Cain's tax plan

[magooch]

I don't know about the rest of you, but the 999 plan sucks as far as I can determine.  It would raise my taxes by at least 150 percent.  The first rule in changing the tax scheme is do no harm.  Raising my taxes equals harm in my book.

[JustaShooter]

I said something similar in another post - I estimated 80% of Americans would pay higher taxes under his plan, from the lowest income all the way up through the middle class, the upper middle would not see much difference, and only top earners would see a reduction.  As it turns out, I was a bit off - the Tax Policy Center puts it at 84% of Americans that would pay higher taxes under Cain's 999 plan.  Like I said, I can't afford the additional taxes I'd have to pay so unless his plan gets modified, I won't be voting for Cain.

Just a Shooter

[Doublebass73]

I don't know about the rest of you, but the 999 plan sucks as far as I can determine.  It would raise my taxes by at least 150 percent.  The first rule in changing the tax scheme is do no harm.  Raising my taxes equals harm in my book.

X2

I did the math and it will cost more for me also. I will not be voting for Mr. Cain.

[Graybeard]

I can't afford Cain. I'd as soon have what we got now as him.

[Ranch13]

I don't know about the rest of you, but the 999 plan sucks as far as I can determine.  It would raise my taxes by at least 150 percent.  The first rule in changing the tax scheme is do no harm.  Raising my taxes equals harm in my book.

That's interesting. 150% increase? you must not be paying any now. Are you getting earned income tax credits, and child credits and all the other stuff that you get a return but pay no tax?

[mirage1988]

I don't know about the rest of you, but the 999 plan sucks as far as I can determine.  It would raise my taxes by at least 150 percent.  The first rule in changing the tax scheme is do no harm.  Raising my taxes equals harm in my book.

Where do you live? In minnesota we pay roughly 33% state and federal plus 6.5% sales tax on goods. That means I would pay approx 10 percent less with 9-9-9. What about the 40 cents per gallon gas tax, does that get eliminated in cains plan?

[Matt]

Just for the record there is another 9 that is not discussed


9% Personal Income Tax
9% National Sales Tax
9% Payroll Tax
9% Corporate Tax
so those of you who figured on the 999 plan go back and re-figure under the real 9999 plan and keep in mind those first three 9's are what We The People Pay.


Matt

[Ranch13]

Just for the record there is another 9 that is not discussed


9% Personal Income Tax
9% National Sales Tax
9% Payroll Tax
9% Corporate Tax
so those of you who figured on the 999 plan go back and re-figure under the real 9999 plan and keep in mind those first three 9's are what We The People Pay.


Matt

Just exactly where did you come up with the extra 9 from. It's not listed in the plan that Cain has on his website.

[Ranch13]

[]
.
Yes, we 'talked' about this tax business a couple of months ago. 9-9-9 is another 'tax shift' policy. The FED must love this guy Cain...Of course, he's a former FED exec.  Apparently, the plan is borrowed from Sym City...a popular video game... .  People who are concerned about National Debt should think about getting the people who caused the debt to fix it...that would indicate a Tobin Tax for them.
 
..TM7

Talking about this plan a couple of months ago before anyone had seen it , most all that would of been said is of little to no use in an informed discussion.
By the people who "created" this debt, would you include the folks that get back more money from the IRS than they paid in? What about all the people that bought houses that were well beyond their means to ever make the payment on, or credit card debt they couldn't pay, and then the fed bailed in a cleared the books for those people?

[magooch]

I don't know about the rest of you, but the 999 plan sucks as far as I can determine.  It would raise my taxes by at least 150 percent.  The first rule in changing the tax scheme is do no harm.  Raising my taxes equals harm in my book.

That's interesting. 150% increase? you must not be paying any now. Are you getting earned income tax credits, and child credits and all the other stuff that you get a return but pay no tax?

