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Checking Herman Cain's math on 9-9-9

StillBallin75 said:
I think most everyone knows the 999 plan won't actually come to fruition. What's interesting to me is the fact that so many people are jumping on the Cain bandwagon despite this **** plan, which is pretty much the cornerstone of his entire campaign.
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Hell it seems like Cain himself moved away from most issues for this plan, which he says to get a fair assessment off read what his people think of it.
 
SouthernDemocrat said:
That's ridiculous. His plan is ridiculous and that is why he cannot provide a reasonable answer as to how it would actually work and how it would not result in a tax increase.

Currently, businesses pay corporate income taxes on net profits. What Cain is proposing with his 9-9-9 plan is that they would pay taxes on gross revenue and only be able to deduct charitable contributions and capital investments - but then only if those purchases are made in the United States which would be an illegal tariff. The fact that businesses would no longer be able to deduct their single largest expense from their tax liabilities (employee compensation) would probably put better than half the companies in existence out of business. Sure, they pay payroll taxes now, but that is a part of your compensation, not a tax against their entire gross revenues. Moreover, being able to deduct capital investments made in the United States is automatically cancelled out by the fact that every one of those investments and outside services the companies would purchase would be subject to his 9% consumption tax. So the notion they would reduce the costs for their goods and services as a result of the 9-9-9 plan is absurd, they would have to increase costs to make up for the fact that they would now be the only companies on earth subject to taxes on gross revenues. Which is another problem with the plan. United States companies would be subject to a 9% tax on their gross revenues while none of their global competitors would be subject to the same tax.

It says something when you propose a tax plan and not a single one of the other Republican Candidates thinks its even workable, much less a decent idea. Normally, Republican Primary candidates attack each others tax plans as not going far enough. In this case, they are attacking 9-9-9 as a plan that ridiculousness, would raise taxes on on the middle class and the poor, and would cripple businesses.

Basically, what Cain is proposing would a mount to a crippling tax on the poor and working poor, a tax increase on the middle class and upper middle class, and a business killer. Hell it would even tax state and local governments with his 9% consumption tax.
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Wait a second here, he's proposing a 9% tax on Gross Revenue and not Net Income? If so this would break many businesses and especially many sectors of the agriculture sector, as many farmers handle and revenue lots of money, but don't necessarily profit much more than an average worker. I know my dad (who farms roughly 2100 acres) handles millions in grain checks, but doesn't profit even $100,000.

Good old Rod Blagojevich tried tax Revenue once and not Net Income, and was laughed at, and not to say, it failed miserably.
 
DontDoIt said:
Wait a second here, he's proposing a 9% tax on Gross Revenue and not Net Income? If so this would break many businesses and especially many sectors of the agriculture sector, as many farmers handle and revenue lots of money, but don't necessarily profit much more than an average worker. I know my dad (who farms roughly 2100 acres) handles millions in grain checks, but doesn't profit even $100,000.

Good old Rod Blagojevich tried tax Revenue once and not Net Income, and was laughed at, and not to say, it failed miserably.
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It's essentially a value-added tax. It's a tax on the gross income less purchases from other businesses. So yes, it is drastically different from the corporate income tax as we know it. Effectively, the 9% business tax has the same effect an additional 9% retail sales tax.
 
Reg said:
Who checked the math on Obamacare?
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No one thats why obamacare is a big pile of worthlessness that has to be thrown out
 
StillBallin75 said:
I think most everyone knows the 999 plan won't actually come to fruition. What's interesting to me is the fact that so many people are jumping on the Cain bandwagon despite this **** plan, which is pretty much the cornerstone of his entire campaign.
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Ive been a republican most all my life...and ive never seen anything like this primary....First Palin was their heroine...then Bachman...then Perry...now Cain...somewhere in there Paul was rising, then they sent out the party elites to start recruiting..Christie was like their 3rd choice...they even considered rubio ..truth is the LV debate they all looked like buffoons except for Gingrich and Romny...the two <gasp> TEAPARTY HATED RINOs....sorry teaparty but your candidates arent going to make it.
Why does the teaparty that ranted incessantly that obama was unqualified to be president...somehow now believe that Cain is qualified...sorry folks selling pizzas doesnt sell me on a president...Cain said he would release all the gitmo detainees for one america soldier...ok..weve always negotiated right ?...or wrong and everyone is picking his 999 apart...republicans democrats and everyone else.
Ok so whos taking bets on who is the next GOP hero or heroine
 
