Cain's Tax Plan Would Help the Rich, Hurt the Poor

The non-partisan Tax Policy Center has analyzed Herman Cain's 9-9-9 tax proposal. Business Week reports on the findings:

Republican presidential candidate Herman Cain’s 9-9-9 plan would lead to higher tax bills for lower- and middle-income Americans while most high earners would pay less tax than they do now, according to a new analysis.

The 9-9-9 plan would translate into a tax cut for almost 95 percent of Americans with cash income exceeding $1 million, according to the analysis released today by the nonpartisan Tax Policy Center in Washington.

The Associated Press has more. If you want to crunch the numbers yourself, here is the Tax Policy Center's analysis and charts.

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    Help the rich, (5.00 / 1) (#1)
    by Zorba on Tue Oct 18, 2011 at 06:33:22 PM EST
    hurt the poor.  Imagine my surprise.  Not.  The rich are making the rules, and have been for a long, long time.  In fact, it's the "golden rule."  Those who have the gold, make the rules.

    As we say in German (5.00 / 3) (#2)
    by Peter G on Tue Oct 18, 2011 at 08:25:51 PM EST
    Nein, nein, nein.

    Cain's tax plan increase taxes (5.00 / 0) (#4)
    by MO Blue on Wed Oct 19, 2011 at 08:38:25 AM EST
    for 84% of U.S. households. Source

    How bad is it?

    The Tax Policy Center, a Washington think tank, says low- and middle-income families would be hit hardest, with households making between $10,000 and $20,000 seeing their taxes increase by nearly 950 percent.

    "You're talking a $2,700 tax increase for people with incomes between $10,000 and $20,000," said Roberton Williams, a senior fellow at the Tax Policy Center. "That's huge."

    How about the millionaires/billionaires?

    Households with the highest incomes, however, would get big tax cuts. Those making more than $1 million a year would see their taxes cut nearly in half, on average, according to the analysis.

    Surely those in the middle would benefit. Well, no.

    Among those in the middle, households making between $40,000 and $50,000 would see their taxes increase by an average of $4,400, the report said. Those making between $50,000 and $75,000 would see their annual tax bill go up by an average of $4,326.

    i certainly didn't need (none / 0) (#3)
    by cpinva on Wed Oct 19, 2011 at 12:09:03 AM EST
    anyone to figure this out. anyone who deals with taxes (my job, for 35 years now) knew that in an instant. sales taxes are, by definition, regressive.

    The article says that (none / 0) (#5)
    by republicratitarian on Wed Oct 19, 2011 at 08:45:35 AM EST
    this analysis presumes the 2001 and 2003 tax cuts would be permanently extended
    I wonder how that affects these numbers?

    Nevermind, read the other article (none / 0) (#6)
    by republicratitarian on Wed Oct 19, 2011 at 09:18:29 AM EST
    The center did a separate analysis that assumed all the Bush-era tax cuts would expire at the end of 2012. Under that scenario, Cain's plan would still impose higher taxes on 77 percent of U.S. households, the report said.

    Cain Hs Said Like 10 Times (none / 0) (#7)
    by ScottW714 on Wed Oct 19, 2011 at 09:28:49 AM EST
    That he was joking, that his point was to get some sort of plan instead of just discussing what is wrong.

    IMO Cain is an idiot, but there's no point in discussing a plan he's said numerous times wasn't a serious one.

    But for the sake of argument, the 999 was all federal, that means local income and sales tax rates would remain.  So here in Texas, that would mean 17.25% sales tax rate and 9% income tax, which we have never had.

    And with his no deductions/exemptions policy, that would mean a good resold say three times (manufacturer/wholesaler/retailer) it would have around 60% of taxes built into the costs here in Texas.

    That is why he backed off and said it wasn't serious, that it was a joke, who knows if it was, but it's no longer something he is pursuing.

    No (none / 0) (#8)
    by jimakaPPJ on Wed Oct 19, 2011 at 06:44:48 PM EST
    So here in Texas, that would mean 17.25% sales tax rate and 9% income tax, which we have never had.

    Your state taxes are not changed.

    Your present FIT, FICA and Medicare taxes are eliminated.

