zex

And I think they have tax on pizza in New Hampshire anyway...

I'm not sure how asking the wealthy to pay less (18% -> 9%) and the poor to pay more (<1% -> 9%) is a benefit to our society.

And the sales tax portion is pure crap. It will retard spending because it makes everything more expensive. That includes food and clothing, because Cain doesn't see any reason to put in exceptions for such things. He thinks that cutting buisness taxes to 9% would offset that because they would lower their prices, which further demonstrates his total failure of economic reality.

I haven't read anything about the plan that actually makes me think it would work.

I do believe that a reduction of corporate tax will bring more companies back to America, and create more jobs. Most jobs went overseas because of cheap labor and exorbitant corporate tax in America. I think minimizing garbage collecting agencies like the IRS through a simple tax structure will also enable a more efficiently spent tax dollar for the American people. I also think that the sales tax portion makes sense, because we will be capturing contributions to society from the massive population of tax-evading illegals in this country.

Also, on the subject of exceptions, you would have to be naive not to believe that exceptions that are self serving are created. How many stories of extremely rich people and companies have you heard about who pay little to no tax.

Regardless of all that, I do understand your concerns, but the main topic of the post was actually about creating simple and clear law that politicians cannot hide behind and generate what you were referring to as exceptions. I think the potential to create ANY exceptions will eventually end up getting abused and land us exactly back where we are now. As for difference in taxes, whatever happened to all men are created equal?

A flat tax might help. The tax code becomes more and more onerous every year. However, any flat tax needs to include as income those things that the rich think are inherent rights - like corporate owned cars that are really personal cars.

Also, as far as corporate tax is concerned, the incentives to manufacture overseas needs to be removed. When a company like GE pays no tax, something is wrong.

Couple points in no particular order:

1. Many illegal immigrants pay income and social security taxes. While tough to get precise figures, many estimates put it in the billions of dollars of tax revenue. Those immigrants typically have fake W2 information, but the tax deductions are still taken directly out of the paychecks. A sales tax may recoup some money from those that don't already pay, but it's hardly enough to offset the hardship caused by putting sales tax on clothes and food. At least, in my opinion.

2. While on the subject of sales tax, again, the lower 95% put a much greater percentage of their income back into the economy. The top 5% are able to save money and invest it. So a family making 30K may have 40% of their income put right back into sales taxable items while a millionaire might only have 1% of this money being targeted. It's a fundamental regressive element of a sales tax. This becomes even more important when you get to Phase 2 of his plan which is to phase out all corporate and income tax, leaving just a federal sales tax.

3. Creating jobs, and bringing them back into the US is a noble goal. But given that there are record profits across the board, and companies are just refusing to hire new people, I'm not sure how reducing their tax burden further changes the status quo. This is especially true since the 999 plan has the same subsidiary tax loop hole that allows GE to pay no taxes. Net profit is disguised and hidden through a maze of subsidiary companies and offshore holdings. With profits of $0, the company pays no tax. Nothing changed.

4. While on the topic of jobs that are being potentially created, you have to make sure you count off the jobs that will be lost. Tax accountants, lawyers, and IRS agents are just the tip of the iceberg when you come to this sort of plan. Sure, they may be scum sucking vermin, but there will serious reductions in that industry. An industry that is a huge multi-billion dollar industry. Advocates are quick to point that out, but not to discuss the fallout from deconstructing that industry. Definite job losses versus potential job creation, with no way to quantify how much of either.

5. Rich people not paying taxes isn't going to change dramatically. While income will be taxed, capital gains and repatriated profits would not. I may not be able to hide my income offshore or inside capital gains, but I'm pretty sure people making a few million can.

Now don't get me wrong. I certainly think an easier tax code with fewer exceptions and deductions would go a long way to making people pay their fair share. But this 'plan' isn't it.

This is just a mirage. Simple to understand doesn't always mean better. This is one of those cases.

I am going to have to disagree with you on 1 & 3, but understand your points on the others... As for 2 and 5 (and I know plenty of liberals and conservatives alike who will hate this-- see old money) I think that rich people should do their part through a high inheritance tax. There is way too much stagnant money in the United States. If you mean to tell me that inheriting 10 million dollars instead of 50 million dollars from Daddy Warbucks will cripple your family, you are a lazy heir/heiress that plans to float on old money. Having a large inheritance tax would encourage people to go out and make their own money, and even reinvest their smaller portion of inherited money to continue to grow their revenue. The people who don't make it, didn't make it just like their parents DID make it. This, along with a fair tax policy, would provide legitimate incentive to work to earn and accumulate wealth during your lifetime and prevent stagnant money from occurring. As for number 4, I refuse to accept that a problem should be maintained for the sake of fixing it. I won't say anything more about that, because IMHO no matter how you look at that it seems wrong to me.

Do I think that the 999 plan is a silver bullet? No. Do I think that it is a step in the right direction, and that the policy approach has benefits...well I think I just spent enough time defending that so an intrinsic yes.

I can understand why you would debate #1. Obviously, there aren't very good numbers to support it, even if there is general confidence that it is the case.

But #3? Nothing in the plan changes that. They would pay 9% on "gross income less all investments, all purchases from other businesses and all dividends paid to shareholders." By utilizing the same accounting methods that GE uses, all profits are effectively laundered back and forth between subsidiary companies. By the time it all comes rising back to the top, the bottom line is effectively $0 from a tax perspective. The transactions are lost in "purchases from other businesses". And if they get really desperate they can hide huge chunks of money in investments. All of which would reduce profit to effectively nothing, and get them out of paying taxes.

If you see something in 999 or fair tax that changes that, please point it out. I just don't.

As for number 4, you don't maintain it just because. But you don't destroy the industry just because you think you can create more jobs elsewhere. Before you double unemployment in the country, you have to have hard and fast proof that your plan with re-employ those people, plus the ones you originally wanted to target. Right now, it all hope and a prayer that companies would hire more people with a reduced tax burden. All of the evidence indicates that most large companies aren't under significant financial stress. Most of them are sitting on huge sums of money, but are just refusing to open positions anywhere (US or Abroad). I don't see how giving them a tax break changes that scenario. It just lets them sit on MORE money.