Herman Cain's 9-9-9 Plan: The Pro and Con
There has been a lot of spin and talk about Herman Cain's 9-9-9 tax reform plan for the USA. It has put some interest in the Republican presidential candidate. His popularity in the polls have equaled or passed Mitt Romney.
As Cain suggested, everyone should do their own research of it. That is what the Tax Policy Center and the Brookings Institute just did. Its current director is also republican who worked under President Bush.
The study's sum indicated that the 9-9-9 plan would raise taxes for low and moderate income levels while cutting taxes for the upper income levels. The 9-9-9 plan would remove the current tax code, high corporate 35% tax rates, then, have 9% income tax, 9% on businesses and a 9% national sales tax (on top of the State sales tax). If your State sales tax is say, 8%, it would become 17% on top of the cost of the item. Under the 9-9-9 plan, if you earn more than $111,000 a year, your taxes would drop by $14,400. If you earned only $17,000, your taxes would rise by $1,854! Huh??????????
In the past, tax revenues have averaged a total of $2.3 trillion. In Cain's 9-9-9 plan, tax revenue come to around $33 trillion and anyone below the poverty line is exempt. Cain's plan would raise $7.7 trillion in income tax, $8.3 trillion in sales tax and $9.5 trillion in business tax. It is likely because of the lower marginal tax rates, the labor supply and business captial will increase significantly as would tax revenues. All this will eventually lead to more jobs and industry would begin to surge again, so it is hoped.
But, change is difficult for everyone, whether you are a Aries or a Taurus or Virgo. Unless Cain can sell his concept to the mass of Americans and his own Republicans, like other plans before it, it will be brushed aside.