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lpast said:
Ive been a republican most all my life...and ive never seen anything like this primary....First Palin was their heroine...then Bachman...then Perry...now Cain...somewhere in there Paul was rising, then they sent out the party elites to start recruiting..Christie was like their 3rd choice...they even considered rubio ..truth is the LV debate they all looked like buffoons except for Gingrich and Romny...the two <gasp> TEAPARTY HATED RINOs....sorry teaparty but your candidates arent going to make it.
Why does the teaparty that ranted incessantly that obama was unqualified to be president...somehow now believe that Cain is qualified...sorry folks selling pizzas doesnt sell me on a president...Cain said he would release all the gitmo detainees for one america soldier...ok..weve always negotiated right ?...or wrong and everyone is picking his 999 apart...republicans democrats and everyone else.
Ok so whos taking bets on who is the next GOP hero or heroine
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Cain possesses absolutely nothing in the way of foreign policy. He's got charisma, he's got a simple message, and he used to sell pizza. Beyond that, I don't understand the enthusiasm for Cain.
 
StillBallin75 said:
Cain possesses absolutely nothing in the way of foreign policy. He's got charisma, he's got a simple message, and he used to sell pizza. Beyond that, I don't understand the enthusiasm for Cain.
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I agree and the enthusiasm for cain has come AFTER they had and lost enthusiasm for all the other to the right candidates...hes like their last great hope...who can they turn to next..??? theres only rinos left....
 
I actually ran the numbers against my own income and I would pay less tax under Cain's plan. This is assuming I spend every dollar that I can spend (which isn't true), in reality my taxes would be even more reduced than my math suggests. Of course, I'm single, have no kids, don't itemize deductions, etc... Basically fall into the "most screwed" class of people in the current tax system. Most of my income is earned income, thus I pay FICA on most of it. I don't have any deductions. I don't get the earned income credit, child tax credit, or other credits/deductions for having kids. Really, I'm not opposed to eliminating tax benefits for having children and all the special deductions people take on their tax return. Fraud is huge. It's just too easy to say you donated $2,000 in "household goods" to your church (AKA, you avoided paying a dump fee by donating your garbage instead of taking it to the dump.)

The concerns I have with Cain's tax system is he gives massively preferential tax treatment to investment income (it's not taxed), creates a new national sales tax (I can see the tax rate increasing in the future and I'm not a fan of sales taxes to begin with), and I question his revenue neutral math (only information I've seen suggests that it is NOT revenue neutral. Will he have to increase his 9/9/9 to 18/18/18 to make it get current tax revenue? Ugh. That'd be a tax increase for me.)
 
vvx said:
I actually ran the numbers against my own income and I would pay less tax under Cain's plan. This is assuming I spend every dollar that I can spend (which isn't true), in reality my taxes would be even more reduced than my math suggests. Of course, I'm single, have no kids, don't itemize deductions, etc... Basically fall into the "most screwed" class of people in the current tax system. Most of my income is earned income, thus I pay FICA on most of it. I don't have any deductions. I don't get the earned income credit, child tax credit, or other credits/deductions for having kids. Really, I'm not opposed to eliminating tax benefits for having children and all the special deductions people take on their tax return. Fraud is huge. It's just too easy to say you donated $2,000 in "household goods" to your church (AKA, you avoided paying a dump fee by donating your garbage instead of taking it to the dump.)

The concerns I have with Cain's tax system is he gives massively preferential tax treatment to investment income (it's not taxed), creates a new national sales tax (I can see the tax rate increasing in the future and I'm not a fan of sales taxes to begin with), and I question his revenue neutral math (only information I've seen suggests that it is NOT revenue neutral. Will he have to increase his 9/9/9 to 18/18/18 to make it get current tax revenue? Ugh. That'd be a tax increase for me.)
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Cains plan cannot work...everything ive read says his numbers do not add up...and the other republicans at the debate last night ripped his 999 plan also..
 
vvx said:
I actually ran the numbers against my own income and I would pay less tax under Cain's plan. This is assuming I spend every dollar that I can spend (which isn't true), in reality my taxes would be even more reduced than my math suggests. Of course, I'm single, have no kids, don't itemize deductions, etc... Basically fall into the "most screwed" class of people in the current tax system. Most of my income is earned income, thus I pay FICA on most of it. I don't have any deductions. I don't get the earned income credit, child tax credit, or other credits/deductions for having kids. Really, I'm not opposed to eliminating tax benefits for having children and all the special deductions people take on their tax return. Fraud is huge. It's just too easy to say you donated $2,000 in "household goods" to your church (AKA, you avoided paying a dump fee by donating your garbage instead of taking it to the dump.)

