Herman Cain's 9-9-9 tax plan

Herman Cain

The Washington Times had an interesting column about presidential candidate Herman Cain and his tax plan called 9-9-9. Cain’s plan calls for a 9% personal income tax, 9% corporate tax and a 9% national sales tax.

A flat income tax of 9 percent would bring in about $1.12 trillion. Corporate taxes at 9 percent ? about $270 billion. A national 9 percent sales tax, about $378 billion.

That?s only (only!) $1.768 trillion, well short of what this year?s tax revenue of $2.16 trillion. But wait. With some hefty growth (and using a projection not far above the Obama administration?s own estimates), the 9 percent income tax would bring in about $1.4 trillion, corporate taxes an estimated $321 billion, and the national sales tax about $450 billion. Boom ? $2.17 trillion.

Sure, that?s well short of the $3.8 trillion Mr. Obama wants to spend, but it does at least match up with current revenue. And, hmm, maybe America should spend less, and, this is crazy, try to match its expenditures with its revenues.

Cain had a great line in a recent debate:

?If 10 percent is good enough for God, then 9 percent ought to be good enough for the federal government.?

Agree or disagree with Cain’s plan, I like the fact that he is actively engaging Americans about the state of our current tax code with his own ideas. Something I would like to see more of from both parties and all candidates rather than the silly bickering that seems to take place every election cycle.

Let’s stop arguing about semantics and start working on solving the problem.

The article concludes:

And it?s becoming more clear that next November, voters won?t like the president?s own 9 percent plan ? 9 percent unemployment. Maybe Mr. Cain?s is just a bit better.

31 Replies to “Herman Cain's 9-9-9 tax plan”

  1. Duh

    I like Cain. The GOP antidote to Oblabla. Smart man, actually held a private enterprise jobs. However, how does the 9% national sales tax jive with state sales taxes? On top or included. 15% sales tax in SD would not be fun.

  2. Anonymous

    Dud Cain can’t beat Obama, your probaly a Perry fan who wants to keep the borders open and pay for illegals health care and schooling.

    1. Anonymous

      Cory

      About the time you make sense about something – you turn around and show your true colors – I thought you were on to something about the Madison School District and the cost of school atheltics programs and then you just lose your credibility with comments like this.

  3. duggersd

    Duh, I am sure the tax is on top of the state sales tax. However, when you consider all of the taxes that are not being collected on the corporate level, I am thinking the prices of the goods you purchase would be lower due to not having as high of a cost (taxes–remember corporations do not pay taxes). I think by the time it all shakes down, we will be paying about the same or less than the total costs are now.

  4. Anonymous

    This is insane….taxes would rise on everyone if this was passed, especially the poor. 15% sales tax in SD would be insane and more than most South Dakotan’s already pay…..

    1. duggersd

      Um, the poor are already paying about 15%. By the time you figure in the payroll taxes that would not be collected, it would be pretty close to a wash. And it would not hurt for the poor to pay something in taxes anyway. At least then they would have, as BHO says it, some skin in the game.

    1. duggersd

      National sales tax does not equal European style value added tax. A value added tax is a tax on every step of the process. A national sales tax is only a tax at the retail level. Not nuts. An idea worth considering. BTW, the national sales tax would also get a lot of the “underground” income that currently goes unreported.

      1. Stan Gibilisco

        Dugger,

        Technically you’re right. But a lot of people don’t know the difference and most people would never see it. Lots of sneaky pols say “national sales tax” when they really mean “value-added tax.”

        I’ve heard the claim that a national sales tax would capture unreported income. How so? Would the cheaters who fail to report income on their regular income tax return suddenly fall into line and register for the national sales tax, so they could pay it?

        I’ve heard Bill O’Reilly (who favors a “small national sales tax”) say that drug dealers and other illicits would have to pay the tax. How so? I can’t see a drug dealer risking that exposure — or a user, or an intermediary, for that matter. Nor would I see an illegal alien, selling fruit by the side of the road, registering for the sales tax and risking exposure. They cheat now, they’ll keep cheating.

        Moreover, I see no reason to believe that the national sales tax (or the income taxes) would remain at 9 percent. After a few years we’d be saying “12, 12, 12” and then “15, 15, 15” and so on right up to the threshold of taxpayer rebellion.

        1. Stan Gibilisco

          Oh please let me reply to myself …

          One of the chief “advantages” of a value-added tax (VAT) over a national retail sales tax (NRST) is the fact that the VAT is easy to conceal from the end consumer. Typically they don’t see the VAT on a purchase receipt; it appears as a price increase. Phased in gradually over time at higher and higher rates, the VAT can evade detection even up to rates of around 25 percent (as European examples show).

          Another “advantage” of the VAT is the fact that it’s harder to evade. The original producer must charge the next business down the line, and that business charges the next, et cetera, et cetera, so that each link in the chain gets pulled (or, if you’d rather, the hose has multiple small leaks rather than one big leak). Nevertheless, in a totally illegal trade such as the cocaine business or the meth business or anything done by illegal aliens, the crooks would not pay the VAT. They’d never register in the first place. They’d rather absorb a loss of, say, 9 percent than risk arrest and/or deportation.

          Finally, the VAT or NRST (either one) as proopsed by Cain constitutes a brand new tax with a brand new buraucracy to administer it, and a whole bunch of brand new paperwork for every single happless honest business in America.

