I decided to refute Cains 9-9-9 plan considering he is apparently now a rising star. Mr Cain has been screaming about 9-9-9 for quite some time , but is it really going to do what he says it does. First let's see the logic behind it. Cain would reduce the Corporate tax rate from 50% to 9%. That's a 41% decrease mostly for multinationals who don't even pay the 50%, because of loopholes, but it will reduce revenue from the Business section. Then he will create a flat Income tax. Meaning everyone pays the same tax no matter how rich or how poor. The income tax bracket is 9%. Biggest winners here will be the Rich who only pay 35% will now get a 26% decrease in taxes while the poor who pay 15% will have a 6%. That sounds fair right! So how will he pay for the loads of cash he is giving to already extremely profitable business, and reduce the tax rates of the rich to the lowest it has ever been. Well Cain suggest a G.S.T will do the fix. A 9% G.S.T! So who will that hurt. Well people who buy things! Consumers the one's that drive the economy. The G.S.T tends to attacks the poor and middle class. The economic policy means. That the middle class pay more in taxes while the rich pay less. So the consumers have less money and the poor have more. Yep that will fix the inequality in pay. The top 500 earners in the U.S make more money then the bottom 50%.Think of it even though the income tax is being reduced the G.S.T is being created and taking any money the middle class would get and take even more. The Rich would pay much less in taxes and the G.S.T would only take some profits away. Cain even admitted that the 9-9-9 plan would make difficulties for people.
"Some people will pay more. But most people will pay less,"
he has that a bit backwards. The top 10% will pay less while the bottom 90% will pay more. The sad part about it is, because of all the money this plan will give to the rich. this plan will actually reduce revenue by 200 billion. How is that going to solve the deficit. How is not taxing the rich going to help reduce the deficit? How is taxing consumers and increasing the deficit going to solve the problem in America.
"We do not inherit the earth from our ancestors, we borrow it from our children." A Liberal-supporting, environmentalist blog. We blog according to our opinions, not those of the party or government. Free speech must win and that's why we have this blog. The views of two Montrealers and a Libertarian.
Monday, October 17, 2011
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He will close all loopholes, so the rich and corporations will pay more tax.
ReplyDeleteEnd corporate bailouts (like GM).
A lot of other taxes get abolished, so the 9% GST will be a tax on a lower priced good.
Same thing happened in Canada, the manufacturing sales tax was abolished, the price of cars went down after the GST.
Remember the Liberals in Canada promised to abolish the GST, for the reasons YOU stated above......Chretien kept it, he must like Herman Cain.
When Harper lowered it, Liberals under Dion criticized Harper for lowering it.
This sort of trickle down economics doesn't make sense. you say prices will go down But many major companies like General motors haven't been paying anything in corporate tax, so if Herman cain makes them pay prices won't go down they will stay where they are. Even let's say they do go down the GST will still make the poor and the middle class pay more. Because the corporate tax cuts first don't guarantee that prices will go down that quickly. they only reduce prices over long term tax cuts that are stable, and this tax code isn't stable considering it won't generate enough revenue to balance the budget. Second a 9% sales tax will take more money from the poor and the middle class then the money companies will give up to reduce prices. And third even if all of what you say is true and people pay less then they usually would. The revenue brought in will be 200 billion dollars short of this years revenue. meaning the deficit will increase. Which means the goverment is going to either cut more or increase the G.S.T again.
ReplyDeleteI don't disagree with the cutting the corporate tax it does reduce prices over the long run of course. But reducing the Corporate tax on the backs of the poor to pay more or pay the exact same so big companies will get more profits isn't a good solution. If the deficit situation get's worse that means higher taxes later.
The U.S does need a national sales tax, but they should not squander it away on reducing taxes on companies. They should use it to eliminate the deficit.