Posted on 10/15/2011 10:09:54 AM PDT by rob777
There has been a lot of talk regarding where Cain got his 9% number for the income tax, sales tax and corporate tax. Apparently a full analysis was done by economist and former assistant to the director of the Office of Tax Analysis for the U.S. Treasury Gary Robbins. Robbins thinks that the plan would work economically, but would not sell politically:
“You’re trying to go to a system that taxes income once and only once and quits double-taxing savings,” Gary Robbins told POLITICO on Wednesday. “That’s something that can really juice the economy, it’s probably worth 15 percent in growth. … The problem with the big-bang changes like that, the flat tax or the fair tax, is that they are so alien to the current system that it would be a great big shock.”
Though Robbins says the plan would work fiscally and economically, he believes people would never accept such drastic changes. http://caucuses.desmoinesregister.com/2011/10/12/herman-cains-9-9-9-analyst-its-a-theory-not-a-solution/
The actual number that would allow the plan to be revenue neutral is 9.1% (See table 10c on page 8: http://www.politico.com/static/PPM191_111012_999scoringtables.html
I’m just glad that for the first time in a LONG time, we have a leading candidate talking about scrapping the current tax system, and people are taking it seriously.
The debate is long overdue.
I’m not sure if I’m totally in favor of this exact configuration but any consumption based tax has one BIG selling point which is not stressed enough by the sellers. That point being it gives the taxpayer some level of control of their taxes paid.
The taxpayer can buy a cheaper version of a product, defer the purchase or not purchase a product at all.
That has to scare the big spenders big time. People can vote for the government with their pocket books. The boycott will become a potent weapon.
And, while the current nightmarish tax code means it is easy to slip in a hidden increase without anyone really noticing, under Cain's plan, if you do get two-thirds of congress to increase the sales tax (let's say) from 9% to 12%, it becomes VERY obvious to the constituents exactly who needs to be voted out of office.
I think 9-9-9 would have great longterm stability and businesses would really be able to project growth plans for years into the future.
I believe that Cain himself said that The Lord asks for %10 so the Government should ask for less. Sounds good to me!
i agree about both the potential of 999 and the danger.
The danger is that it turns into 30 - 50 - 20 like europe
nevertheless, i commend Mr Cain for putting this forward
It’s the first legit step to an eventual flat tax. I like.
Actually, when first implemented, it WOULD be a form of double taxation, because (assume for example that you have saved dutifully for retirement and paid your (exhorbitant) income and capital gains taxes for 30+ years) you will be taxed again as you spend savings that you have already paid significant taxes on.
Yikes, I read your post and saw Mr Cain as McCain initially- scary
Story: I think Nine-Nine-Nine is a wonderful plan. "I think a lot of the candidates have very good plans for tax reform, but I love the Nine-Nine-Nine Plan. I think it's a great first step [this key].”
-- Economist Arthur Laffer, top tax adviser to President Ronald Reagan, on “ Special Report" with Bret Baier.”
House GOP Budget Boss Paul Ryan told the Daily Caller he “loves” Cain’s plan.
In Republican circles those are two very big boosters, especially for a guy who is said by critics to lack the intellectual heft to be president. Laffer and Ryan both have their own ideas about taxes, but agree Cain’s proposal for replacing the current federal tax structure with a 9 percent tax on corporate profits, a 9 percent national sales tax and a flat 9 percent income tax would be a big improvement over the current convoluted system.
One of the biggest knocks on Cain has been his instance on not identifying his economic advisers other then Rich Lowrie, a Cleveland-based investment adviser. The revelation that Cain consulted with Laffer on the plan and the praise from Ryan, the heartthrob of fiscal nerds everywhere, will go a long way in adding some credibility.[quotes]
But you will never educate those who do not wish to be educated and especially those who still do not even know who the VP is as recently shown segment on the popular NJ Housewives reality episode (Teresa Giudice).
More on link Laffer[Curve]/Ryan[above] and charts of the Harding-Coolidge cuts of the mid-1920s; the Kennedy cuts of the mid-1960s; and the Reagan cuts of the early 1980s.
Cain-Ryan Ticket?
Only allow tax increase votes during a presidential election cycle. That would tame any desire to raise the tax rates.
That’s what scares the politicians, how obvious an increase in taxes would be.
A big shock is just what the system needs.
I’m thinking nuclear.
Or, buy used, or barter.
Actually it came from the German word for “No”. When asked by the German magazine “Der Speigel” if he could ever live through another 4 years of Obama, Cain banged his fist on the table and replied: “ Nine nine nine!”
Correction. It is the first phase of a two phase plan. Phase 2 is the FairTax.
Another misconception is that the tax would be added at the cash register at the time of purchase. It is applied to the retail cost of the item at time of manufacture. When the other taxes on manufacturers are reduced and eventually eliminated, this tax will result in keeping the profit margins very close if not greater once all the federal fees, taxes and regulations that have been swept away.
How is asking that I pay 9% sales tax on top of money I already have been taxed on and have in savings not a double tax?
Mr Cain needs an exemption for current savings.
While I am strongly against a national sales tax before repealing the 16th amendment, I agree the current systems sucks. Failing repeal of the 16th, I would like to see a flat tax that EVERYBODY pays. As you stated, this debate is long overdue.
Exactly.
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