          Nuts, say I! Nuts and more nuts!

        2. duggersd

          “How so?” Let us suppose you are a drug dealer and have made $1,000,000 in cocaine stained cash for the year. Are you going to report it on your 1040? I doubt it. But what are you going to do with it? Are you going to keep it under your mattress? I doubt that. Maybe that new black Lincoln with the tinted windows catches your fancy. Are you going to buy that underground? I doubt it. You are most likely going to go to a dealer and purchase it so it can be licensed, etc. That $45,000 vehicle plus the $15,000 in add-ons will be taxed at 9% (or with the Fair Tax at a different level). Currently, that $60,000 goes unreported and untaxed.
          Have you read the Fair Tax book? It is an interesting read. It has a lot of good points and could possibly answer some of your questions. I am not an authority on it other than what I read in the book and hear.

          1. Stan Gibilisco

            Dugger:

            Okay, I see that part of it (buying a legitimate car with illegitimate funds). Illegal aliens would also pay some tax when they buy stuff.

            Fair tax? I have mixed feelings about that. I get nervous when people talk about “tax reform” these days for reasons outlined in my later comment. I feel like “no news is good news.” However, the Bowles-Simpson plan, if implemented, would have put me ahead, so of course I was in favor of it!

            I still don’t like a national consumption tax of any sort. I think it would hurt more than it would help.

            1. duggersd

              Actually, Stan, if you check out the FT, nothing takes place until the Federal Income Tax amendment is removed from the Constitution. But again, if you read the book, it has some very good information. It might even be free if you have one of those electronic books.

  5. Stan Gibilisco

    Everybody has their tax reform plan, it seems, and no two of them are alike.

    People grouse about uncertainty, and then point the finger only at Obama and his administration.

    It’s like every one of these wonks, pols, and pundits wants to pee on some damn fire hydrant.

    Truth is, I don’t have a clue as to what I should expect in the tax landscape over the next few years.

    So I’m preparing for any eventuality by hoarding cash.

    As are thousands, if not millions, of other small businesses.

    No cash flow equals no recovery.

    I wish these idiots would let the fire hydrants fend for themselves. They have plenty of water if we’ll just get out of the way and let them work.

  6. NO NO NO TO 9 9 9

    Herman likes to boast that 9 9 9 is revenue neutral. Who here is happy with the massive amount of money that the government takes in every year? I don’t want my candidate to be okay with the current size of the federal government. Find me the candidate proposing the 0 0 0 plan and I might listen.

    1. duggersd

      Please explain how your 0 0 0 plan would pay for the necessary expenditures of the US? I do not like big government any more than most other people, but surely you do realize the government has to have some sort of funding mechanism to pay for what it does need to do. This is the only concrete plan amongst the Republican candidates I have seen.

      1. NO NO NO TO 9 9 9

        Dugger,

        If the government were to stick to the enumerated powers set forth in the constitution, Washington could really get by with much less. 222 or 333 maybe. or how about a 0 0 9 plan which includes only a national sales tax of 9% only. I’m just not impressed with a candidate who is interested it maintaining the same level of income for our federal government.

        Furthermore – how can you vote for a candidate who will give you no indication of his foreign policy save for “listening to his generals?”

        I though Cain was an attractive candidate at first too. Now I see him as a just another big government war mongering Republican.

        1. duggersd

          Actually, I have not chosen anybody at this time except I know who I am not going to vote for in November, 2012. I would hope if Cain is the nominee, he will have a team. Even Ronald Reagan had his “kitchen cabinet”. Nobody can be all things to all people.
          In the world in which I live, I know that even though there are things not enumerated in the Constitution being funded, most of that is not going to be eliminated. Based upon what you have written, there is nobody you could support. Even Santorum would not meet your litmus test.

            1. duggersd

              Well, we will talk about Ron Paul when he runs. In the meantime, I live in the real world. BTW, I doubt Ron Paul could get what you (and he) would like accomplished. There is a pesky thing called the Congress, you know.

  7. Duh

    Question: Are state sales taxes deductible on your federal return? I’ve always thought they were. If so, how do you keep track? Save every friggin reciept or add up your expenditures and take times the sales tax? Sounds daunting but if true, would cut a lot off.

    1. duggersd

      At one time they were, but I am thinking no longer. It seems to me it was some sort of a compromise because state income taxes are deductible. If they still are, the feds offer a table that gives you a standard amount based upon your income. The other alternative is to keep track of everything.

      1. veldy

        They were for 2010, and it is an income based table, with extra deductions allowed for big ticket items, such as automobile

        1. duggersd

          I stand corrected. Then I got to thinking about it. I went short form the last couple of years so I did not have to worry about it. Thanks for the fumble recovery.

    1. duggersd

      I read that article. They said he was about where he was a month ago, yet a month ago he was down to BHO by 7% and today it is 5%. I do not know about you, but that is a shift of 28%. The downside is Cain went from 35% to 34% and BHO went from 42% to 39%. The upside is this is telling me the people are getting tired of BHO and really interested in who the Republicans decide to offer.

  8. insomniac

    I noticed that Cain is now polling in the top tier.

    Also he said he couldn’t support Rick Perry! YIKES!

  9. CaveMan

    All we know for sure at this time is the summer of 12 will see some big time fireworks in Florida before this all ends with a GOP Presidential winner at the convention who the majority of conservatives believe represent them and can beat Obama.