Well, Ranch, I'm a retired guy living on a nice pension, Social Security and investments.  We do very well, but even when I was working under the Bush tax cuts, my income tax amounted to just about 7 percent of my gross.  Of course it was reduced because of 401 K and IRA contributions.  Being retired and over a certain age, there are tax deductions etc. and combined with the Social Security formula, our taxes last year came to right at 5 percent of our gross.
 
I live in a state that has no state income tax, but that has nothing to do with federal income tax anyway.  I have always done my own taxes (50 years worth), so I'm well aware of the percentages that I have paid.  Even when Clinton was President, our tax rate in terms of percent of our gross was only around 10 percent.
 
Cain's plan is simplistic at best and does not take into account what presently obtains--especially in regard to retirees

[Ranch13]

I don't know about the rest of you, but the 999 plan sucks as far as I can determine.  It would raise my taxes by at least 150 percent.  The first rule in changing the tax scheme is do no harm.  Raising my taxes equals harm in my book.

That's interesting. 150% increase? you must not be paying any now. Are you getting earned income tax credits, and child credits and all the other stuff that you get a return but pay no tax?

Well, Ranch, I'm a retired guy living on a nice pension, Social Security and investments.  We do very well, but even when I was working under the Bush tax cuts, my income tax amounted to just about 7 percent of my gross.  Of course it was reduced because of 401 K and IRA contributions.  Being retired and over a certain age, there are tax deductions etc. and combined with the Social Security formula, our taxes last year came to right at 5 percent of our gross.
 
I live in a state that has no state income tax, but that has nothing to do with federal income tax anyway.  I have always done my own taxes (50 years worth), so I'm well aware of the percentages that I have paid.  Even when Clinton was President, our tax rate in terms of percent of our gross was only around 10 percent.
 
Cain's plan is simplistic at best and does not take into account what presently obtains--especially in regard to retirees

Well if you had of read Cains plan or heard him being questioned on it, you would know there is no tax on your social security , or dividends or interest income, and it does away with the capitol gains tax.As he so rightfully states, you have already paid taxes on that money.
 So assuming it goes thru the congress like he wants and all the other tax laws are done away with , then your tax liability goes to ZERO. So you may just want to slip over to his website and read the plan....

[Ranch13]

[]
.
Yes, we 'talked' about this tax business a couple of months ago. 9-9-9 is another 'tax shift' policy. The FED must love this guy Cain...Of course, he's a former FED exec.  Apparently, the plan is borrowed from Sym City...a popular video game... .  People who are concerned about National Debt should think about getting the people who caused the debt to fix it...that would indicate a Tobin Tax for them.
 
..TM7

Talking about this plan a couple of months ago before anyone had seen it , most all that would of been said is of little to no use in an informed discussion.
By the people who "created" this debt, would you include the folks that get back more money from the IRS than they paid in? What about all the people that bought houses that were well beyond their means to ever make the payment on, or credit card debt they couldn't pay, and then the fed bailed in a cleared the books for those people?

.
First, you're a wee bit off....What I wrote was: "Yes, we 'talked' about this tax business a couple of months ago. 9-9-9 is another 'tax shift' policy......  justashooter and I were discussing 'tax business' a while back (btw, curiously it seems he has changed his opinionon tax shifts when this 9-9-9 plan came out) Then I said the 9-9-9 is another 'tax shift' policy.....i.e more tax business shifting taxes to the middle class. So, nobody knew about Cain's 9-9-9 plan unless they were playing Sym City...
 
Secondly, I'm talking about national debt..that's created by the MIC coteri and Wall St for the FED Corporation...debt predation on stupid homeowners is another issue caused by Debt Merchants on Wall St.  Always remember rule #1 of the banker: Debt is the mountain that never goes away!
 
..TM7
.

