9-9-9: The Devil is in the Details
October 17, 2011 1 Comment
By Steven Thomma
McClatchy Newspapers
October 12, 2011
WASHINGTON — Republican presidential candidate Herman Cain’s proposed 9-9-9 tax plan would shift the tax burden in the United States, raising taxes on the poor while cutting taxes for the wealthy.
Former CEO of Godfather Pizza, Herman Cain
Cain proposes to scrap the current tax code and replace it with a flat 9 percent tax on personal income, a second 9 percent tax on corporate income, and a third 9 percent tax on sales. It also would eliminate the payroll tax paid for Medicare and Social Security, the estate tax, and capital gains taxes.
While the Cain campaign has not produced enough details for thorough independent analysis, a flat 9 percent income tax and a 9 percent national sales tax would almost certainly mean higher taxes for at least the 30 million U.S. households that now pay no federal taxes.
And it almost certainly would mean big tax cuts for the wealthy, who now pay a 35 percent marginal rate on their income above $379,150.
The catchy 9-9-9 tax plan has helped the former Godfathers pizza CEO surge into the top tier contending for the 2012 Republican presidential nomination. With his rising support, Cain’s plan is drawing more scrutiny, with the potential shift of the tax burden just one of the profound effects the dramatic change in tax policy could have — if Cain were elected and managed somehow to get it past an army of lobbyists and through Congress to enactment.
Ultimately, in a second phase, Cain’s plan would eliminate all income taxes for individuals and for corporations in favor of a national sales tax. To raise sufficient money to fund the government, the sales tax rate would rise significantly, perhaps to 23 percent, analysts estimate, though Cain hasn’t specified a level yet.
The changes in income taxes would turn away from the progressive tax policy that’s shaped U.S. policy for a century, based on the principle that the wealthier people are, the more they can afford to pay in taxes to the society that’s enriched them.
“The plan could be expected to raise substantial amounts of revenue, but does so largely by skewing downwards the distribution of tax burdens,” said a new analysis of the Cain plan this week by Edward D. Kleinbard, a professor of tax law at the University of Southern California. He’s also a former chief of staff at the congressional Joint Committee on Taxation, which analyses all tax legislation for Congress. “The 9-9-9 Plan would materially raise the tax burden on many low- and middle-income taxpayers.”
Others agree.
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“O” being the first, do we really need another? Considering the self serving attitude this one has, then the destruction of the 99% that gets left in the dust would be complete. Of course, then who would be the slaves? Points to ponder, though it should be obvious to all just who it is financing this ones run. Another one who believes he has what it takes, who drinks his own brand of kool-aid.