    Your new FIT under 999 is 9% of your gross income less charitable deductions PLUS a 9% Federal sales tax.

    I gave an example in another thread of a $100K family.


    We (none / 0) (#9)
    by Ga6thDem on Thu Oct 20, 2011 at 05:46:36 AM EST
    don't have a federal sales tax right now so it would raise his sales taxes in TX by that much and it would also include things not currently taxed like doctor's visits etc.

    Do your on math (none / 0) (#10)
    by jimakaPPJ on Thu Oct 20, 2011 at 09:59:08 AM EST
    Your state taxes are not changed.

    Your present FIT, FICA and Medicare taxes are eliminated.

    Those are savings.

    The 9% on his gross income and the 9% Federal Sales Tax on his purchases are the new taxes.

    999 does not change state taxes.


    It will cost (none / 0) (#11)
    by Ga6thDem on Thu Oct 20, 2011 at 11:05:08 AM EST
    me more. It will cost most people more. The reason it's a wash for Kdog is because he's single and rents. Those are the people who are going to do better with this type of plan but the rest of us are going to be up the creek with no paddle.

    36% is a lot to pay and it includes things that are not now currently taxed.


    Actually single (none / 0) (#12)
    by jimakaPPJ on Thu Oct 20, 2011 at 02:29:56 PM EST
    people make out the best of all.

    Where do you get 36????


    You need to (none / 0) (#14)
    by Ga6thDem on Thu Oct 20, 2011 at 02:50:37 PM EST
    read up on the Fair Tax. All this stuff Cain is shopping is something that's been going around here in GA for literally years.

    It's going to take a 36% sales tax to fund current operations and pay down the debt. And everything is going to be taxed.


    Sigh...... (none / 0) (#16)
    by jimakaPPJ on Thu Oct 20, 2011 at 10:46:14 PM EST
    Quit changing the subject. Cain has proposed 999 not the "fair tax" whatever that is.

    He himself (none / 0) (#17)
    by Ga6thDem on Fri Oct 21, 2011 at 06:37:50 AM EST
    has said that 999 is the first step in moving toward the Fair Tax. It is nothing more than a transition. This is all really easy to understand.

    Wrong - try again (none / 0) (#19)
    by Yman on Fri Oct 21, 2011 at 08:40:03 AM EST
    Cain is proposing the 9-9-9 plan as an interim step to what he describes as "Phase 2" - the "Fair Tax".  It's right on the 9-9-9 page of his own website.

    The "Fair Tax" boils down to a 30% national sales tax, which is, of course, an extremely regressive tax.


    Please pay attention (none / 0) (#20)
    by jimakaPPJ on Fri Oct 21, 2011 at 09:12:25 AM EST
    If Cain is elected he will have to first get 999 passed and then change it to something else.

    Do you really think that will happen??

    In the mean time the Repubs and the Demos are all in a dither thinking they could no longer control us with promises to certain groups to take more or less of their money.

    Now, is a sales tax "regressive?"

    In what dream is that true? Is it "fair?"

    Well, since it applies to everyone, yes. Yes it is.

    Does it violate your view that we are not yet good little socialists?  Yes. Yes it does.

    When 47% pay no taxes they have no skin in the game. You want responsive government? Make sure everyone pays their share.


    I AM "paying attention", Jim (none / 0) (#23)
    by Yman on Fri Oct 21, 2011 at 09:35:30 AM EST
    Cain has proposed 999 not the "fair tax" whatever that is.

    Apparently, however, you are not.  My point was that Cain has said from day one that the 9-9-9 plan was an interim step toward the "Fair" Tax.  You're acting as though Ga6thdem is just making it up, and you don't even know what the "Fair" tax is.  The fact that you support Cain and don't even know these basic facts just illustrates how people can be gamed by silly slogans rather than bothering to gain an understanding detailed proposals, as they should.

    BTW - Sales taxes are regressive.  Yes, everyone pays them, but the wealthy don't spend all their money on goods and services like the poor/working class.  Consequently, their effective rate is lower than those living paycheck to paycheck.  Hence the reason that the 9-9-9 plan increases taxes on the poor (making $10,000-20,000) by 950%.

