Cain's 999 plan

[jcummins]

I see two big problems with Cain's 999 plan. I want to like Cain, he's not as much of a politician as the others…but these two issues I've raised on some Cain facebook sites. Not only did they not answer….they deleted the exchanges we had so the rest of the world could not see. Censorship. So…..tell me how I error in my thinking.

Seniors appear to be hit hard. I'm on social security, and pay little to no income taxes. Under Cain's plan I pay 9% flat tax, and then I pay another 9% when I buy something with what is left. Cain has said the elimination of all the taxes in the product stream will lower prices and it will wash. Do you trust any business to pass on the savings? Ever heard of a bird in hand is worth two in the bush. I don't have the faith prices will come don't to offset the 9% sales tax. Then the 9% flat tax in itself is more than I pay now.

Savings. Although I have very little savings falling into this category, take this scenario. You work, save and have after tax dollars in a savings account. All of which was saved before Cain's change to 999. Now, you want to spend the money you have already paid federal tax on…you owe no more to the feds. Yet you spend it, you pay 9% sales tax. Double taxation.

 

[Faster horses]

Interesting.

A friend and I had a conversation about the 9-9-9 plan
in regards to ranching/farming. Here is some of the conversation:

Aside from that and assuming it would go through, what do you think about a national sales tax or the Fair Tax, as I believe others have called it?



I've always wondered how that would affect small businesses like ranchers. I think that most ranchers fall into the same boat with perhaps a lot of gross income but their expenses wipe out most of it each year. For example, when a rancher spends several hundred thousand dollars a year he/she might pay $10,000-15,000 in Federal Income taxes in any given year, and sometimes less. In those bad years when ranches lost money or broke even, very little or no tax was paid, yet the same
amount of money was SPENT. Of course, each year is different and it varies wildly from year to year. The 9-9-9 plan would cost ranchers
way more in the end, because of the flat 9% tax.


If ranchers/farmers had to pay 9% sales tax on $350,000, that would come to $31,500 or more than twice what has been typically paid in Federal income tax. Then there would be an additional 9% on the net income. It has seemed to me that we would lose big with the national sales tax plans that have been floating around for the past many years and Cain's plan sounds even worse for ranchers. A typical wage earner on the other hand would pay 9% on his wages and another 9% on what he spends, but only at his discretion. This seems reasonable for him but we don't have as many choices on our expenses.

We all know that when they have money, ranchers and farmers
spend a lot. For one thing, they need products to operate.

And there aren't enough of us (ranchers/farmers) to be heard
if we do raise questions about how we would be affected.




So what are the thoughts out there on this?
Thanks.

 

[BRG]

I don't know how well I like it either, BUT, I do think it is a bold idea and something needs done so EVERYONE pays tax. We have to remember, that this is just an idea and it will have to pass through congress. If he gets in, you can bet that it won't be exactly like he is saying as they have to agree on it. To me, Cain has an idea and it is a better one than just raising taxes on the wealthy like Obama and his cronies would like.

 

[Red Barn Angus]

I really like some of Cain's ideas but I do not like the 9 9 9 deal at all. It just makes it more difficult for the poor and middle class as well as small business owners. With the state sales tax we already have it would be almost 18% added to everything we buy. Can you imagine what that would add to a new truck? Plus all income being taxed at 9% the tax burden for the little people would be unbearable. The only ones getting a deal would be the corporations. It would definately put the tax burden on those least able to pay it. I would not vote for the man just for this reason and I do think he has some very good ideas overall but not this one.

 

[Bullhauler]

The 9 9 9 plan would be far more devastating to farms and ranches then anything the Obama administration has passed or attempted to pass. It sure sounds like something a pizza man would come up with though.


Also seems ironic that the same ilk that opposed a 1% bank transaction fee a few months ago seem to now embrace a 9% sales tax.

 

[flounder]

Warren Buffett Would Most Likely Pay No Income Tax Under Herman Cain's '999' Tax Plan: Analysis

10/17/11 05:02 PM ET Updated: 10/17/11 05:02


Warren Buffett might want to pay more taxes, but if Republican presidential candidate Herman Cain gets elected, Buffett might not pay any taxes at all.