TM7 national debt is more than just the bailout money Obama and crew handed to his donors and the unions. National debt is the money the government spends that it does not have, and that includes things like child tax credits to people who don't pay taxes, yet get returns in excess of 4 thousand dollars, it includes all the money spent on welfare spending such as unemployement benefits that never run out, it includes food stamps and free school lunches, the list can go on and on.It also includes the bailout to GM and Chrysler, where they took the stock holders shares and handed them over to the unions.....
 As far as debt predation on borrowers.. BULLSPIT, if those people weren't smart enough to know they couldn't make the payments then to stinkin bad... Somewhere along the line there needs to be some personal accountability. Besides all that most of this so called "predatory" lending was set up and force on the banks by the government itself.

[Ranch13]

Get ignorant all you care to TM7, but it still won't change the fact that people bought homes they could not afford to make the payments on with no down payment, and then bought new cars, stereos, computers and all the other happy horsespit, and then found out that folks that loan money out want that money paid back. Shocking concept... paying back money you borrow.....
And they did not go out and drag those folks into banks etc, hold a gun to their head, dope them up and make them sign the papers....
 Personal responsibility,,,, Try it you might like it....

[Ranch13]

Banks don't foreclose if you make your payments. End of story.
Now you can use all the theory you want about what got this country into this mess, but that's just so much wasted time.. What needs to happen now is go about the business of getting the mess straightened up.
 Herman Cains 999 plan looks to me like a good place to start.
 
 
 

[NWBear]

Ranch/TM7
 
Just a question/comment, lets assume BOTH the lenders and borowers knew what they were doing.  In most real estate transactions the LOAN is secured by the PROPERTY - not the persons credit rating (although that is considered).  When the economy went south and people had trouble paying their mortgage the home owners did not get any breaks -know anyone who had a mortgage adjusted???  I sure don't, though several tried.  The only recourse is to pay the mortgage or get foreclosed.  THAT HAS BEEN THE RULE FOR THE 30 YEARS I HAVE STUDIED REAL ESTATE.  A side note, the ONLY RECOURSE most lenders have on an ORIGINAL mortgage is to take back the property.  They can not get a judgement for an deficiency - the lenders know this.
The real mess is the deregulation of the "financial industry" which is way beyond this forum to discuss - way to much information to go over.  This led to mortgages being bundled a "financial instruments", people buying these were not thinking of taking back Real Estate and once the assets turned bad the "Too Big to Fail" kicked in and here we are.
 
Bottom line the Financial wheeler dealers got bailed out and most homeowners who were foreclosed just got a bad credit rating.  I am against the first not necessarily the last, but one without the other .... how was that equitable?
 
NWB

[Gary G]

Google Peter Schiff and 999 and he will explain that there is a hidden fourth nine.


One thing that we should consider about 999 is that it opens the door for a national sales tax (something that they have never been able to do.) How long will the nines stay nines?


Consider this: when the income tax was established, some congressional members wanted a clause that would limit future congresses to a maximum of ten percent. It was voted down by the majority that thought such language might lead to a ten percent income tax.

[NWBear]

Ranch,
 
I guess I never knew of any INDIVIDUALS who got bailout money or unusual release from debts (and I think that is some of what people are mad about).
 
I am very much in favor of a simplified Tax Code.  I would favor a flat tax above a certain income, say the median income of $50,000.  I could be convinced of a National sales tax, although this is VERY regressive - but if exempt from first $50K of income tax, possible.  A flat corporate tax is what we have now - but it is riddled with loop holes.  So a TRUE flat corp tax would be great.   For me and my wife, the 999 would be substantial net increase in taxes assuming all other taxes remained the same.  I would not expect the corps to reduce prices by their tax reduction (if any).  I would say my revised tax bill would be 9% income tax and about 4.5% sales tax (50% of income spent on taxable items) for a combined 13.5% tax rate; that is more than we pay now (in the past it would have been a large tax break).  Again this excludes local taxes, sales taxes car fees etc. which I expect to remain constant in this exercise.
 
