Poll Insider put on his thinking cap, and gives us a few more reasons to jump on the Cain train and support the 9-9-9 tax plan.
First, what I like about 9-9-9 (Hahahaha, get it?) Seriously, I like most of what everyone else says they also like about 9-9-9. It’s fair, transparent, opposes class warfare, and can do a lot to end cronyism. The 9% income tax portion dramatically reduces taxes for actual taxpayers. Figure that Social Security and Medicare taxes alone almost amount to that and you’ve almost wiped out the income tax portion altogether with 9-9-9.
On the corporate side I like that it eliminates loopholes so big government Obama-loving corporate bastards like GE might actually pay more in taxes than I did this year. Theoretically, it ends much of the cronyism problem apparent in the current Obama administration.
Finally, and this is where everyone flips out, is the final “9″: The implementation of a 9% sales tax. The problem, critics say, isn’t the 9% tax itself, but the fact that once liberals get in charge they will turn that into 45 billion %. Will they? First things first.
Personally, I prefer a National Sales Tax over a flat tax (or the current tax system) any day of the week (and the NST is the end-game plan with 9-9-9). And here are my main 2 reasons why:
1) Can cause massive individual debt reduction: Since you are not taxed on production, you have more money at the start of the day. You only get taxed when you spend. People who are desperately trying to get out of debt, a big issue in the times we are in, are hampered by over-burdensome income taxation. People would be much more able to quickly pay down their personal debts and begin to build wealth. So while they might not pay much into sales taxes, they will be financially more stable in years to come, which will lead to much more taxes paid (with economic activity) in the future. And fear not, there are plenty of wealthy people who will still by wealthy things, and plenty of irresponsible people who will still rack up their credit cards. So, the government will go on.
2) Broadens the taxpayer base and reduces out-of-pocket pay by Americans: A consumption tax picks up an astonishing number of new taxpayers. First you nail those who work under the table or those who are in the country illegally and off the books. Next, add in the tens of millions of foreign travelers who are used to paying 30% sales taxes in their own countries anyway, so what is 9% to them? In a country where so few pay into the income tax system, we now have a system that would capture those who avoid taxes by illegal means as well as money of foreign visitors. The tax burden is now shifted from a small number of people to a very large number of people, with hard-working Americans benefiting the most.
Read the whole thing, he also addresses the biggest complaint about the plan – the whole “The Democrats and RINOs will just turn around and raise the rates.” (Hint: They can already raise tax rates.)
Personally, I like point number 2 above. Mr. LC runs a small home remodeling business. His biggest competitive threat doesn’t come from larger businesses – his prices are competitive and his work product is the best there is – it comes from the guys who work for cash and pass the tax “savings” along to customers. Cain’s plan would eventually phase out the first two 9’s, so those guys won’t avoid paying their “fair share” for very long.
Also be sure to check out Stacy’s latest post on the Cain campaign. He’s been following it since Day 1 and knows the ins and outs better than I do.
Update: Larry Kudlow also has praise for Cain’s tax plan. He says he doesn’t agree with everything in it, but that we shouldn’t let the perfect be the enemy of the good, and there’s a lot of “good” in this plan.
I’m still a flat-tax guy, and I can’t vouch for these numbers. But I can vouch for the proposition that greater marginal incentives will drive economic growth into high gear. I know there are many skeptics on this. But as always, I point to the Harding-Coolidge-Mellon tax cuts of the 1920s, the John F. Kennedy tax cuts of the 1960s and the Ronald Reagan tax cuts of the 1980s.
Remember, too, that the Cain tax plan would eliminate the double-tax on saving and investment by removing capital gains, estates and dividends from the tax code. All this would throw off strong economic incentives.
Given the current economic malaise, which in large part can be traced to the weakened balance sheets and net worths of families suffering from the multi-year slump in stock prices and home values, increasing returns to saving and investment through a much lower marginal tax rate will boost asset values. Just what the doctor ordered.
As for businesses, not only would they get a globally super-competitive 9 percent tax rate, but they’d receive 100 percent expensing for new purchases of capital equipment. (Read More)
Update: Linked at Pages Left Unturned in a post asking some valid questions that hopefully will be addressed by the Cain campaign in the coming days and weeks.