Value Added Tax (VAT) is on product taxed at very point of production and is hidden in every product purchased. Cain’s corporate tax reduces the current 35% corporate tax to 9% which will be the lowest among industrialized nations worldwide. None of Cain’s 999 plan has double and triple taxation such as in the current system.
None of Cain’s 999 plan has double and triple taxation such as in the current system.
But I think his plan actually taxes wages twice. Once in the corporate income tax on revenue that passes through to wages, and again on the employee receiving the wages.
A corporation with $100,000 revue, all going to wages (not making any money) has a tax bill of $9000, giving it a loss of $9000. The employees contribute pay another $9000 income tax.
Basically, as I read it (and hope I’m wrong, and support the plan even if I’m not) 999 includes a 9% corporate profits tax, plus a 9% payroll tax, plus a 9% income tax, plus the 9% sales tax. Essentially, the employer’s portion of the payroll tax is increased from ~7.6% to 9%.