Fox News/Christian Science Monitor: 999 plan raises taxes on middle-class

[anvi]

I don't know if this has been posted elsewhere, but I found it and the associated links interesting.

http://www.washingtonpost.com/blogs/fact-checker/post/herman-cains-misleading-pitch-for-the-999-plan/2011/10/12/gIQAHszPgL_blog.html?hpid=z2

[Swing low, sweet chariot. Comin' for to carry me home.]

And the 9% VAT

there is no 9% VAT in 9-9-9

From Cain's website:

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What else would you call that? It's certainly not a corporate income tax.

gross income - all investments - all purchases - dividends...

yo, I think that is even more generous to the corporations than a flat corporate income tax, for a corportate income tax is calculate PRIOR to dividends, and thus Cain's plan seems to end double taxation of corportate profits.

[Averroës Nix]

And the 9% VAT

there is no 9% VAT in 9-9-9

From Cain's website:

You must be logged in to read this quote.

What else would you call that? It's certainly not a corporate income tax.

gross income - all investments - all purchases - dividends...

yo, I think that is even more generous to the corporations than a flat corporate income tax, for a corportate income tax is calculate PRIOR to dividends, and thus Cain's plan seems to end double taxation of corportate profits.

Yes. Essentially, Cain's plan creates 3 tax brackets. Those reliant on transfer payments pay 9% twice (sales tax and business flat tax/VAT reflected in the price of goods). The middle class and the working poor pay 9% three times (sales tax, business flat tax/VAT, and income tax). And those wealthy enough that wages are not their primary source of income pay 9% twice.

Conservative tax policy analysts have raised concern over the fact that, since the business flat tax is "hidden" in the prices of goods (from the consumers perspective), this tax isn't as transparent as Cain claims.

And of course, this is just "Phase I."

[Likely Voter]

How can Cain say his plan helps with jobs when he eliminates the ability for businesses to deduct the cost of wages?

Oh and the fact that new homes are taxed but "used" homes arent is going to be a great for the construction industry (not)

The more people look at thing the worse it gets.

[Lief 🗽]

Yes, that is genuinely the goal of all Republican economic policy: take money from the poor/middle-class, give it to the rich.

[big bad fab]

So, will this kill Cain's second (or first real) momentum ?

[Swing low, sweet chariot. Comin' for to carry me home.]

How can Cain say his plan helps with jobs when he eliminates the ability for businesses to deduct the cost of wages?

dude, please:  gross income = revenue - cost of goods sold

wages are included in "costs of goods sold", and gross income is simply your profit (in any) AFTER cost of doing business (which includes wages) but BEFORE deductions

[Roemerista]

So, will this kill Cain's second (or first real) momentum ?

I think the national sales tax line of attack will work well against him. We have already seen it emerge in the GOP debate.

[Swing low, sweet chariot. Comin' for to carry me home.]

So, will this kill Cain's second (or first real) momentum ?

no, because there are enough people, like me, to explain his simple plan to ignorant folk who don't know the difference between revenue and gross income.  And the more these arguments trying to tar 999 are exposed for their ignorance, the more understood the plan will become and people will begin to realize how simple 999 makes the tax code, transforming it from 70,000 pages to something most (key word) people can grasp in a single session.

[Fmr President & Senator Polnut]

Yes, ladies and gentlemen... the Forrest Gump of economic policies.

[Insula Dei]

I hope Cain remains popular long enough to force our media to cover this.

[memphis]

Obviously. Every GOP plan to change the tax system is a scheme to shift the tax burden off the rich and onto the rest of us. It's the party's entire purpose. Dems want a better standard of living, and the GOP wants lower taxes for rich people. How is this news to anybody?

[anvi]

How can Cain say his plan helps with jobs when he eliminates the ability for businesses to deduct the cost of wages?

dude, please:  gross income = revenue - cost of goods sold

wages are included in "costs of goods sold", and gross income is simply your profit (in any) AFTER cost of doing business (which includes wages) but BEFORE deductions

But it's all in what Cain makes deductible in the "cost of goods sold" part of the equation.  The plan allows companies to deduct purchases from other companies (and dividends) from the cost of goods sold, but mentions nothing about a deduction for wages.  That certainly effects sole proprietors, who can currently count such wages as separate businesses expenses from benefits they pay on behalf of and to their employees when calculating their tax liability.  It doesn't effect manufacturers in the same way, since they include wages in the cost of goods sold when they file--but it certainly does give manufacturers an incentive to reduce their tax liability by purchasing a machine from another company to produce a good rather than hiring or raising the wages of a worker to produce the same good.  It's at least doubtful whether the half-share the company would save under Cain's plan by not having to submit the payroll tax would be enough to counteract the disincentive to hire a worker or pay them more created by Cain's identified deductible expenses.  So, whatever other perks it might have, particularly for companies with large amounts of revenue, it's hard to see how the tax plan does much for workers looking for jobs.        

[Averroës Nix]

How can Cain say his plan helps with jobs when he eliminates the ability for businesses to deduct the cost of wages?

dude, please:  gross income = revenue - cost of goods sold

wages are included in "costs of goods sold", and gross income is simply your profit (in any) AFTER cost of doing business (which includes wages) but BEFORE deductions

Some wages. Cost of goods sold excludes operating expenses.

[Averroës Nix]

So, will this kill Cain's second (or first real) momentum ?

no, because there are enough people, like me, to explain his simple plan to ignorant folk who don't know the difference between revenue and gross income.  And the more these arguments trying to tar 999 are exposed for their ignorance, the more understood the plan will become and people will begin to realize how simple 999 makes the tax code, transforming it from 70,000 pages to something most (key word) people can grasp in a single session.