If implemented, Cain's "999" tax plan would eliminate taxes on capital gains, significantly reducing Buffett's tax rate because his ordinary income, outside of capital gains, comes to about $4.9 million. Cain's plan would cap corporate, income and sales tax at 9 percent. According to an analysis prepared for Yahoo's Lookout by the American Institute of Certified Public accountants, the 999 plan would leave Buffett paying around $440,000 in income tax, or 1.1 percent of his approximate $40 million in currently taxable income.

As ThinkProgress notes, after deducting charitable deductions, which Cain plans to preserve in his tax plan, Buffett would likely pay no income taxes at all under 999. While the Berkshire Hathaway CEO hasn't disclosed all of charitable donations, it seems likely they would surpass his taxes.

The prospect of Buffet paying no taxes might shock, especially in the face of his recent commentary. In his August New York Times op-ed, he stated that the $6,938,744 (or 17.4 percent of his taxable income) he paid in taxes last year wasn't enough.

Melissa Labant, the accountant who prepared the analysis for Yahoo, did note some potential flaws in the calculations. However, the rough estimate is pretty accurate, based upon the information Buffett has released, and the scarce details of the plan Cain has touted:

For instance, Buffett may or may not be subject to the alternative minimum tax, and he may or may not have foreign tax credits created by taxes he paid in other countries. We also don't know the exact amount of his charitable giving. Nor do we know whether Cain's plan would exempt all such giving, or make distinctions between different types of contributions, as some tax systems do. This latest revelation is just one of the ways critics have derided the 999 plan as Cain has risen in the polls. Critics have been quick to point out that under this plan, some, especially less affluent Americans, would see a rise in taxes.

Currently, tax cuts for the rich cost Americans about $11.6 million every hour. Under "999" it's possible that that expense could get even larger wealthy, though federal corporate and sales tax percentages set at 9 percent may offset the number to some degree.


The possibility that millionaires and billionaires such as Buffett may pay no income taxes is coming at a time when many Americans are calling for higher taxes on the wealthy. A recent study showed that a quarter of millionaires actually pay less in taxes than some of the middle class.


http://www.huffingtonpost.com/2011/10/17/warren-buffett-no-income-tax-999_n_1016141.html


http://thinkprogress.org/economy/2011/10/17/345663/buffett-nothing-under-999/

 

[hypocritexposer]

The 9 9 9 plan would be far more devastating to farms and ranches then anything the Obama administration has passed or attempted to pass. It sure sounds like something a pizza man would come up with though.


Also seems ironic that the same ilk that opposed a 1% bank transaction fee a few months ago seem to now embrace a 9% sales tax.

Like how the GST has been so devastating for Canadian farms/ranches, right?

 

[Big Muddy rancher]

Well in Canada we pay a graduated income tax. 9% seems a lot better then 30%. We have a 5% provincial sales tax that is supposed to pay for health and education as well as some education money comes off of property. We also have a 5% federal goods and services tax plus capital gains.

Why would the 9% not be on net ranch income?

Would the 9% not be after basic deductions for kids ect?

We replaced a 13% federal tax with a 7% GST which has been lowered to 5%.

 

[Mike]

Everyone will be looking at Cain's plan and trying to figure if it will benefit them personally. :roll:

Bottom line is; if our gov't doesn't stop the borrowing & spending, nothing will work and none of us will be happy..

If implemented, this plan would be real "Change" for a change.

 

[Larrry]

.


Also seems ironic that the same ilk that opposed a 1% bank transaction fee a few months ago seem to now embrace a 9% sales tax.

I am not so sure about the 9 9 9 plan. It seems to have flaws. That being said it is completely different than the 1% transaction fee. The transaction fee is on top of all taxes paid now. I take it that the 9 9 9 would replace the income tax as we know it. So you can't even compare the two taxes.

 

[katrina]

Maybe instead of spending it would be good just to save.. Let the spenders pay the taxes and the savers not so much..... Just kinda turning this thing around.. :wave:

 

[Mike]

Been doing a little studying. The 9% Payroll tax in the 9-9-9 plan will replace Fed W/holding, SS & Medicare taxes. Heck, the SS taxes we pay now are about 15.5%!

Those taxes will be offset by the 9% Sales tax which is on NEW goods. Nothing used.

I'm beginning to think it's a pretty good deal all around.

 

[Steve]

I see two big problems with Cain's 999 plan. I want to like Cain, he's not as much of a politician as the others…but these two issues I've raised on some Cain facebook sites. Not only did they not answer….they deleted the exchanges we had so the rest of the world could not see. Censorship. So…..tell me how I error in my thinking.

