Cain’s 9-9-9 Plan

Hermain Cain is gaining ground, in part because of his vigorously touted “9-9-9 Plan”. What’s that?

Cain’s plan replaces the current income tax, Social Security/Medicare tax, and estate tax with three taxes:

  • A 9% flat rate income tax on all wage earners, with no deductions. At present, nearly half of Americans who file tax returns pay no income tax; this has increased substantially during the Great Recession, because many filers are out of work or underemployed. Cain would change that . . . not their employment situation, but their paying of 9% of their meager incomes in taxes.

    Result: Under this regressive scheme, poor and many middle-income Americans would pay more, while higher income earners would pay less.

  • A 9% national sales tax. What’s that? You live in New York State and already pay an 8% sales tax? Well, that just jumped to 17% under Cain’s plan.

    Result: Under this even more regressive scheme, poor and middle-income Americans would pay more. The less you earn, the more of your income you spend, so this tax would disproportionately affect those earning lower incomes. States with high sales tax rates already deal with black market dealing of certain goods — like cigarettes — to avoid taxes. Adding another 9% sales tax to new goods would serve to reduce consumer spending and increase black marketeering.

  • A 9% corporate tax. While the current corporate tax rate stands about 40%, the World Bank estimates that corporations on average — after deductions — pay about 27.6%. Some famously pay not a single dime. However, Cain would tax income “after expenditures and dividends”. Dividends, Mr. Cain, are (net) profits distributed to investors. They’re not an expenditure.

    Result: This pro-business move would likely serve to reduce income taxes on corporations, though it could have mixed results depending on how it is implemented.

An analysis of the 9-9-9 Plan provided by the Washington Times suggested the 9-9-9 Plan would raise about $1.8 trillion in revenue, or $360B less than the current system raises.

Note: The Washington Times piece assumes no change in consumer spending, which accounts for $380B of the $1.8T total.

Want more detail? Cain provides an overview of his 9-9-9 Plan here, and full details here (pdf). PolitiFact checks out the 9-9-9 Plan HERE.

3 Responses to Cain’s 9-9-9 Plan

  1. Or the government could just get its spending under control.

    • Sure Jake…why don't you try prodding the right wing to end the corporate welfare, the tax cuts to the rich and the wars. Because that accounts for the vast majority of the current deficit. Curious isn't it that the right wing wasn't at all interested in "getting spending under control" when they were the ones in charge….

  2. Or the congress could just get its members under the people's control instead of under the multi-national corporate control that currently persists.

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