Saturday, October 15, 2011

Herman Cain's 999 Plan will TRIPLE Taxes for the Elderly and the Poor! And CUT Taxes for the Rich!

Herman Cain's 999 Plan will be a TRIPLE threat to the Elderly and the poor, those who can least afford it! His 999 Plan will more than TRIPLE taxes for the Poor and Elderly while drastically lowering them for the Rich and Big Business!
1. 9 % Income Tax: He would eliminate Income Tax and replace it with this Tax. He also would eliminate the earned income tax credit for the poor. The right is always talking about the 47% who don't pay taxes. These are the elderly, the sick, those making below the poverty level (who eat catfood). Now, he plans to eliminate their tax credits and force them to pay 9% of their meager pennies income. Meanwhile, the rich who pay 15 - 35% taxes will have their income taxes drastically reduced. This means, as a nation, we will collect Trillions LESS overall Federal Taxes and go further in debt.
2. 9% ADDED Federal Sales Tax: On top of the Income taxes he is raising on the Poor, he will enforce an ADDED 9% sales Tax. In Texas, we have an 8% Sales Tax. With Herman's 999 plan, he will add a 9% Federal Tax = 17% Tax on EVERY purchase!
3. 9% Business Transactions Tax: Drastically cutting them for Business Employers, NOT for the Workers!
Washington Post reports: The Facts
The “9-9-9” label is actually a bit of misnomer. Cain would toss out much of the current federal tax code and replace it, eventually and only temporarily, with three taxes — a 9 percent income tax, a 9 percent business transactions tax and a 9 percent federal sales tax. On paper, the first two look like cuts, because payroll taxes for Social Security and Medicare (now nearly 15 percent, including corporate contributions) would be repealed. The sales tax would be new, on top of existing state sales taxes.

But note that we said the “9-9-9” would happen eventually — and then only temporarily. That’s because it is only the second step of a planned three-step process. The first step would cut individual and corporate tax rates to a top 25 percent rate (down from a current high of 35 percent). Then the final step would replace all of the taxes — even the 9s — with a national sales tax, known by proponents as a “Fair Tax.”

(As denizens of Washington, we find this three-step process to be highly dubious. It takes years, even decades, to fundamentally overhaul the tax code. Herman Cain is going to do this three times in his presidency? But we digress.)

Much attention has focused on whether Cain’s plan, in its 9-9-9 stage, would raise as much revenue as the current tax system. Bloomberg News had calculated it would collect about $2 trillion, thus falling short by about $200 billion a year. But Lowrie sent Bloomberg an analysis on Wednesday that asserted “9-9-9” would actually collect slightly more — $2.3 trillion.

We think the revenue question is beside the point. Anyone can turn the dials in their computer models to generate the assumptions they want.

Michael Linden of the left-leaning Center for American Progress, for instance, estimates the plan would generate just $1.3 trillion. The biggest difference between the two estimates is that Linden thinks the 9 percent business tax would yield $112 billion a year, and Cain says he would get $862 billion — a gap that simply demonstrates how a few different assumptions can generate extremely different results. (Linden on Thursday updated his analysis, saying he had underestimated how much revenue the business tax would raise.)

Cain’s proposal is so radical that it makes more sense to examine the potential impact on taxpayers. A key part of Cain’s pitch for the plan during the debate was this: “When you expand the base, we can arrive at the lowest possible rate, which is 9-9-9.”

“Expand the base” really means that more taxpayers will pay taxes under his plan.
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.”

Bruce Bartlett, a former Reagan administration official who now calls himself an independent, also offered a critical examination this week on the New York Times Economix blog. He (as did Kleinbard) noted that the business tax allows for no deduction for wages, which he said “is likely to raise the cost of employing workers, even with abolition of the employers’ share of the payroll tax.”

Cain, in his television appearances, glosses over such details. “The fact that we are taking out embedded taxes that are built into all of the goods and services in this country, prices will not go up,” he asserted on MSNBC. “They will not go up.” He then gave an example of a family of four earning $50,000.

“Today, under the current system, they will pay over $10,000 in taxes assuming standard deductions and standard exemptions. I've gone through the math, $10,000. Now, with 9-9-9, they're going to pay that 9 percent personal — that 9 percent tax on their income. So that's only $4,500. They still have $5,500 left over to apply to this sales tax piece. …They are still going to have money left over.”
We’re not sure how Cain calculates that this family now pays $10,000 in taxes, but the reliable Tax Foundation calculator comes up with a much more reasonable figure: a total tax bill of $3,515 — $690 in federal income taxes and $2,825 in payroll taxes. (The family gets a big income-tax savings from the child tax credit, which Cain would eliminate.)

So, in other words, under Cain’s plan, this family would instantly pay $1,000 more in income taxes. They would also pay additional sales taxes, probably more than $3,000, on their purchases. It’s unclear how the business tax would affect the family’s tax bill but it appears this theoretical family would get no tax cut but instead a 100 percent tax increase.

(The picture changes somewhat if you assume that all the employer-paid payroll taxes automatically would revert to the employee. We’re not sure that’s a good bet given the design of Cain’s business tax, but pro-Cain advocates make that assumption with their own tax calculator. But even under this scenario, the family appears stuck with at least a $2,000 tax increase.)

We take no position on whether it is good or bad to make the tax code less progressive. Perhaps in response to questions, Cain appears to still be tinkering with the plan. In Concord, N.H., he said on Wednesday that, among other changes, he would preserve the deduction for charitable donations and would exempt any used goods, including previously owned homes and cars, from the new 9 percent sales tax. (read rest of the article here)

1 comment:

Felix Jaure said...

G.O.P. presidential candidate, Herman Cain, will be attending a political fund raiser in his own behalf, October 17, in Phoenix, Arizona. His Schedule includes a meeting with Maricopa county's infamous Sheriff, Joseph Arpaio.

Herman Cain, along with three other Republican presidential candidates, consisting of Tea Party hopeful Michell Bachmann, Texas, Governor Rick Perry, former Governor of Massachusetts, Mitt Romney, have all petitioned Sheriff Arpaio, for his blessing in their bid for the White House. Arpaio's endorsement would most certainly place them in a favorable position with Tea party, far right wing extremists.

The Sheriff, who has obtained, nation wide celebrity status, due to his ruthless antics towards illegal immigrants, including Mexican Americans, with a record breaking 6300 alleged reported cases of civil rights violations against his department. His resume includes but not limited, to 20 crime sweeps, which focuses mainly on his departments efforts of intimidation, and terrorizing residential neighborhoods in highly populated Latino community's.

Obviously the top four Republican, presidential candidates show little or no interest whatsoever, in the violation of human rights inflicted upon the Hispanic community in Maricopa County. Their primary mission remains focused on winning the approval of a nation whose hero is a criminal, masquerading in the likeness of law enforcement. Sheriff Joe Arpaio, a hero to some, a villain to others, ultimately your taste will make that determination.

Abraham Lincoln: " Courage is of no value unless accompanied by justice"

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