Good question, thanks

[NWBear]

TM7/Ranch
 
I don't really disagree with either of you.  The devil is in the details.  I agree with what you said about the mortgage mess, I would only change the bailouts to NONE.  You bought a home you can't afford now - job loss or - I empathize and that is why you get a fresh start after foreclosure.  You made RE loans that can't be repaid, foreclose....  I said we HAVE a flat Corp. tax just filled with loopholes so flat?  Of course flat income tax is regressive so exempt 50% of taxpayers, make it flat or 2-3 step above $50k year.  Those under $50k a year have "skin in the game" via National Sales Tax (and all the other taxes they pay hidden or otherwise).   Basically I like all "simplification" efforts, complexity is always designed to hide something or benefit someone; IMHO.  Again the 999, as is, hurts people like me who have a lower income (somewhat by choice) - so I am not for it as it sits today.

[magooch]

I don't know about the rest of you, but the 999 plan sucks as far as I can determine.  It would raise my taxes by at least 150 percent.  The first rule in changing the tax scheme is do no harm.  Raising my taxes equals harm in my book.

That's interesting. 150% increase? you must not be paying any now. Are you getting earned income tax credits, and child credits and all the other stuff that you get a return but pay no tax?

Well, Ranch, I'm a retired guy living on a nice pension, Social Security and investments.  We do very well, but even when I was working under the Bush tax cuts, my income tax amounted to just about 7 percent of my gross.  Of course it was reduced because of 401 K and IRA contributions.  Being retired and over a certain age, there are tax deductions etc. and combined with the Social Security formula, our taxes last year came to right at 5 percent of our gross.
 
I live in a state that has no state income tax, but that has nothing to do with federal income tax anyway.  I have always done my own taxes (50 years worth), so I'm well aware of the percentages that I have paid.  Even when Clinton was President, our tax rate in terms of percent of our gross was only around 10 percent.
 
Cain's plan is simplistic at best and does not take into account what presently obtains--especially in regard to retirees

Well if you had of read Cains plan or heard him being questioned on it, you would know there is no tax on your social security , or dividends or interest income, and it does away with the capitol gains tax.As he so rightfully states, you have already paid taxes on that money.
 So assuming it goes thru the congress like he wants and all the other tax laws are done away with , then your tax liability goes to ZERO. So you may just want to slip over to his website and read the plan....

I've been there and done that before and I just did it again (read the plan).  I saw nothing that said taxes would be removed from Social Security benefits.  Removing dividend and capital gains taxes would not do a thing for folks who are taking disbursements from IRA's.  And there certainly is nothing there that in any way shape, or form that would indicate that my taxes would go to zero.  If it were so, I might have a sudden epiphany and get on board with Herman.
 
Nice try, but unless you are reading something other than what is posted on Cain's website, I don't know where you got it.  On the other hand, I have listened intently to Mr. Cain being interviewed and questioned about his plan and frankly, he does a very poor job of explaining it.
 
I'm really not all that persuaded that the 999 plan has much of a chance in any case--especially in its present form.  Other than that, I think Mr. Cain beats the crap out of what we are stuck with right now and I believe Herm would make a pretty good VP for Michele Bachman.

[magooch]

The people that lost their homes due to job loss etc weren't at fault, altho there were a number of folks that used the government bailout for homeowners and credit card debt to get away from having to make those large payments...
 But all that crap is neither here nor there, and liberal goons like TM7 use that type of arquement all to frequently to derail discussions on other topics.
 So Bear my question to you is , how do you think Cains 999 plan will affect you?

.
NW Bear:  what conservative pawns and spear carriers like Ranch are trying to say is the mortgage industry made loans to ignorant uninformed people knowingly they would default, but didn't care and bunbdled these products into toxic financials and auctioned them off to other ignrorant sobs. This is Ok in his book apparently. The fact that the govwernent bailed bailed out these lenders (banks and financial corps) instead of directly assisting the defaultersers is immaterial.  Later the corps auctioned off the foreclosed props and realized writable losses along with the bailouts. The homeowner took a loos compounded by the fac that the differnce in the property value and mortgage was taxable income...This he calls capitalism and caveat emptor, but was the governmnets fault.  The same people that gamed this system received boni and still working in the same jobs..
 
