@realjohnboy,
realjohnboy wrote:
Herman Cain's 9-9-9 plan is coming under more than a little scrutiny.
He defended it this morning, saying cryptically that some people would pay more in taxes and most would pay less.
He added:
"Who would pay more (in the sales tax portion)? The people who spend more money on new goods. The sales tax only applies to people who buy new goods, not used goods. That's a big difference."
New goods. Swell, but there goes the auto industry. You suddenly see a 9% increase in the price of a new car, and the old clunker starts looking pretty good. I wonder if the plan would stop the tax giveaway on hybrids and plug in only vehicles.
The plan won't tax dividends and capital gains if I'm recalling correctly. Buffett will laugh all the way to the bank. If all social security becomes taxable at 9% regardless of income, going to the bank won't even be a bad joke anymore.
Wages and salary would not be business deductable expenses. I know for certain that the O & G well servicing business has wages very close to 50% of revenue. Net income becomes a negative number. A big negative number.
Give the plan enough tweaks and modifications to become somewhat workable and it isn't going to have any relationship to a "flat tax."
Cain seems like a real nice guy, and I will probably give him the vote but only because I know this deal isn't going to fly.