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| 13 Oct 2011 01:50 PM |
__________1) 999 Will Raise Taxes On Middle- And Low-Income Americans, By A Lot:
Cain’s tax plan consists of three different 9 percent taxes — one on wage income (investment income is exempt), one on sales of goods and services (including food, housing, and medicine), and one on business income (investments and purchases from other businesses are deductible; wages, however, are not). But most Americans will end up paying all three of those taxes, for a combined tax rate of 27 percent of their income. That’s because middle and low-income Americans get all, or nearly all, of their income from ordinary wages — all of which would be subject to Cain’s 9 percent wage tax — and then they spend all of their income, which means it would be taxed again by the 9 percent sales tax. Finally, the burden of the 9 percent business income tax would be passed on to them as well, either in the form of lower wages — since wages are not deductible — or in the form of higher prices for goods and services. The bottom line is that most Americans will pay all three of Cain’s taxes, making their real federal tax rate 27 percent. Compare that to the current tax code, under which someone in the bottom quintile pays two percent of their income in federal taxes and someone in the middle quintile pays 15 percent. The fact is that pretty much everyone making up to around $100,000 a year would pay more under Cain’s plan than they do now.
_____________2) 999 Will Give The Rich A HUGE Tax Cut:
Because the 999 plan will operate, in practice, as a 9 percent tax on wages, and an 18 percent tax on goods and services, only a fraction of a wealthy household’s income will end up subject to these taxes. That’s because wealthy people get a lot of their income from capital gains — which are exempt from the wage tax — and they don’t spend all of their income, so anything they save won’t be subject to taxes either. Today, someone in the richest 1 percent typically pays about 30 percent of his or her income in federal taxes. Since people at the top of the income ladder make about half of their income from capital gains, and only spend about half of their income in a given year, their tax rate would drop all the way down to 13.5 percent. That’s even lower than what middle-income people pay today.
______________3) 999 Would Cause Massive Deficits, Enormous Amounts Of New Debt:
Despite the Cain campaign’s claims to the contrary, 999 would not raise nearly enough revenue to close the budget deficit. In an earlier analysis that mistakenly assumed his 9 percent business tax would operate like our current corporate income tax, we underestimated how much revenue it would raise. But even accounting for the new specifics, the 999 plan would still only generate around 14 percent of GDP in revenue. That’s even less than we are collecting now, when revenue levels are at historic lows. Even if Cain adopted all of the draconian spending cuts contained in the House Republican Budget, 14 percent of GDP in revenue would still result in $11.5 trillion in added debt from 2013 through 2021. |
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| 13 Oct 2011 01:51 PM |
| So, if you are in the top 1% of earners, the 999 plan means a HUGE tax cut, in many cases more than 50% |
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| 13 Oct 2011 01:53 PM |
I really don't understand why cut taxes for rich and raise taxes for poor.
It's not rich class which builds economy.
It is the middle class. |
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| 13 Oct 2011 06:00 PM |
"I really don't understand why cut taxes for rich and raise taxes for poor.
It's not rich class which builds economy.
It is the middle class."
The most stupidest I have ever heard.
1) No one is proposing tax increases on the poor or the middle class.
2) Who owns the businesses and corporations? I am pretty sure Mr. Westbrook next door doesn't. |
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| 13 Oct 2011 06:01 PM |
| So the rich get richer while the poor can no longer get rich. |
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Warrab
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| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
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| 13 Oct 2011 06:02 PM |
| Cain violates the golden rule of taxation: don't introduce new methods of taxation without getting rid of other ones. |
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Warrab
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| 13 Oct 2011 06:03 PM |
| I'm also not sure if this analysis taxes into account the payroll tax elimination. If it does, it paints a different picture. |
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| 13 Oct 2011 06:03 PM |
@thread
1. Misleading. You fail to account for a post-status quo tax code system now, if you believe in Trickle down things should balance out.
2. And?
3. Yet again you fail to recognize the change in tax code, with the Rich making much more money then they are now due to a loss of Capitial gains t and Inheritance tax and a significant decrease in income tax, they will be making much more money than before so 9% now, is not 9% then.
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| 13 Oct 2011 06:04 PM |
@Thorae
"Cain violates the golden rule of taxation: don't introduce new methods of taxation without getting rid of other ones"
The whole concept of changing the tax code defeats that notion. |
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Warrab
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| 13 Oct 2011 06:07 PM |
| Jon Huntsman's plan throws out the tax code too. Changes the lowest tax rate to 8% |
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| 13 Oct 2011 06:08 PM |
>Taxing wage income
This would put a huge grin on Karl Marx's face. |
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| 13 Oct 2011 06:11 PM |
| No, seriously. It's entrenching the division of the labor and capital classes and putting further economic stress on the former. |
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| 13 Oct 2011 06:14 PM |
| What? An anarchist-communist can't channel the spirit of Marx? |
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Warrab
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| 13 Oct 2011 06:14 PM |
No, seriously. It's entrenching the division of the labor and capital classes and putting further economic stress on the former. ___ Okay, and now we can get back to some REAL issues. |
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| 13 Oct 2011 06:17 PM |
"What? An anarchist-communist can't channel the spirit of Marx?"
No you can. Just that you are going to say that to about 99.9% of economic plans in the world it's not that valid of a criticism. |
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Warrab
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| 13 Oct 2011 06:19 PM |
"What? An anarchist-communist can't channel the spirit of Marx?" ___ NEIN-NEIN-NEIN, as Herman Cain might say. |
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Warrab
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| Joined: 17 Oct 2010 |
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| 13 Oct 2011 06:29 PM |
>Okay, and now we can get back to some REAL issues.
I can use neoclassical critiques too, if you like. Income inequality leads to a decrease in aggregate demand, which puts the economy at further risk of crisis and subsequent collapse. It takes away from the people who spend (The workers,) and gives instead to the people who save (The bosses.)
Income inequality would not be a big deal if income distribution was not as skewed in favor of the capital class as it is now.
http://seekingalpha.com/article/164784-on-income-distribution-and-aggregate-demand-in-the-u-s
It also immiserates the working class, but that's more of a Marxian critique. |
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Warrab
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| 13 Oct 2011 07:00 PM |
| Do I really have to lecture you on irrelevant Mercantilist ideas again? |
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| 13 Oct 2011 08:00 PM |
| It's not a mercentalist idea, it's one that is accepted by all mainstream economists. I'm not implying that the money supply is finite, or that participation in the economy is a zero-sum game, but that real wages (the amount of commodities exchangeable for wages) have decreased, meaning the purchasing power of the lower and middle classes have decreased in proportion. |
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