Cains plan is a huge tax shift to the middle class, break for corps and elites, and as regressive as can be. It will also necessitate huge increases in state and local taxes.  The total US tax burden is already flat. The % corp tax to GDP in the USA is the lowest in the world.  The % corp tax revenue to total tax revenue is about lowest in world and less than ever.
 
 
..TM7

I may have missed it, but I don't think there has been adequate mention of the part that FANNY MAE and FREDDIE MAC played in the whole debacle.  It has also been reported that political pressure was applied to lenders in the form of possible law suits, etc. if they failed to liberalize their loaning practices.  With that in place, I believe lenders opened the doors to easy qualification and allowed loans they might normally not and then with the intention of pawning off the worst of he loans to the two above named agencies.  Why not, they were able to pocket the fees etc. with none of the gamble.

[NWBear]

Magooch, you bring up a good point about Fannie Mae and Freddie Mac.  However they are secondary market financial institutions, meaning they buy loans already made.  They were mandated politically Under Bush I, Clinton and to some degree Bush II to increase lending to lower income and distressed areas.  However I think it really went sideways when investment bankers started packaging loans as Mortgage Backed Securites, the same as Fannie and Freddie but with far less restrictions.  Fannie and Freddie are already quasi govt. agencies but the investment houses, which were too big to fail, were the ones who really fueled the poor lending practices by loan originators followed by offloading to MBS's and then investers -outside the Federal Secondary market.

[mcwoodduck]

Just for the record there is another 9 that is not discussed


9% Personal Income Tax
9% National Sales Tax
9% Payroll Tax
9% Corporate Tax
so those of you who figured on the 999 plan go back and re-figure under the real 9999 plan and keep in mind those first three 9's are what We The People Pay.


Matt

The 9% corperate tax is going to lower prices.  As of right now pricing is built in at the highest marginal rate so 34%.  Adding a 9% sales tax is going to keep prices the same or lower them.
If you are paying $100 for something after the 9999 plan is in effect it may be $86.  and with the tax 93.74.  Lower.  Also you would have any state tax added on the cost of the good not on the taxed cost of the good.
 
 
The problem I see with his plan is the ability to raise the 9 to 30% and you know liberals and wealth distrubitors will want to.
The plan would only work if part of the law was tied to the deficit.  If the deficit goes up the rate goes down and vise versa automaticly.  For every 1% of deficit spending goes up the rates fall by 1/2 a percent.  Would limit future Presidents from crazy Obama like spending.
For the first and Third 9 I would like to see a standard deduction based on the poverty level.  If the family of 4 has a poverty level of 10,000 you deduct 3 times the poverty level for you situation and pay taxes on everything above that.   You pay taxes on what you buy, I think like most states food and clothes should be excluded from the sales tax.
We would aslo have to end all other taxes like the telephone tax that fubnded the Spanish American war in 1898, the fuel taxes, and the thousands of other Sin taxes we have on guns, tabaco, booze, cars, trucks, and the like.

[briarpatch]

Trying to figure the Cain 999 tax thing out I found this. Dont know if it is right or wrong, good or bad. Just more info.




http://999calculator.net/
 

[NWBear]

The only problem with expecting prices to go down if tax rates go down is that PRICE HAS NOTHING TO DO WITH COST!
Price is determined by the Marketplace.
Cost is what it takes to produce a good or service - raw material, labor, overhead, taxes etc.
Profit is the difference between the two. 
In a perfect world:
Inefficient companies lose money and hopefully go under.
Efficient companies make money and thrive.
No one reduces price because costs went down.  They only reduce price for other reasons; gain market share, force competitors out, strengthen their brand name etc. 
If you don't believe me ask yourself why a soda sells for $1.50-$2.00 at a fast food place, but really costs them about $0.05. Same reason 7-11 sells a 64OZ soda for $0.99.  Why do gas companies charge $3.75+ for a gallon of gas - same reason a dog licks his B@!!s because they can.