    Funny, how your concern for the poor and working class suddenly flies out the window when it comes to paying their "fair share".


    And Obama promised to reform (none / 0) (#26)
    by jimakaPPJ on Fri Oct 21, 2011 at 05:44:10 PM EST
    health care...And we got Obamacare.

    Do you actually think, if Cain was elected, he could get 999 through??

    No. Sales taxes are FAIR. (Excuse the yelling, but I want you to hear.)Because everyone pays the same.

    Taxes based on the amount of the money, aka Income Taxes, are a way to attempt to have those with more money pay more. Not fair at all unless you believe "from each according to his ability to each according to his need."


    No - I don't think ... (none / 0) (#28)
    by Yman on Fri Oct 21, 2011 at 07:34:02 PM EST
    ... he could get it passed, but as you've so amptly demonstrated, there are a lot of uninformed/misinformed voters out there when it comes to Cain's plan, so who knows ...  That being said, why are you such a staunch advocate for the plan when you think it's a moot point (i.e. it will never pass)?

    BTW - You're also wrong about the sales tax.  Everyone does not pay "the same".  If you mean the same amount in real terms, you're wrong.  That would be a head tax where everyone pays the exact same amount, regardless of income.  if you mean in percentile terms, someone earning $100 million/year would only pay tax on the small percentage of the income they spend, while someone earning $25K will very likely spend all of their income.  Consequently, the tax on the multi-millionaire will (in percentage terms) be much smaller than the tax on the guy making $25K.  But I'm so shocked that a "social liberal" wants to increase taxes on the poor to lower taxes on the rich.  Limousine conservatives, huh?


    I do enjoy the winger favorite - Karl Marx reference.  Of course, the income tax system in the US has always been (to greater or lesser degrees) a progressive tax, not a true flat/head tax, so I guess that means we're all Marxists, huh, Jim?  Not to mention all those SS recipients who have been receiving SS for more than 6.2 years.  I guess they should start sending those checks back, unless they believe in "from each according to his ability to each according to his need" ... those Commie-lovers.


    Yes (none / 0) (#29)
    by jimakaPPJ on Fri Oct 21, 2011 at 07:59:01 PM EST
    a sales tax is fair in that everyone pays the same percent on what they buy.

    I thought even you would understand that.

    The graduated income tax is neither fair or progressive.

    It is merely an agreed to method to take money from people who are making more than others to pay for running the country and to reward certain people for doing things... having children, buying homes the two largest....that society finds "good."

    So let us be honest and quit twisting the English language.

    As for Social Security.... It was/is a huge ponzi scheme. As for 6.2 years, I don't know. Having seen the study so won't accept or reject your numbers. I have looked at mine, I started paying when I was 14, and using very conservative figures   I'll be dead long before I break even.....

    ....good citizen that I am......

    But I must remind you that you, as a child, was protected by Social Security and as an adult the support of your elderly parents has been largely removed....

    So don't feel so righteous!



    heh - the same percent ... (none / 0) (#30)
    by Yman on Fri Oct 21, 2011 at 09:32:56 PM EST
    ... "on what they buy".


    Millionaires and billionaires don't spend all their income.  Working class and poor people do.  Yet proponents of 9-9-9 love the idea of increasing taxes on the poor and working class so that wealthy can have lower taxes.

    You "Limousine Conservatives" sure are funny.

    BTW - Lots of people started paying into SS at age 14.  Unless you maxed out on your SS contributions for many years, you'll break even right around 6.2 years, regardless of when you started working.  Not to mention survivor benefits for Mrs. Jim, unless she earned enough to have higher benefits on her own.

    Funny how conservatives love them some income transfer when they're on the receiving end.



    As a matter of fact I maxed out for the last 35 (none / 0) (#31)
    by jimakaPPJ on Sat Oct 22, 2011 at 10:17:10 AM EST
    years of employment years paying FICA taxes. And I included survivor benefits in my calculations.

    And one more time.

    All tax payers paying the same percent is "fair."

    Some tax payers paying a higher percentage than others is not "fair."

    The graduated income tax is an agreed to method by which people who make more pay more while others in certain groups pay less.