The problem isn't that people can't grasp 9-9-9 in a single session. The problem is that while people like you think that they can, actual tax policy experts, including conservative ones consider it a delusional disaster that would be especially harmful to wage-earners.

Of course, you can dismiss all of these people as morons and charlatans. I expect that you will. But I have a prediction: By the time actual contests take place, Cain will be discredited, and the jmfcsts will either support Perry or eat the Romney dog food. (Of course, there's always the chance that you're not the personification of the GOP base...)

[The_Texas_Libertarian]

What is it with the conservatives wanting to raise taxes on the poor?  I just don't understand the desire to do so. 

Also a national sales tax sounds like a terrible idea.  I'm a liberal and all for people paying their taxes, however I'm not for smacking the market place when it is down.  The only time I agreed with Rick Santorum (I can't believe I just typed that) was when he said "Who thinks those taxes won't go up?"

9-9-9 could easily become 15-15-15 or if the conservatives really feel like metaphorically smacking the poor around even more it could be 15-20-9

[SPQR]

What is it with the conservatives wanting to raise taxes on the poor?  I just don't understand the desire to do so. 

Also a national sales tax sounds like a terrible idea.  I'm a liberal and all for people paying their taxes, however I'm not for smacking the market place when it is down.  The only time I agreed with Rick Santorum (I can't believe I just typed that) was when he said "Who thinks those taxes won't go up?"

9-9-9 could easily become 15-15-15 or if the conservatives really feel like metaphorically smacking the poor around even more it could be 15-20-9

Hey,at least it's easy to understand!!!

...

[All Along The Watchtower]

Objection. The middle-class don't pay taxes.

After all, everyone knows the top 1 percent pay 99 percent of income taxes.

[Swing low, sweet chariot. Comin' for to carry me home.]

dude, please:  gross income = revenue - cost of goods sold

wages are included in "costs of goods sold", and gross income is simply your profit (in any) AFTER cost of doing business (which includes wages) but BEFORE deductions

But it's all in what Cain makes deductible in the "cost of goods sold" part of the equation.  The plan allows companies to deduct purchases from other companies (and dividends) from the cost of goods sold, but mentions nothing about a deduction for wages.  That certainly effects sole proprietors, who can currently count such wages as separate businesses expenses

didn't I already say that wages were included in the cost of goods sold?  "cost of goods" being the company's cost to produce the product, including wages

http://www.irs.gov/publications/p334/ch06.html

[Likely Voter]

jmfcst, Like Cain, you are just making this stuff up.


As noted by a Bloomberg analysis and editorial today:

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http://www.bloomberg.com/news/2011-10-14/cain-needs-to-give-voters-the-411-on-his-9-9-9-tax-plan-view.html

And the same analysis from Bruce Bartlett (Republican economist) in the NYT

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http://economix.blogs.nytimes.com/2011/10/11/inside-the-cain-tax-plan/

And a USC analysis (done for Bloomberg) states:

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1941800

And from the International Business Times

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http://www.ibtimes.com/articles/230692/20111013/herman-cain-999-plan-tax-will-it-work-experts.htm

And then there is this from the conservative NRO

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http://www.nationalreview.com/agenda/279761/herman-cains-9-9-9-plan-has-vat-plus-sales-tax-josh-barro


...and then there is the job-killing sales tax.

again from Bloomberg:

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http://www.businessweek.com/news/2011-10-14/cain-s-sales-tax-would-hurt-consumer-spending-for-some-years-.html


...And all of the above comes from Republicans, conservatives and the business-oriented press or trade groups.

Face it. Cain's plan just wasn't well thought out. Ironically many (if not most) of the tea partiers who are supporting it would probably end up paying more under the program. Someone needs to make up the revenue for the ginormous cut going to the wealthy and super-wealthy.

[Swing low, sweet chariot. Comin' for to carry me home.]

jmfcst, Like Cain, you are just making this stuff up.


As noted by a Bloomberg analysis and editorial today:

You must be logged in to read this quote.

http://www.bloomberg.com/news/2011-10-14/cain-needs-to-give-voters-the-411-on-his-9-9-9-tax-plan-view.html

And the same analysis from Bruce Bartlett (Republican economist) in the NYT

You must be logged in to read this quote.

http://economix.blogs.nytimes.com/2011/10/11/inside-the-cain-tax-plan/

And a USC analysis (done for Bloomberg) states:

You must be logged in to read this quote.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1941800

And from the International Business Times

You must be logged in to read this quote.

http://www.ibtimes.com/articles/230692/20111013/herman-cain-999-plan-tax-will-it-work-experts.htm

And then there is this from the conservative NRO

You must be logged in to read this quote.

http://www.nationalreview.com/agenda/279761/herman-cains-9-9-9-plan-has-vat-plus-sales-tax-josh-barro
 

I wouldn’t wager against jmfcst on this one…he knows the corporate tax code very well.

[Likely Voter]

I see. So you are right and everyone else is wrong. And trust you and your secret advisers? You are Herman Cain arent you?

[Swing low, sweet chariot. Comin' for to carry me home.]

are they saying the supposed 9% on wages (since wages are supposed now counted as taxable profit), is to make up revenue for removing the employer's side of social security tax?

[Swing low, sweet chariot. Comin' for to carry me home.]

I see. So you are right and everyone else is wrong. And trust you and your secret advisers? You are Herman Cain arent you?

look, "Cost of goods sold" is an extremely common tax term and it DOES includes wages, for it represents the cost (to the producer) to produce the good that is being sold.

what is confusing people is what Cain means by deducting "all purchases from other businesses"....which could simply be Cain's way of saying that the 9% sales tax businesses incur by buying goods from other businesses is tax deductable.

[Likely Voter]

So you are sticking with the you are right and everyone is wrong line. OK. done talking to you.