I actually am in favor of some sort of a tax plan like this by Cain: http://bottomline.msnbc.msn.com/_news/2011/10/13/8304334-cains-9-9-9-tax-plan-is-simple-most-will-simply-pay-more I think his distribution would never fly but a variance of it such as below just might: Income levels: income tax-consumer tax-business tax 0-20,000 0-9-9 20-50,000 2-9-9 50,000-80,000 6-9-9 80,000-120,000 8-9-9 120,000-200,000 9-9-9 200,000- 450,000 11-9-9 450,000-700,000 13-9-9 over 700,000 15-9-9 It's asking a lot of poor people making less than 50k as a family to suddenly pony up thousands in taxes they were not previously paying. But I like the essence of the plan.
I can't believe this....GULP......I actually agree with Dave.......somewhat. :wink: IMO the concept of 9-9-9 is valid, but the flat 9-9-9 formula would annihilate the "middle class" which I define as those earning around $50,000 to around $100,000. The combination of the 9% income tax and 9% sales tax would result in about a 40-50% increase in the total tax burden on that group and around a 20-30% increase on the group earning between $100,000 and around $175,000. That seems like too big a hit on that group to make it a viable, sellable plan, even to Republican voters in those income groups, of which there are many. It will be interesting to see how this plan is analyzed and commented on by the other Republican candidates and by the media.
:idea: I like Herman Cain a lot and I think the 9-9-9 is a good starting point for discussion. Once we all agree that the current tax system can't continue, it gets a little easier to accept that a flatter tax on a broader base, with no loopholes or deductions, is probably the best way to go.
Not entirely true, Sid, if my understanding is correct. Don't forget the elimination of the 15.3% payroll tax. That actually brings a tax decrease to those folks, according to Cain (but he conveniently forgets that they only pay half so actually only 7.6% of their current taxes are eliminated...it still amounts to a total 15.3% payroll tax cut to employers and employees combined, though. The plan is supposed to give relief to those below the poverty line, though he doesn't say how. My biggest problems are that it adds a new tax (federal sales tax) to the system and this is an area traditionally left up to the state and local governments. If you add 5% (or more) for the current sales tax, now you've got 14% sales tax. True, this is offset by other tax decreases, but that's gotta be a jolt to personal spending. Plus he doesn't say (I don't think) if everything will be taxed (groceries, etc.) or stay with the current exemptions. I suspect they will be gone. But my biggest problem is what happens next? 10-10-10-? 15-15-15?
Stu, Aha! You are correct, sir. I was so focused on the 9-9-9 that I forgot about the payroll tax, which certainly would negate somewhat, but not entirely, the impact of the double hit (income and sales taxes). Like you, I also am concerned about lumping an onerous sales tax on top of Indiana's 7% state and my local 1% sales tax. Also, you make an excellent point: Where does it stop on the inevitable upswing?
I think food should be exempt but I don't see any clarification from Cain on that. The sales tax is fairest of all.... the "rich" will pay more because they consume more. Stu's argument of the tax levels growing over time is the one Cain's GOP rivals are using. So what is the problem? The plan or the spendthrift idiots in Congress who cannot control themselves? Of course, it's the latter. It seems to me that an overhaul of the tax system must include a system of checks and balances to preclude these rates, whatever they end up being, from rising haphazardly.
