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In the Oct 2 monthly candidate’s report I wrote that someone would turn the 999 upside down and connect it to the Biblical "mark of the beast". I was expecting that to come from a comic, but it was actually Michelle Bachman who sprang it on the world in the Tues., October 11 debate. Well maybe I wasn’t wrong about what the source would be.
So what about the 999? Well, it was funny watching David Gregory on Meet the Press attempting to “explain” to Cain that his 9% sales tax would come on top of state taxes!!! Apparently David thinks that the current federal taxes do not come on top of state taxes.
Seriously though, the idea of replacing a very progressive income tax, which almost half of the people do not even have to pay, with a flat rate sales tax is considerably more regressive than I would like to see us go for. Cain is apparently betting that he can sell this as an approach that does not shift the burden of taxation from one group to another. Perhaps Cain should be forgiven for believing this since the public accepts so much mythology these days. But I think that this is a fairy tale too far.
I expect that when people understand it better they will not like it either. But the people who really won’t like it (the left) will, I expect, never have the chance to vote for it.
Monday, October 17, 2011
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999 – 9% income tax, 9% corporation tax, and 9% federal sales tax
ReplyDeleteI am all for reforming and replacing the current income tax system with something simpler, but I have two major issues with the 999 plan
HIDDEN TAXES - I dream of a tax structure that makes in completely transparent (obvious) how much tax is being paid. So that being said, the problem I have with the second 9 is that a corporation tax is reflected in the price of products or services provided by a corporation and therefore is actually a hidden tax on consumers. We have that now with existing corporate taxes, but I can at least hope to avoid that in a new plan.
AFTER TAX SAVINGS - The other issues I have is a transitional issue. The third 9% is a replacement for revenue that would not be collected through income tax which means after tax retirement savings (saved prior to the switch over) would be taxed again when the dollars are spent. So, I would see a reduction of 9% in the purchasing power of my after tax retirement savings. I would have to see some sort of exemption for after tax savings (saved prior to the switch) before I could consider supporting the 999 plan.
I will reserve any comments on shifting the tax burden to different groups for another day.
p.s. Rick Perry’s wife made the same “added on to existing sales tax” argument that YA mentioned in connection with David Gregory.