Seniors appear to be hit hard. I'm on social security, and pay little to no income taxes. Under Cain's plan I pay 9% flat tax, and then I pay another 9% when I buy something with what is left. Cain has said the elimination of all the taxes in the product stream will lower prices and it will wash. Do you trust any business to pass on the savings? Ever heard of a bird in hand is worth two in the bush. I don't have the faith prices will come don't to offset the 9% sales tax. Then the 9% flat tax in itself is more than I pay now.

Savings. Although I have very little savings falling into this category, take this scenario. You work, save and have after tax dollars in a savings account. All of which was saved before Cain's change to 999. Now, you want to spend the money you have already paid federal tax on…you owe no more to the feds. Yet you spend it, you pay 9% sales tax. Double taxation.

actually seniors would get hit by all three the hardest..

9% on retirement investment income (dividends, annuities ect) , 9% on income, and 9% sales tax..

and I have little faith in DC sticking to anything except raising taxes.. so in reality we would have a new sales tax on top of the other existing taxes.. and it wouldn't be long before that wasn't enough...

 

[hypocritexposer]

I think it was Lonecowboy who mentioned that it is no the President who has thee authority to change the tax system anyway.....but it's nice to seem some ideas being thrown around for a change, instead of "Tax, Tax, Tax"

sort of gets the discussion going

 

[Steve]

I think it was Lonecowboy who mentioned that it is no the President who has thee authority to change the tax system anyway.....but it's nice to seem some ideas being thrown around for a change, instead of "Tax, Tax, Tax"

sort of gets the discussion going

unfortunately we all saw how Obama's "ideas" worked out,.

 

[jcummins]

Been doing a little studying. The 9% Payroll tax in the 9-9-9 plan will replace Fed W/holding, SS & Medicare taxes. Heck, the SS taxes we pay now are about 15.5%!

Those taxes will be offset by the 9% Sales tax which is on NEW goods. Nothing used.

I'm beginning to think it's a pretty good deal all around.

I'm retired....so I don't have fed w/h, SS & Medicare. Being retired I'll have a new to me 9% flat and new to me 9% sales tax, that did not exist for me before. So none of Cain's tax is offset by anything I pay out now and wouldn't under his plan.

 

[hypocritexposer]

Been doing a little studying. The 9% Payroll tax in the 9-9-9 plan will replace Fed W/holding, SS & Medicare taxes. Heck, the SS taxes we pay now are about 15.5%!

Those taxes will be offset by the 9% Sales tax which is on NEW goods. Nothing used.

I'm beginning to think it's a pretty good deal all around.

I'm retired....so I don't have fed w/h, SS & Medicare. Being retired I'll have a new to me 9% flat and new to me 9% sales tax, that did not exist for me before. So none of Cain's tax is offset by anything I pay out now and wouldn't under his plan.

any plan like this has "credits" or exemptions that come with it.

 

[Steve]

Been doing a little studying. The 9% Payroll tax in the 9-9-9 plan will replace Fed W/holding, SS & Medicare taxes. Heck, the SS taxes we pay now are about 15.5%!

Those taxes will be offset by the 9% Sales tax which is on NEW goods. Nothing used.

I'm beginning to think it's a pretty good deal all around.

I'm retired....so I don't have fed w/h, SS & Medicare. Being retired I'll have a new to me 9% flat and new to me 9% sales tax, that did not exist for me before. So none of Cain's tax is offset by anything I pay out now and wouldn't under his plan.

any plan like this has "credits" or exemptions that come with it.

then there would be no point to a flat tax or sales tax if it had exemptions..

in fact there is question about if it would be enough to raise the required revenue as it is currently presented..

I must say, I am not in favor of any new taxes.. in any form.. for some reason they never go down, are never as they were presented, or are anywheres close to achieving what was promised when they are implemented.. :x

 

[jcummins]

Well guess others have issues with 999 as well.

http://www.foxnews.com/politics/2011/10/19/adviser-backs-away-from-cains-sales-tax-plan-as-candidate-endures-barrage/

As others mention....at least it is a plan, that others seem to have nothing. For me it needs more changes, but if nothing else....it has people thinking.

 

[Anonymous]

And now Rick Perry is coming out with a flat tax that Steve Forbes is championing. Romney may out do all of them and stop all taxes. Look at the jobs it would create.