Tax Related 999 tax plan from Herman Cain

[kpangelinan]

Has Cain laid out the details anywhere?

Repeatedly Cain states his 999 plan will save you more than 6% because it will eliminate the 15.3% payroll tax. The way I see it really it only "saves" the employee 7.65% concerning the payroll tax portion and the employer would save the other 7.65%.

Is this a sales pitch, does he think the employers will pay the 7.65% saved to the employee, or does he really not understand that only 1/2 of the 15.3% is paid by the employee?

Or am I just incorrect in my thinking?

I think his statements are blanket statements, but like you, when he says 15.3 - 9 = 6.3 savings, you're right, employees don't pay that......in his defense, self employed individuals would save and like you said, it's possible (highly unlikely) that the employer would factor that into salary.....I know as an employer myself, I factor in payroll taxes as well as workers comp, FUTA, SUTA, etc. when hiring and determining a wage.

You're thoughts are correct. Maybe a sales pitch as it sounds great!

[WhiteOleander]

Has he accounted for the massive EIC refunds some people get even after paying no tax? Those folks will not be happy.

[Jiggers]

Has he also factored in the state/local sales tax rates into his 9% National Sales Tax?

If he just keeps the same non-food items taxable, the combined rate in my area would 17.25%.

And corporations? 9%. Many corporations do not make a profit for whatever reasons. They will have to pay 9% of their gross less certain deductions. Where will the money come from? Increased prices.

Good talking points, but in reality, it won't fly. Unfortunately, "good talking points" is what gets you elected.

[David1980]

Has he accounted for the massive EIC refunds some people get even after paying no tax? Those folks will not be happy.

I don't think he's expecting the vote from those folks.

[kpangelinan]

Has he accounted for the massive EIC refunds some people get even after paying no tax? Those folks will not be happy.

Nope.....but this was part of the overall plan, "to broaden the base of taxpayers"...make it a little more fair, so to speak....a slight move away from socialism and the Robin Hood effect.

Has he also factored in the state/local sales tax rates into his 9% National Sales Tax?

If he just keeps the same non-food items taxable, the combined rate in my area would 17.25%.

And corporations? 9%. Many corporations do not make a profit for whatever reasons. They will have to pay 9% of their gross less certain deductions. Where will the money come from? Increased prices.

Good talking points, but in reality, it won't fly. Unfortunately, "good talking points" is what gets you elected.

YUP.....it's the simplicity of his plan (and his talking points as you put it) that is pushing him to the top of the polls.

But, his plan is strictly federal and doesn't touch what states do invidually.

I don't think he's expecting the vote from those folks.

Agreed.

I saw on TV the other day that when you're dealing with people who rob Peter (middle class, self employed, wealthy) to pay Paul (EIC, lower class, etc.), if you have enough Puals out there, you'll get elected with the message of I'll give, give, give to those individuals crying, gimme, gimme, gimme, regardless of how it affects the overall economy or the good of the nation as a whole.

[Nashville]

Soundbyte

Cain's 9-9-9 makes for a good soundbyte, but I don't think anyone (including Cain) has thought through all the complexities involved in actually bringing it to fruition. After this is done he will have to convince a majority of Congress. The full-blown implementation will never make it to TV, much too long to be a soundbyte.

Reference is made to the EIC crowd, and in the rural South I am living in the midst of them. I can't think of a single one of them that wouldn't trade their EIC for a decent job with decent benefits.

You hear on TV about a 9.1% unemployment rate. But the implication is the other 91% are the fortunate ones. I'm here to tell you that even among those who do have a job, many (if not most) of them are not making a livable wage, with the cost of groceries going up every day.

There has to be earnings to bring us out of our economic debacle. This is both business earnings and individual earnings. When earnings drop, the economy can be sustained for a while with enough debt to make up the difference. Then when debt reaches the breaking point, the economy then has to depend on government stimulous, which is only a conversion into more debt.

Bachmann is right, the 9-9-9 is not a recovery plan, it is only a tax plan.

[veritas]

In case you missed this

According to the IRS in 2009 59 BILLION dollars was paid out in EITC.

[BHoffman]

According to the IRS in 2009 59 BILLION dollars was paid out in EITC.

http://www.eitc.irs.gov/rptoolkit/faqs/fraud/

"Fraud

IRS estimates that between 23 and 28 percent of EITC claims are paid in error. Some of the errors are unintentional caused by the complexity of the law, but some of the claims are intentional disregard of the law."

So, IRS estimates between $14 and $17 billion taxpayer dollars are "paid in error".

[veritas]

Did you see the part

http://www.eitc.irs.gov/rptoolkit/faqs/fraud/

"Fraud

IRS estimates that between 23 and 28 percent of EITC claims are paid in error. Some of the errors are unintentional caused by the complexity of the law, but some of the claims are intentional disregard of the law."

So, IRS estimates between $14 and $17 billion taxpayer dollars are "paid in error".

the IRS wants us to submit form 8867 (paid preparers EITC checklist) to them starting next year?

[DTS]

I received this email link today and thought it explained the issue a little bit more. When you get into the site, click on the DickMorris.com tab

http://www.dickmorris.com/blog/999-the-truth-****-morris-tv-lunch-alert/

[Jesse]

He makes too many assumptions and I do not believe a 9% sales tax would be "absorbed" on even big ticket items. He does say that on smaller items, such as food the 9% probably will not be absorbed, but brushes it off like this is not a big deal. For many people trying to make it paycheck to paycheck a 9% hike on necessities is a huge deal.

With all due respect, in my opinion it was just another sales pitch and the plan remains as clear as mud.

[JohnH]

I agree. The only clear thing is that it's nothing but more campaign pandering.

[Peachie]

This is one

According to the IRS in 2009 59 BILLION dollars was paid out in EITC.

of the most fraudulent sections of the tax code. I saw it in the beginning and it's even more prevalent now. The people most hurt by this besides the taxpayers? The children of the parents receiving EITC. This commentary is not directed towards legitimate filers. However, I feel that more are illegitimate than are. I am not a store front operation and get none of the people filing (no pun intended) into HRB in January and February, but I know it's there.

[BHoffman]

the IRS wants us to submit form 8867 (paid preparers EITC checklist) to them starting next year?

Sure I saw it. TIGTA states that tax practitioners are the "first line of defense against fraud and corruption" under "Practioner's Role in Protecting Federal Tax Administration" on page 5.

http://www.irs.gov/pub/irs-utl/tigta_and_the_tax_preparer_community.pdf

We aren't forced to prepare EITC returns, and I guess everyone has their limit as to when the cost outweighs the benefit.

The EITC fraud crowd and the unscrupulous tax preparers will find each other.

[kpangelinan]

Has he also factored in the state/local sales tax rates into his 9% National Sales Tax?

If he just keeps the same non-food items taxable, the combined rate in my area would 17.25%.

And corporations? 9%. Many corporations do not make a profit for whatever reasons. They will have to pay 9% of their gross less certain deductions. Where will the money come from? Increased prices.

Good talking points, but in reality, it won't fly. Unfortunately, "good talking points" is what gets you elected.

More and more details are starting to come out on Cain's plan. But in reference to the corporate 9% tax, it's not on corporate profits as we know today. There will be no corporate income tax...the 9% tax is on COGS, not including wages....it's similar to the VAT in Europe....it's supposed to help businesses make pricing decisions without having to factor in their income taxes as well as bring corporations back to America who are manufacturing outside the country because of the income tax.