Saturday, October 15, 2011

9-9-9: It's Simple!

Dear Madame L,

I watched the Republican presidential candidates' debate the other night, and I was impressed that out of all of those candidates, only Herman Cain had an actual proposal for adding funds to the U.S. budget. 

His 9-9-9 proposal seems fair and simple, with everyone paying the exact same taxes.

What do you think?

Sincerely,

Can't Say No to 9-9-9


Dear No, No, No,

Republican presidential candidate Herman Cain's 9-9-9 tax reform proposal is indeed simple, as he keeps saying. He proposes that every American would pay "only" 9% income tax, a 9% national sales tax, and
a 9% corporate income tax.

This is how simple it really is: The poor, the working poor, the middle class, in fact, the 99% of us who are not wealthy will end up paying more taxes than ever before, while the 1%, the wealthy, will pay less. 

Another thing Cain neglects to mention in debates and in his stump speeches is that his plan would eliminate Social Security and Medicare.

Would you vote for this man? Madame L is trying to imagine a situation in which she would vote for Cain, and she simply can't.

Here's an analysis of the proposal by NBC News reporter Domenico Montanaro, based on a report from the non-partisan Tax Policy Center. 

The plan would create a "much more regressive tax system," according to the center. People at the top would go from about a 35% income tax rate to 9%, a 26% tax cut, while those who currently don't pay federal income tax would have a huge increase, from 0% to 9%. 

A further analysis of Cain's assertion that a family earning $50,000 per year would pay less income tax under his plan reveals that he's way off.  In fact, this hypothetical family with two children, using standard deductions, would have paid about $775 under the 2010 IRS tax rules. This same family under Cain's plan would pay, according to him, "only" $4,500.

The 9% federal sales tax would be in addition to state and local sales taxes, so people in Washington State, for instance, would pay their usual 8% sales tax plus the federal 9%, adding up to a 17% tax increase. This is a bigger cut from the spending money of poor people, too.

And, as for the 9% corporate tax: This would seem like a cruel joke, except Madame L is not laughing. This would amount to another huge cut for the richest Americans, essentially lowering their theoretical and actual tax burden significantly.

No, no, no, please, if you want to vote for Herman Cain, please insist that he first get some "better advisers," which he said he will be doing, and some better ideas!

Sincerely, 

Madame L, Already Taxed to the Limit

1 comment:

Jeff said...

Thank you for setting the record straight. You forgot to mention the moron (NOT an economist, NOT a tax specialist, and NOT an accountant) from whom Cain actually GOT this loony idea.

I'm reminded of the Monty Python skit where Eric Idle looks frightened and says "You're a Looney, you are!"

~~~~~