The concerns I have with Cain's tax system is he gives massively preferential tax treatment to investment income (it's not taxed), creates a new national sales tax (I can see the tax rate increasing in the future and I'm not a fan of sales taxes to begin with), and I question his revenue neutral math (only information I've seen suggests that it is NOT revenue neutral. Will he have to increase his 9/9/9 to 18/18/18 to make it get current tax revenue? Ugh. That'd be a tax increase for me.)
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I could see where someone of moderate income that was single and did not itemise would pay less under Cain's plan. However, if you ever do have kids and buy a home, and incur all the costs of raising the nation's next generation, then you will see why the current system - while far from perfect - is much better than what Cain is proposing. Under the current system your taxes go down when you are raising kids - when you need the extra money, then go up once they are out of the house - when you have far more disposable income than you did have. The reason why parents are given tax incentives is that the country has a vested interest in people having kids and raising the next generation of workers / producers. One of the biggest fiscal issues and drags on growth in Western Europe is there low birth rates and aging populations. The same is true for Japan.
 
Some independent group ran some numbers and they concluded 84% of the population would see their taxes go up. And it's not the top 84%...

Edit: Found it
Study: Cain Tax Plan Raises Taxes On 84 Percent | Fox News

Herman Cain's 9-9-9 tax plan would raise taxes on 84 percent of U.S. households, according to an independent analysis released Tuesday, contradicting claims by the Republican presidential candidate that most Americans would see a tax cut.
The Tax Policy Center, a Washington think tank, says low- and middle-income families would be hit hardest, with households making between $10,000 and $20,000 seeing their taxes increase by nearly 950 percent.
"You're talking a $2,700 tax increase for people with incomes between $10,000 and $20,000," said Roberton Williams, a senior fellow at the Tax Policy Center. "That's huge."
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SouthernDemocrat said:
I could see where someone of moderate income that was single and did not itemise would pay less under Cain's plan. However, if you ever do have kids and buy a home, and incur all the costs of raising the nation's next generation, then you will see why the current system - while far from perfect - is much better than what Cain is proposing. Under the current system your taxes go down when you are raising kids - when you need the extra money, then go up once they are out of the house - when you have far more disposable income than you did have. The reason why parents are given tax incentives is that the country has a vested interest in people having kids and raising the next generation of workers / producers. One of the biggest fiscal issues and drags on growth in Western Europe is there low birth rates and aging populations. The same is true for Japan.
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I just don't see the need to subsidize reproduction. Yes, if we're really lucky, may be we can raise the population density of the country to the level of NYC. That'd be great. Let's do it! (I suspect the real reason we reward such behavior is because that demographic is a significant percentage of the vote.)
 
vvx said:
I just don't see the need to subsidize reproduction. Yes, if we're really lucky, may be we can raise the population density of the country to the level of NYC. That'd be great. Let's do it! (I suspect the real reason we reward such behavior is because that demographic is a significant percentage of the vote.)
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I happen to agree 100%. While we're at it, do away with the EITC as well.
 
vvx said:
I just don't see the need to subsidize reproduction. Yes, if we're really lucky, may be we can raise the population density of the country to the level of NYC. That'd be great. Let's do it! (I suspect the real reason we reward such behavior is because that demographic is a significant percentage of the vote.)
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Its a fine line. If people have too many kids, then overpopulation becomes a huge issue. However, if people don't replace themselves, then you end up with an aging population and as people retire, there are not enough workers / producers to replace them. Japans low birth rate is the main reason their economy has been stagnant for nearly 2 decades now. Its the main reason why western Europe has lagged the United States in economic growth for decades, and why they are in the fiscal shape they are in today.

One of the problems with Cain's plan is that it substantially raises taxes on middle class parents, this could have the effect of discouraging having kids in the middle class, and would be a huge drag on economic growth in the United States in the coming decades. Of course, on the low end of the economic scale, they would do better to put off having kids until their financial situation improves.
 
StillBallin75 said:
It's essentially a value-added tax. It's a tax on the gross income less purchases from other businesses. So yes, it is drastically different from the corporate income tax as we know it. Effectively, the 9% business tax has the same effect an additional 9% retail sales tax.
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So essentially you're taxing a business twice with two different taxes?
 
StillBallin75 said:
From which it is DRASTICALLY different.



I'm saying the 9% "business transaction tax" is, IN EFFECT (in other words, it is for all intents and purposes almost the same as a VAT tax.) Basically the entire plan is a 27% tax on wages/income or sales, depending on how you look at it. The business tax, the personal income tax, and the sales tax all essentially amount to a 27% tax on total income.

TPC Tax Topics | Herman Cain
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You really need do a little research and learn what a VAT tax is. This tax is a SALES tax, NOT a VAT tax. Do you know the difference???? Obviously not.

A VAT tax is paid by EACH purchaser of a product, all the way through the production process. A sales tax is paid by the purchaser of the finished product.

Understand now ???

And your statement about this being a 27% tax is so far in left field that there's no use even starting to refute it.
 
SouthernDemocrat said:
That's ridiculous. His plan is ridiculous and that is why he cannot provide a reasonable answer as to how it would actually work and how it would not result in a tax increase.
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You could have made this post much shorter by simply stating that Cain is a conservative so his plan must be ridiculous.

Look, I don't like the plan either, but your snide remark that he must have failed math class is absurd. He has been ten times more successful in his life than Obama ever dreamed of.
 
Gill said:
You could have made this post much shorter by simply stating that Cain is a conservative so his plan must be ridiculous.

Look, I don't like the plan either, but your snide remark that he must have failed math class is absurd. He has been ten times more successful in his life than Obama ever dreamed of.
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I did not say he failed math class. I said his plan was ridiculous, would kill business, and regressively increase taxes on the poor and middle class. That is the same critique that conservatives have made against his plan. Moreover, the guy ran a medium sized business with a few hundred million a year in revenues. That is small potatoes compared to the business careers of Romney and Huntsman. Romney founded Bain Capital which has somewhere around 66 billion in assets. In terms of business leaders on in the Republican Primaries, Cain is like comparing a recreational jogger to Olympic qualifiers.
 
SouthernDemocrat said:
I did not say he failed math class. I said his plan was ridiculous, would kill business, and regressively increase taxes on the poor and middle class. That is the same critique that conservatives have made against his plan. Moreover, the guy ran a medium sized business with a few hundred million a year in revenues. That is small potatoes compared to the business careers of Romney and Huntsman. Romney founded Bain Capital which has somewhere around 66 billion in assets. In terms of business leaders on in the Republican Primaries, Cain is like comparing a recreational jogger to Olympic qualifiers.
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My mistake, it was lpast that claimed he failed math class.

I'm definitely not sold on Cain. My favorite is Romney, but the attempts to blatantly smear the man's career are disgusting. Godfather's pizza might not be that large, but he also served as the CEO of the National Restaurant Assoc. and served on the Board of Directors of the Federal Reserve Bank, Nabisco, and Whirlpool among others. His business experience matches well with anyone and makes Obama's past job experiences look foolish.
 
Gill said:
Cain has a degree in mathematics and a Masters in computer science, so sounds like he did just fine in math class.




What most critics of Cain's plan forget to take into account is the lower prices for goods and services that will result. Businesses will have lower corporate taxes and will pay almost 8% less for employee salaries. Presumably, the lower costs will be passed through to consumers.

While I'm not convinced that Cain's plan is the way to go, Politifact is not being accurate, which is not unusual for them.
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Hell will freeze over before consumers benefit from corporations making more money.
 
Gill said:
You really need do a little research and learn what a VAT tax is. This tax is a SALES tax, NOT a VAT tax. Do you know the difference???? Obviously not.

A VAT tax is paid by EACH purchaser of a product, all the way through the production process. A sales tax is paid by the purchaser of the finished product.

Understand now ???

And your statement about this being a 27% tax is so far in left field that there's no use even starting to refute it.
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Err no. VAT is only paid by the end consumer. Companies do not in the end pay VAT on their buys since it gets refunded. That is why many people in companies often try to buy big price items (computers and such) via the company so to save the VAT.
 
PeteEU said:
Err no. VAT is only paid by the end consumer. Companies do not in the end pay VAT on their buys since it gets refunded. That is why many people in companies often try to buy big price items (computers and such) via the company so to save the VAT.
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Errr, no. VAT is paid by each company that buys a product in the manufacturing process.

Value added tax (VAT) in theory avoids the cascade effect of sales tax by taxing only the value added at each stage of production. For this reason, throughout the world, VAT has been gaining favour over traditional sales taxes. In principle, VAT applies to all provisions of goods and services. VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government.
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Value added tax - Wikipedia, the free encyclopedia
 
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