This is directly from Cain for President web site..... <t>Phase 1 - 9-9-9<br/> <br/> Current circumstances call for bolder action. <br/> <br/> The Phase 1 Enhanced Plan incorporates the features of Phase One and gets us a step closer to Phase two.<br/> I call on the Super Committee to pass the Phase 1 Enhanced Plan along with their spending cut package.<br/> The Phase 1 Enhanced Plan unites Flat Tax supporters with Fair tax supporters.<br/> Achieves the broadest possible tax base along with the lowest possible rate of 9%.<br/> It ends the Payroll Tax completely – a permanent holiday!<br/> Zero capital gains tax<br/> Ends the Death Tax.<br/> Eliminates double taxation of dividends<br/> Business Flat Tax – 9%<br/> Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.<br/> Empowerment Zones will offer additional deductions for payroll employed in the zone.<br/> Individual Flat Tax – 9%.<br/> Gross income less charitable deductions.<br/> Empowerment Zones will offer additional deductions for those living and/or working in the zone.<br/> National Sales Tax – 9%.<br/> This gets the Fair Tax off the sidelines and into the game.<br/> <br/> Phase 2 – The Fair Tax<br/> <br/> Amidst a backdrop of the economic boom created by the Phase 1 Enhanced Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.<br/> The Fair Tax would ultimately replace individual and corporate income taxes.<br/> It would make it possible to end the IRS as we know it.<br/> The Fair Tax makes our exported goods and services the most competitively internationally than any other tax system.<br/> Phase 1 Enhanced Plan – Summary<br/> <br/> Unites all tax payers so we all pay income taxes and no one pays payroll taxes<br/> Provides the least incentive to evade taxes and the fewest opportunities to do so<br/> Lifts a $430 billion dead-weight burden on the economy due to compliance, enforcement, collection, etc.<br/> Is fair, neutral, transparent, and efficient<br/> Ends nearly all deductions and special interest favors<br/> Ends all payroll taxes<br/> Ends the Death Tax<br/> Features zero tax on capital gains and repatriated profits<br/> Lowest marginal rates on production<br/> Allows immediate expensing of business investments<br/> Eliminates double taxation of dividends<br/> Increases capital formation. Capital per worker drives productivity and wage growth<br/> Capital formation will aid capital availability for small businesses<br/> Features a platform to launch properly structured Empowerment Zones to revitalize our inner cities<br/> We all know the Fed has tripled the money supply since 2008. They have been printing money out of thin air to finance the Obama spending machine. While true Fed reform that restores sound money may have to wait for my election, the best thing we can do now is to pursue policies that increase the DEMAND for dollars to help mitigate the risks associated with the increase in the supply.<br/> Pro-growth economic policies equal a strong dollar policy</t>
Agreed on both counts. Also.....no more taxes on energy use as well as healthcare items. Essential items needed by low income families should not be taxed further.
No tax on energy use??? Not gonna happen (ever). What a disincentive for conservation that would be. I don't think health care is taxed now.
I meant energy and healthcare products should not be taxed any more than at current levels from the consumer standpoint.
This is the first I've read of this, and on the surface of it I like portions of it. The biggest benefit to me is, if I choose not to spend my money, I don't get taxed on it as much. What really concerns my right out the gate is the addition of a new tax to the system; rates NEVER go down.
That is why it should not apply to foodstuffs, energy or healthcare......essentials for everyday living that the guy making 300K and the guy making 30K each must buy every day. Easily affordable to the 300K guy and a wallet killer for the 30K guy. .
I disagree with that. I would rather have a tiered system where a basic provision of staples are either not taxed or are taxed at a lower rate. But as was said before, conservation should most definitely be encouraged, and if you choose to be wasteful, or inefficient (fast food instead of cooking at home, driving to the corner store instead of walking, leaving lights on throughout the house instead of in your reading spot, buying caviar instead of spam, etc) then everyone should partake in that aspect of the tax.
OK....tax caviar then but not white bread and whole milk. Two years ago I did not live in my house in Michigan ( I was in Florida working....my family was with me.....and we were trying to sell the house in Mi. ) and since it was unoccupied I kept the thermostat at 60 with the coordinated effort of my brother-n-law who lives in Detroit. Even so I was paying energy bills around $400.00 per month during that winter.......which was outrageous since no one lived there. Turning the lights out obviously meant squat. I can imagine bills this winter from Detroit Edison topping $600.00 if we still lived there and if we added a use tax of 9% on top of such exorbitant unaffordable energy costs it would be not only be untenable for me but certainly for families in Detroit with lower incomes. It's many times not about choices and things you have control over but the GOP has sold that line to their base and they have bought it hook, line and sinker.
So are you saying that Detroit Edison makes too much profit and that they could cut your electricity charges maybe in half and still make a profit? I'm not clear on what you think Detroit Edison shoudl be doing?
I am saying residential energy use should be excluded from any 9-9-9 type tax plan. OH....that and I personally should be given a break on any everyday expense regardless of who does or does not make a profit because I am who I am and.....doggone it.....I deserve it. 8)
What was outrageous? The fact that you have to pay DTE for the services they provided you? I don't understand.....
$400.00 per month for energy service to an unoccupied house where the thermostat is kept at 60 and the doors are opened only on occasion seems a bit high to me and pretty much unavoidable unless you are OK with zero degree temperatures freezing the pipes in a house you are desperately trying to sell. But hey....I guess it was my choice not to let those pipes freeeze right? :roll: But then I am only middle class you know. The point again.....that I was making is that middle class families in Detroit and places like it already pay significant costs for their energy services and they don't need the added burden of a 9% additional tax for that service in a new tax plan.....as viable and attractive as that new tax plan may be.
I assume that it was also not DTE's decision to leave the house unoccupied? Blame your government ....DTE cannot even set it's own prices.....As in many many states, The Michigan Public Service Commission (MPSC), the state agency that regulates utilities, determines the rates that DTE can charge. MPSC establishes the rates to "allow" DTE to generate an eye popping 11% return on investment.....no doubt more corporate greed gone wild! :roll: