Pros and Cons of 9-9-9

Rationalist

Hail Voltaire
I'd like to have an honest discussion about Herman Cain's tax reform proposal. Many conservatives have become obsessed with the plan, refusing to acknowledge its flaws. Virtually all liberals are quick to criticize the plan without presenting an idea of their own, except that the rich should pay their "fair share," whatever the hell that means.

Personally, I like the plan. It does, however, need some adjustment.

Here's what I like about 9-9-9:

- It broadens the tax base. As it stands, nearly half of American workers pay no income tax. If we are to increase revenue, we cannot do so simply by soaking the rich; rather, we must increase the number of Americans paying into the system. Besides, the lower and middle classes already contribute 7.65% of their income for SS and Medicare, in addition to the 7.65% paid by their employer -- a 15.3% tax that will be eliminated when the 9-9-9 plan is enacted.

- Many liberals like to say that the US tax code should be modified to more closely resemble Europe's. But in most European countries, the poor and middle classes are taxed at a much higher rate than in the United States. For example, the bottom 50% in Denmark accounts for 42% of tax revenue. In my mind, "fair" means everyone contributes. If you make $1, you pay 9 cents in taxes. If you make $1 million, you pay $90,000 in taxes.

- It is fair and simple. Everyone pays the same rate. However, it is also progressive in that the wealthy will contribute a greater percentage of their income via the sales tax, considering that the wealthy purchase more goods.

- It would close loopholes on individuals and corporations. Everyone would pay 9% of their paycheck. Companies such as GE and GM, which are in bed with the Obama administration, wouldn't be able to avoid paying their fair share.

Here's what I don't like about 9-9-9:

- The sales tax would disproportionately impact the poor and middle class by increasing the cost of food, housing, and other basic necessities. My hope is that Cain will modify his plan to exclude these necessities.

- Capital gains would not be taxed. I'd actually prefer a 9-9-9-9 plan: 9% income, 9% sales, 9% business, and 9% capital gains. While 9-9-9-9 may be not as catchy as 9-9-9, it would ensure that the wealthy are paying the same rate as everyone else, and would make up for providing sales tax exemptions for food, housing, and other essential goods.

- Once we implement a national sales tax, there'd be nothing to stop a future Congress from raising 9-9-9 to 12-12-12 or 20-20-20. It would probably be 9-9-9 for only 9 months, 9 days, and 9 hours. Some provision would have to be made to prevent Congress from doing this.
 
It increases taxes for the poor and middle class and keeps taxes low for the wealthy. Basically another way for the poor and middle class to subsidize the rich. Which doesn't surprise me. Cain's a Federal Reserve boy......He has to make sure the fed gets payed.
 
It increases taxes for the poor and middle class and keeps taxes low for the wealthy. Basically another way for the poor and middle class to subsidize the rich. Which doesn't surprise me. Cain's a Federal Reserve boy......He has to make sure the fed gets payed.

Close, but what it really does is further lower taxes on the wealthy, forcing the poor and middle class to make up the difference.
 
I'd like to have an honest discussion about Herman Cain's tax reform proposal. Many conservatives have become obsessed with the plan, refusing to acknowledge its flaws. Virtually all liberals are quick to criticize the plan without presenting an idea of their own, except that the rich should pay their "fair share," whatever the hell that means.

Personally, I like the plan. It does, however, need some adjustment.

Here's what I like about 9-9-9:

- It broadens the tax base. As it stands, nearly half of American workers pay no income tax. If we are to increase revenue, we cannot do so simply by soaking the rich; rather, we must increase the number of Americans paying into the system. Besides, the lower and middle classes already contribute 7.65% of their income for SS and Medicare, in addition to the 7.65% paid by their employer -- a 15.3% tax that will be eliminated when the 9-9-9 plan is enacted.

- Many liberals like to say that the US tax code should be modified to more closely resemble Europe's. But in most European countries, the poor and middle classes are taxed at a much higher rate than in the United States. For example, the bottom 50% in Denmark accounts for 42% of tax revenue. In my mind, "fair" means everyone contributes. If you make $1, you pay 9 cents in taxes. If you make $1 million, you pay $90,000 in taxes.

- It is fair and simple. Everyone pays the same rate. However, it is also progressive in that the wealthy will contribute a greater percentage of their income via the sales tax, considering that the wealthy purchase more goods.

- It would close loopholes on individuals and corporations. Everyone would pay 9% of their paycheck. Companies such as GE and GM, which are in bed with the Obama administration, wouldn't be able to avoid paying their fair share.

Here's what I don't like about 9-9-9:

- The sales tax would disproportionately impact the poor and middle class by increasing the cost of food, housing, and other basic necessities. My hope is that Cain will modify his plan to exclude these necessities.

- Capital gains would not be taxed. I'd actually prefer a 9-9-9-9 plan: 9% income, 9% sales, 9% business, and 9% capital gains. While 9-9-9-9 may be not as catchy as 9-9-9, it would ensure that the wealthy are paying the same rate as everyone else, and would make up for providing sales tax exemptions for food, housing, and other essential goods.

