tax system in a way that significantly boosts real growth. He also claims that his program is revenue-neutral. This means that it is designed to replace the revenues generated by the current tax system.
Restructuring the U.S. tax system along the lines Cain proposes might promote explosive economic growth. However, there are serious problems with tax proposals that claim to be revenue-neutral. One potential flaw is a tendency to assume that individuals will behave the same way regardless of the tax system. If this were true, there would be no reason to change current system.
The main reason to change the tax structure is to remove impediments to economic growth. If the new structure succeeds in doing so, it can improve economic activity and raise both incomes and revenues.
The failure to account for the dynamic impact of a positive structural change in taxes can inadvertently lead reformers to propose changes that increase the overall tax burden. This is the case with the proposed "Fair Tax," which would replace all federal taxes with a national sales tax.
Insisting on revenue-neutrality places the government's need for revenue above the needs of individuals. In an effort to ensure that government receives the same claim to revenue as before, estimates of the necessary national sales tax often amount to 20-30 percent. While the structure of such tax may appear superior to current system, the immediate impact of an abrupt shift to such higher rates risks retarding economic growth rather than promoting it. That will lead to a spiral of less-than-expected revenues, higher tax rates, and so on.
(Excerpt) Read more at americanthinker.com ...
So put some ice on it.
You mean we should kill it with a hatchet?
Actually, word play aside, I'm with you. Having an ever growing segment of the population exempt from taxes is a recipe for disaster.
I like the 9-9-9 plan as it is because a similar such plan turned Ireland from a backwater into the Celtic Tiger. It WOULD force people like illegals not in the system to pay a share and vastly reduce the inconvenience of the present tax code for those who are in the system. If we scrap the 16th Amendment, all the better. As for those who say that 9-9-9 will be 10-10-10 or 11-11-11, well, what’s stopping them for raising the rates now?
Oh yeah, Kill it with a hatchet is my first choice too. :-)
So much easier to cling to your fantasies about Cain and his scheme. So where does it say anywhere that Cain's plan does away with excise taxes? Or is this one of those "Well, he hasn't said it does away with them but that's probably what he means" kind of things?
Nonsense. Payroll taxes are a business expense and as such are used to reduce taxable income. In your Cain world a dollar of income is, with few exceptions, a dollar taxed. Currently if I have a company with $1 billion in revenue and a 10% profit margin then I'm taxed on $100 million, maybe a maximum of $35 million in taxes. Under your Cain world then potentially I have $1 billion in taxable revenue, unless I operate in a 'empowerment zone' and less any goods I buy from U.S. manufacturers. For a company in a service industry like a bank or insurance company or consulting company then if I make a billion I'm taxed on a billion. My taxes more than double.
Unless, of course, this is also one of those "Cain really doesn't mean what he says" moments?
This is MY HOPE TOO!
Install the Sales Tax and DITCH the IRS & the Income Tax!!
That’s the FORMULA!!!!
let’s VOTE on it. OK?
Bite your tongue.
It's enough to make one go Galt.
Try making a factual, not selective, analysis of the whole plan. You need to stop with your habit of just picking certain fact and ignoring all the other facts in order to get your pre determined answer you want to believe
I’m sorry I assumed you were smart enough to have your saving invested not just tucked away in a 1% saving account
I look at the plan that is on his website. I guess I'm not privy to the super-secret 9-9-9 plan that only true believers have access to and which contains all the clarifications like doing away with excise taxes and which somehow doesn't tax businesses as much as the website plan does.
I keep showing your where you always make the same error and you keep repeating it. Impossible to pry open a welded shut mind.
I have a much better plan.
1) Eliminate all income taxes - federal, state, local. Period.
2) Do NOT impose any federal taxes on human beings or on corporations. Instead, impose those taxes on the states themselves apportioned by population. Let the individual states determine how to pay those taxes.
Gee! That sounds like something I read in the Federalist Papers! /s
Idiotic rationale. Since you'd be paying the same new tax they'd be paying, you as an American taxpayer would gain nothing. You'd be breaking even at best.
“Idiotic rationale. Since you’d be paying the same new tax they’d be paying, you as an American taxpayer would gain nothing. You’d be breaking even at best. “
Actually, I get a nice cut in my income tax, so I’ll roughly break even. It’s the Illegals that are paid under the table and do not pay virtually ANYTHING to run this country that I want to see step up (at least until they’re deported).
You’re a tax accountant, right? Lies come so easy to you guys.
“Again desperately clinging to the existing tax code, as this author is, is exactly the problem.”
What ? There is nothing in this article that suggests clinging to the existing tax code. He only points out how much revenue Cain’s plan would generate, and says omitting the 9% sales tax while retaining Cain’s other two ‘9’s exactly as Cain proposes them would raise enough revenue.
The 9% sales tax is unnecessary. The 9% personal income tax and the 9% business tax, together with the explosive economic growth they would generate, would raise as much revenue as today — without opening the door to a national sales tax.
So only businesses that are well-run and profitable should pay taxes, while poorly run businesses should not pay taxes ?
That’s messed up.
Have you forgotten that poorly run businesses pay taxes today ? 7.65% of their payroll, or 15.3% of payroll if self-employed. Cain’s business tax bumps this to 9%, while also eliminating the employee 7.65%.
“...in those states that don’t have one now.”
Actually, even in those states that already have one, bumping it up by 9% will make a combine 18% sales tax in states like CA and NY. That high a rate makes for a big disincentive to spend or a big incentive to go black market.
I think the article is exactly correct. Of course, I’m biased. I’ve been making the same point for weeks. The 9% sales tax is unnecessary and would actually raise more tax revenue than the current tax code. Cain’s plan is a good one without the sales tax component.
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