Cain campaign: 9-9-9 would be revenue neutral

[^_^ 5,021]

If everybody pays less, how can the federal government end up collecting the same amount?

Appearing on ABC’s “Good Morning America” earlier today, [Cain] deflected criticism that the 9-9-9 plan would hurt poor people the most while slashing taxes for the wealthy.

“You have to take the three together,” he said. “Together, you broaden the tax base and together you lower the net-net taxes for everybody.” He said he wouldn’t revise the plan because of criticism from independent analysts, who he said used different assumptions about the economy than he does.

Today one of his advisers, Rich Lowrie, provided Bloomberg News with an analysis showing the 9-9-9 plan would have generated about $2.3 trillion in revenue in 2008, on par with the amount the federal government collected that year.

http://www.businessweek.com/news/2011-10-12/cain-s-9-9-9-tax-plan-in-debate-spotlight-as-perry-recedes.html

Edited October 12, 2011 by \

[웃 910]

If everybody pays less, how can the federal government end up collecting the same amount?

Because it won't. You'd see $2.3 and $2.5 trillion deficits instead of $1.3 and $1.5 trillion.

*make believe numbers

Edited October 12, 2011 by Lord Infamous

[scandal 951]

If everybody pays less, how can the federal government end up collecting the same amount?

There is a school of thought that lowering tax rates stimulates business activity and creates a larger economic pie from which government takes its slice. That could in principle mean revenue neutral, or possibly even larger tax revenues, all depending upon how much growth is created by the lower tax rates.

I think that's the basis of Cain's plan, and it's fairly conventional supply-side economics.

I don't subscribe to it but I do understand the core logical argument.

[Mr. Big Dog 10,747]

If someone doesn't pay a dime in federal taxes today because the person makes miniscule wages and the payroll taxes paid are effectively offset by tax credits (EITC or somesuch), then that person would arguably pay more under the Cain "plan" when said person loses the tax credits, ponies up 9% income tax on those miniscule wages and then gets to pay 9% federal sales tax to boot. That's an 18% hit with federal taxes vs. 0% paid today. This holds true even for folks that pay payroll but no income taxes. They'd pay more as well. To claim that this plan would lower the net-net taxes for everybody is simply a lie. Fact is, this plan would raise taxes for most - i.e. more than 50% of the taxpayers from the bottom up - keep them about steady for some and lower them for the few.

"Job creators" need more tax breaks. We've done this for over a decade now and we've got more jobs than we would ever need as a result, don't we?

[웃 910]

There is a school of thought that lowering tax rates stimulates business activity and creates a larger economic pie from which government takes its slice. That could in principle mean revenue neutral, or possibly even larger tax revenues, all depending upon how much growth is created by the lower tax rates.

I think that's the basis of Cain's plan, and it's fairly conventional supply-side economics.

I don't subscribe to it but I do understand the core logical argument.

Ya, the core logical argument is this:

Wal-mart saves $30 million dollars in taxes due to a lower rate...So the guys at the top are gonna just be ecstatic - they'll be jumping up and down...We have $30 million more dollars!!! I mean the guys are screaming at the top of their lungs in pure joy....And the argument continues as this: they are so happy because what it means is they are gonna run out and hire hire hire!!!

They will hire - more personal butlers and personal assistants - FOR THEM!

The reverse is with higher taxes they pass those fees onto the consumer. So they say. I was in my early teens when Clinton raised taxes slightly - did this happen? Maybe it did.

I think there is some truth to the lower taxes = more hiring; more money in workers pockets = more spending....But I think it works from maybe 53% down to 49%....

Is it really a coincidence that Bush's historic tax cuts coincide with a lost decade in job growth, the Great Recession, the worst economy in a century? There's got to be a small correlation?

[Mr. Big Dog 10,747]

The theory is that if you give a bigger cookie to the rich guy, there will be more crumbs for the masses. Sorry, but I don't care to feed on crumbs.

[The_Dude 1,142]

[Mr. Big Dog 10,747]

[^_^ 5,021]

Herman Cain is running on three numbers: 9-9-9.

“Nine percent corporate business flat tax, nine percent income flat tax and a nine percent national sales tax,” he said, explaining the plan once again during Tuesday night’s Republican presidential debate.

...

Social Security taxes would be eliminated, as well as estate taxes and capital gains taxes. Deductions and corporate loopholes would be gone too.

The old system would be replaced by the nines:

- A flat 9 percent income tax for everyone – no more, no less

- A 9 percent tax on corporations

- A 9 percent national sales tax

...

Economists say Cain’s plan would be a tax hike for the lower middle class and a tax windfall for the wealthy.

If you have a family of four with an income of just under $50,000, they would pay more under the Cain plan. Currently, they are taxed at just less than 7 percent and pay $3,400 in income tax. Under Cain’s plan, they would be taxed at 9 percent or pay $4,500.

That’s $1,100 more.

Although the family would save almost $4,000 in Social Security taxes, it would have to give up the child tax credit of $4,000. Furthermore, it would pay an additional national sales tax of 9 percent on everything purchased, including groceries and clothes, which totals about $2,000.

That means under the Cain plan that family would be almost doubling its taxes, going from $3,400 to $6,500.

“It’s going to raise the price of just about everything by about 9 percent,” said former George W. Bush economic policy adviser Bruce Bartlett. “We know from experience and analysis that that tends to hurt people with low incomes.”

http://abcnews.go.com/blogs/politics/2011/10/9-9-9-plan-would-almost-double-taxes-on-middle-class/

[Dan and Judy 614]

Tinkle down economics.

The rich pee on the rest of us

[웃 910]

No sh!t

[dalegg 143]

So, maybe we want to be patriotic and pay our fair share!

[웃 910]

I have a theory.

On the right you have a mostly uninformed group (I'd also say the same about the left - most Americans - and not exactly excluding myself)...

Anyways, obviously the right caters to the rich. I don't think they hide that.

Here's the theory:

The teachers are Hannity, Beck, Limbaugh, Savage, Marc Levin, etc.

They are all multi millionaires. And they reach the masses on a daily basis. You're not gonna ever hear that Cain's plan hurts the middle and lower class on their shows (or how it greatly benefits guys like Hannity/Limbaugh). You'll only hear the good things about his 9-9-9 plan.

I mean when you read something like a family scraping by with $50,000 will go from paying $3400 to $6500. That is a huge difference. It's your typical Fox News viewer that supports Cain - clueless about reality.

Edited October 13, 2011 by Lord Infamous

[Gary and Alla 3,694]

we will see. Perhaps he will modofy it to the FAIR TAX. That would be better.

the best news of this is that Cian and only Cain is willing to address the root of most of our problems

[^_^ 5,021]

I have a theory.

On the right you have a mostly uninformed group (I'd also say the same about the left - most Americans - and not exactly excluding myself)...

Anyways, obviously the right caters to the rich. I don't think they hide that.

Here's the theory:

The teachers are Hannity, Beck, Limbaugh, Savage, Marc Levin, etc.

They are all multi millionaires. And they reach the masses on a daily basis. You're not gonna ever hear that Cain's plan hurts the middle and lower class on their shows (or how it greatly benefits guys like Hannity/Limbaugh). You'll only hear the good things about his 9-9-9 plan.

I mean when you read something like a family scraping by with $50,000 will go from paying $3400 to $6500. That is a huge difference. It's your typical Fox News viewer that supports Cain - clueless about reality.

What's your theory?