- Once we implement a national sales tax, there'd be nothing to stop a future Congress from raising 9-9-9 to 12-12-12 or 20-20-20. It would probably be 9-9-9 for only 9 months, 9 days, and 9 hours. Some provision would have to be made to prevent Congress from doing this.

I am not sure it will be a disproportionate impact on the poor or middle class. If federal excise tax on tobacco is reduced to 9% as well as federal gas tax- there is a savings to the poor and middle class right there for two highly consumed products by them- The majority of consumption for large ticket items are done by wealthier American's. The effective tax rate for a single person earning 25k per year is 15%- There is another 6% savings. They will pay none of the corporate tax. Now, if Cain's plan does not give a break on housing and food- I think it will be dead in the water. I have heard that there is a proposed pre-bate for specific incomes.

What would be a boon is the incredible economic landscape that would be offered to business and investment interests around the globe. The increase in entities to tax would be exponential! The elimination of tax loopholes would cause money to flow into instead of out of our country.
 
Two things that commonly are forgotten about here... the payroll tax would go away entirely, that means everyone would be getting 15% more on their paycheck each week. Also, it is not an 'automatic' that every price would increase 9% due to the sales tax. Many competitive products and services would be virtually unchanged, because remember, the corporation is also paying a lower 9% tax rate, and prices could be adjusted to compensate, depending on the market. We already pay the corporate tax as consumers, whether we realize this or not, it's factored into the price. When the corporate tax goes down, that will also be reflected in the price, or in most competitive businesses it would to some degree.
 
Two things that commonly are forgotten about here... the payroll tax would go away entirely, that means everyone would be getting 15% more on their paycheck each week. Also, it is not an 'automatic' that every price would increase 9% due to the sales tax. Many competitive products and services would be virtually unchanged, because remember, the corporation is also paying a lower 9% tax rate, and prices could be adjusted to compensate, depending on the market. We already pay the corporate tax as consumers, whether we realize this or not, it's factored into the price. When the corporate tax goes down, that will also be reflected in the price, or in most competitive businesses it would to some degree.

You make an excellent point Dix. I had not factored in the immense potential for competitive pricing.
 
Two things that commonly are forgotten about here... the payroll tax would go away entirely, that means everyone would be getting 15% more on their paycheck each week.

We'll, technically half of the 15% tax is paid by the employer. It is probable that the employer would keep all or most of this money in the event that the payroll tax is eliminated.

Also, it is not an 'automatic' that every price would increase 9% due to the sales tax. Many competitive products and services would be virtually unchanged, because remember, the corporation is also paying a lower 9% tax rate, and prices could be adjusted to compensate, depending on the market. We already pay the corporate tax as consumers, whether we realize this or not, it's factored into the price. When the corporate tax goes down, that will also be reflected in the price, or in most competitive businesses it would to some degree.

Good points.

Do you agree that capital gains should also be taxed at 9 percent?
 
We'll, technically half of the 15% tax is paid by the employer. It is probable that the employer would keep all or most of this money in the event that the payroll tax is eliminated.

Good points.

Do you agree that capital gains should also be taxed at 9 percent?

Okay... think for a second here... if the portion of payroll tax is paid by the employer currently, isn't that money factored into the cost of employing the employee? In other words, if they didn't have to pay that money in payroll taxes, couldn't they use it to pay the employee a higher wage? Whether you realize it or not, your employer's portion of payroll tax is figured into your pay, or the cost of employing you.

Under the 9-9-9 plan, Capital Gains tax goes away. I don't agree that it should "also" be taxed, because it already HAS been taxed.
 
Close, but what it really does is further lower taxes on the wealthy, forcing the poor and middle class to make up the difference.

That's not too far from what I said. Funny how the media can put this guy in the lead, when he should be dead last. This proposal alone(Tax, Tax, Tax) is what the majority of Republicans hate. TAXES!
 
Okay... think for a second here... if the portion of payroll tax is paid by the employer currently, isn't that money factored into the cost of employing the employee? In other words, if they didn't have to pay that money in payroll taxes, couldn't they use it to pay the employee a higher wage? Whether you realize it or not, your employer's portion of payroll tax is figured into your pay, or the cost of employing you.

You think employers would give their employees a 7.65% raise? Seems doubtful to me. If I were a business owner, I'd probably only give them a small raise, and keep the remainder for myself.

Under the 9-9-9 plan, Capital Gains tax goes away. I don't agree that it should "also" be taxed, because it already HAS been taxed.

Explain.
 
You think employers would give their employees a 7.65% raise? Seems doubtful to me. If I were a business owner, I'd probably only give them a small raise, and keep the remainder for myself.

Explain.

Well, okay, even by your own reasoned example, you are getting an increase in pay you wouldn't otherwise be getting, plus you don't have to pay your payroll tax anymore, so your net take home is considerably more, not considerably less, as liberals would have you believe. The bottom line is, everyone will have more of their own money at the end of the day. If you decide to spend it, sure... some of it is going to pay sales tax of 9%, but guess what happens in competitive capitalist marketplaces? Best Buys knows they can sell more digital cameras than Walmart, if they sell them for 9% less, making the price after the new tax the same as the old price! A lot of the federal tax will be absorbed by the company, who can afford to do this, as they are also paying a lower tax rate. You may say, well what assurance do we have this will happen, and the assurance is capitalism. The market determines price on anything, ultimately... supply and demand. If one company can undercut another and still make profit, they will... and this would happen in the market with a 9% sales tax, the same as it happens without one.
 
You think employers would give their employees a 7.65% raise? Seems doubtful to me. If I were a business owner, I'd probably only give them a small raise, and keep the remainder for myself.



Explain.

Its all smoke and mirrors, when all is said and done, what they are doing is they are trying to get blood out of a stone. They are going to increase taxes on every consumer and people that are living pay check to paycheck are now going to have to tighten their belts even more. They are going to tax the poorest of the poor to compensate for the low tax cuts to the rich. How this plan is being given that much attention is beyond me. I guess you can thank all the pork economists spinning numbers and the media.

http://www.washingtonpost.com/blogs...-the-999-plan/2011/10/12/gIQAHszPgL_blog.html

Right now, nearly half of taxpayers don’t pay income taxes, but they do pay their share of payroll taxes, which amounts to 7.65 percent of wage income (though much of it is capped at $107,000). Cain would also eliminate the earned-income tax credit, which is intended to lift working Americans out of poverty. Many of these workers currently receive tax refunds.

On top of that, Cain would introduce the new sales tax, which would affect lower and moderate-income people who spend most of their income on purchases, not savings and investments. Depending on how you do the math, people now paying zero or negative taxes might be faced with a 27 percent tax on income.

In other words, while on paper Cain is promising a tax cut, in reality tens of millions of lower-income Americans would face tax increases. People in high tax brackets — 28 percent and higher — would likely see big tax cuts. (As part of his plan, Cain would also eliminate estate taxes and capital gains taxes, which, again, mostly affect higher-income people with stock and real estate investments.)

There have been several interesting analyses done on the “9-9-9” plan. Edward D. Kleinbard of the University of Southern California School of Law identifies several unusual quirks, including a “disguised one-time 9 percent tax on existing wealth — no doubt much to the surprise of Mr. Cain and his followers.” Kleinbard, former chief of staff of the nonpartisan Joint Committee on Taxation, says that “contrary to casual impressions, the Plan could be expected to raise substantial amounts of revenue, but does so largely by skewing downwards the distribution of tax burdens when compared to current law.”

Further news? Yup he is helping his wall street buddies increase profits.......

http://news.yahoo.com/blogs/lookout...5hbHN8dGhlY3V0bGluZQRwdANzdG9yeXBhZ2U-;_ylv=3
 
Dixie did you have 1 economics class in college? The business would keep its half of the tax. Employers only pay what the market requires.
 
Dixie did you have 1 economics class in college? The business would keep its half of the tax. Employers only pay what the market requires.

Dixie thinks they will add it to to the minimum wage salary out of the goodness of their hearts.
 
In other words, while on paper Cain is promising a tax cut, in reality tens of millions of lower-income Americans would face tax increases.

Oh no! Yikes! Sound the alarms! People might have to pay taxes! OMG! What will we do? They will probably starve and die in the streets over the shock of having to pay tax! OH NO! *wring hands* Oh my! We we we... just can't have this, it's CRAZY talk!

Dixie did you have 1 economics class in college?

What you need to be asking, genius, is... What kind of REALITY classes did these idiots take, that says we can be $14 trillion in the red, and going $1 trillion per year MORE in the red, and no one is ever going to have to pay more taxes?

If a waffle costs $1, and you don't realize the seller is selling you a .90 waffle and paying .10 tax on it.... ARE YOU PAYING MORE TAX IF... the same waffle cost you .90 plus a .10 tax? NO! The same waffle still costs $1... the perception of 'tax paid' changes! You're not paying MORE tax on the waffle, you are paying THE SAME tax, it's just more transparent.

Dixie thinks they will add it to to the minimum wage salary out of the goodness of their hearts.

But that's not what Dixie said. "Goodness of heart" has absolutely NOTHING to do with business and economics. Competition, along with supply and demand, those are what determine consumer prices, as well as wages. When a company hires you to work for them, a part of what they figure in to how much they pay you, is how much does it cost them to employ you? IF it costs them $2 less an hour, because they don't have to pay the payroll tax... they can afford to pay you $2 more... no guarantee they will... maybe they won't... but maybe they will? They certainly CAN'T do that, if they don't save the $2, can they?
 
It's so interesting to hear Dixie argue in favor of tax hikes for the majority of Americans...

Current Debt: $14,000,000,000,000.00
Growing at a rate of $1,000,000,000,000.00 per year PLUS interest.

Regardless of "in favor" or "against" please tell us how we are not going to be paying MORE TAX in the future?

EXPLAIN MORON!
 
Current Debt: $14,000,000,000,000.00
Growing at a rate of $1,000,000,000,000.00 per year PLUS interest.

Regardless of "in favor" or "against" please tell us how we are not going to be paying MORE TAX in the future?

EXPLAIN MORON!

Taxed enough already, baby....taxed enough!!!
 
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