[Ranch13]

The tax deferment on IRA's catches up with you when you draw out now at the tune of 25%. Cain clearly said his plan stops that , because people have already paid the taxes on that money.
 999 also eliminates the other hidden taxes like the federal excise tax, ever looked at what a set of tires costs? 11.5 % gets tagged onto everyfirearm manufactured and sold. Next time you fill up your gas tank look at the sticker showing the 18cents per gallon federal tax, never mind the mineral severence tax the oil people pay when they extract the crude... All those taxes go away under 999.
The common mantra is "well there's nothing to stop it from becoming 30%" , and to a point thats true, but then again there's nothing saying they can't jump the taxes to 50% and do away with the deductions now.....
One thing about it with the 999 plan it gets everybody (except those on social security etc) with a little skin in the game, and once everybody has to pay a little tax then maybe folks will start thinking harder about what congress is doing with that tax money....
 NWBear I have a niece who's job it is to look at the federally backed loan write downs and approove them or not.... IT happens and happens enough the government hires people to approove them or not..

[NWBear]

Trying to figure the Cain 999 tax thing out I found this. Dont know if it is right or wrong, good or bad. Just more info.




http://999calculator.net/
 

I love those calculators.  Unfortunately this one figures tax based on the resale price, which is good for sales tax which is based on resale price.  Corporate tax however is based on pre-tax profits (EBT).  The SP500 EBT average is less than 20% so lets use 20%.  On a sale of $100 the accumulated profit (taxable) is $100 X 20% or $20.  Lets use a corporate tax of 40% that means the corporate tax is $20 X 40% or $8.00.  Now lets figure the tax at 9%, $20 X 9% is $1.80.  So the corp saves $6.20 - lets be very generous and say they reduce the price by $6.20 (they won't, trust me).  This makes your new price $93.80, which is taxed at 9% for a new price of $102.24.  Math always works you just need to put in the right variables.


All this goes out the window if Cains plan is to tax corps at 9% of revenue. Lets see 20% EBT X 40% Corp tax rate = 8% tax on revenue assuming 20% EBT which most corps don't achieve.  Other wise a huge loss of revenue made up by an increase in the taxes you pay when you buy goods.  H'mmmm

[mcwoodduck]

The only problem with expecting prices to go down if tax rates go down is that PRICE HAS NOTHING TO DO WITH COST!
Price is determined by the Marketplace.
Cost is what it takes to produce a good or service - raw material, labor, overhead, taxes etc.
Profit is the difference between the two. 
In a perfect world:
Inefficient companies lose money and hopefully go under.
Efficient companies make money and thrive.
No one reduces price because costs went down.  They only reduce price for other reasons; gain market share, force competitors out, strengthen their brand name etc. 
If you don't believe me ask yourself why a soda sells for $1.50-$2.00 at a fast food place, but really costs them about $0.05. Same reason 7-11 sells a 64OZ soda for $0.99.  Why do gas companies charge $3.75+ for a gallon of gas - same reason a dog licks his B@!!s because they can.

While this is basically true that costs and price are not relavant as the first law of economics state the price is what people are willing and able to pay.  But the added profits will get other people into the market driving prices down.  After all there are multiple options  to buying a soda at a store.  If the fast food places found that you ware only willing to pay $.80 for a large soda, the price will head to 80.   The company is going to charge what puts them on the supply demand curve  where they can provide that number of goods.
The price of gas as I have stated many times is artifically inflated due to multiple layers of taxes, and the limited refining capabilities.  Not to mention the in ablility to drill for oil and have cheaper resources.  After all the taxes in a gallon of gas are three or four times the profit ofhte entire chain of production.

[Ranch13]

One of the things I really found interesting in Cains plan is that there is no tax on products exported for sale, but taxes the imports the 9%, that should help companies expand exports, and maybe brings some good production jobs back into the country.

[magooch]

I think it would entail some renegotiation of trade agreements.  That nine percent import tax would be perceived as a tariff.