Posted on 10/17/2011 2:40:44 PM PDT by sklar
Suppose a pensioner makes $15,000 a year.
Under the current IRS system, they get a personal deduction of $6000 (which would go away under 9-9-9). Their taxable income is $9000. At the 10% rate, they pay $900 to IRS.
Under 9-9-9, they would pay 9% personal tax = $1350, an increase of $450, PLUS a brand new 9% Federal Sales Tax on everything new that they purchase including food household goods, etc.
Unless my calculations are flawed, 9-9-9 would be disastrous for Pensioners on a fixed income.
bttt
999 sounds great at first but flaws emerge under a closer look.
yes in fact you are wrong. The estimated federal tax already imposed on all purchases is about 22%. Also there are exceptions for poverty level working poor. Also the sales portions is only applied to new purchases. There is a lot more to it then the simple 999. I suggest you o to his site and pull down the pdf.
A pensioner making only $15,000 is screwed no matter what tax plan is used.
My advice? Go back to work.
Something seems wrong with your example...
Only half their social security is subject to tax at this time so in your example the pensioner would not pay any tax.
Telling millions of pensioners that they will now be taxed is a sure winner.
Price of goods would decrease under 999 since it does away with the various embedded taxes: http://999calculator.net/
Sure ... 90 years old oxy tank bed ridden /wheel chair. Yeah get a job you old slacker.
A pensioner making only $15,000 is screwed no matter what tax plan is used.
My advice? Go back to work.
Since skylar prigionaly used his parents as an example I would suggest he/she help them out, that what we did and Mom and Dad did fine.
You could also throw in that when they spend out of savings they get whacked for 9% sales tax.
I didn’t say Social Security, I said Pension. Pension payments are treated as wages.
The example ignores the removal of the many taxes embedded in the cost of every good and service.
But, in any event, 999 won’t be enacted because it would cause people who pay nothing or very little to pay “their fair share”. Those people prefer the current monstrosity of a tax code because it exploits others for their benefit.
This is a common flaw when people analyze the effect of 9-9-9.
Under the current system, taxes, which are a cost of production, are embedded in the price of a product. Under 9-9-9 part of that cost is moved to the point of sale. The net price out the door will not change. The list price of the product will fall 9% because of less embedded tax cost.
The increased tax on the pension is an issue. Although I agree with the plan overall, there is no logic in taxing Social Security retirement benefits and certain levels of pensions. Not a difficult issue to resolve in implementing the system.
A pensioner making only $15,000 is screwed no matter what tax plan is used.
My advice? Go back to work.
And eat used food.
If you mean someone who is "Retired" (like I am) and drawing SS, then I don't know what you are talking about as my benefits are NOT taxed.
And who do you REALLY support?
6000 dollar deduction??? I wish I had that!!! Do I need to tell my tax guy about this????
Take a look at this thread to gain a better understanding of the plan:
http://www.freerepublic.com/focus/f-news/2793957/posts
The only problem with your analysis is that it’s incorrect.
WASUPWITHDAT???
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