    It is also a method by which the government coerces people into doing what the government wants.

    • buying homes

    • having children

    • buying specific products... such as health insurance and cars with better gas mileage.... insulating their homes to reduce energy cost...

    These things may be good, but they are not fair.

    Why should someone buying a home have their taxes reduced because they paid interest on their mortgage?

    And you know, I can't figure out why you tell me what conservatives like as if I am a conservative.

    I'm a social liberal. But being one doesn't mean that I am a member of the Left. Or the Right.


    Trick question, Jim (none / 0) (#33)
    by Yman on Sat Oct 22, 2011 at 09:00:42 PM EST
    The fact that you (supposedly) maaxed out on your SS contributions has no eefect on the payback period.  How'd I know you'd bite on that?  heh.

    But since you've done "calculations" that show that you'll be long dead before you break even, let's see your "conservative" figures.  I'd be very curious to see them, but knowing that they're just imaginary calculations, i won't be holding my breath.

    BTW - The tax system has never taxed everyone at the same percentages, and it never will.  But it's pretty funny hearing a "social liberal" argue for more taxes on the poor and working class so the wealthy can get a hee-YOOOOOOGE reduction in their taxes.  Seems like it was just a few weeks ago you were whining about "Limousine Liberals" who didn't want to protect the poor and working class, and arguing in favor of special tax breaks for the oil companies.


    If it walks like a duck ...


    responsive government (none / 0) (#24)
    by jondee on Fri Oct 21, 2011 at 03:39:50 PM EST
    and "everyone paying their share" sounds like a to-each-according-to-his-needs good little socialist plan in itself. Yes. Yes it does.

    And here I was thinking that the unresponsiveness had more to do with who can afford to make fatter campaign contributions and hire lobbying firms to represent their interests..


    If the share is equal it is fair (none / 0) (#27)
    by jimakaPPJ on Fri Oct 21, 2011 at 05:47:55 PM EST
    Are you saying socialist programs demand equal payments from all concerned?

    The things I learn.



    I think you made (none / 0) (#32)
    by jondee on Sat Oct 22, 2011 at 02:33:16 PM EST
    a conscious decision not to learn anything new sometime during the McCarthy era, and have pretty much stuck with the program ever since.

    The interpretation of "equal" is the rub of course; as in, equal SACRIFICE and equal oppurtunity -- which brings us to another little item sure to the drive limousine "social liberals" crazy: the closing off of all loopholes and offshore tax-dodges of the rethug and famous.  


    Ya forgot... (none / 0) (#13)
    by kdog on Thu Oct 20, 2011 at 02:35:56 PM EST
    that a significant portion of my income is spent on certain items that are not taxed under anybody's plan.

    I may be subject to arrest pretty much all the time, but there is that perk:)


    Well, that is a significant saving (none / 0) (#15)
    by jimakaPPJ on Thu Oct 20, 2011 at 10:45:00 PM EST
    because you won't be paying the federal sales tax and you will more disposable income.

    Can Cain count on your vote!!!!???



    Can't do it brother... (5.00 / 1) (#18)
    by kdog on Fri Oct 21, 2011 at 07:51:19 AM EST
    there is more to life than lowering taxes, and I couldn't do my working class brethren dirty like that...damn social conscience, a blessing and a curse! :)

    Ah ha,,,,,To be fair then (none / 0) (#21)
    by jimakaPPJ on Fri Oct 21, 2011 at 09:16:16 AM EST
    Then start paying sales taxes on those, uh, more personal purchases we were speaking of that sales tax is not being collected on.

    Just send the state a check. They won't ask questions.



    The social conscience... (5.00 / 1) (#22)
    by kdog on Fri Oct 21, 2011 at 09:20:51 AM EST
    is clear on that front my friend...4 large or so is quite enough outta me federally, and whatever the state/county/town vig is via income tax, sales tax, indirect property tax.

    Mama didn't raise no mark!


    Kdog (none / 0) (#25)
    by jimakaPPJ on Fri Oct 21, 2011 at 05:30:52 PM EST
    I love ya, bro!

    But that's the same justification that the rich use!