What I love about this ad is that after Herman Cain tells us he approves this ad, he lets us know “…but Obama doesn’t.” That one line sets up what this ad is all about. It’s simple and gets straight to the point. It tells you to go to 999MeansJobs.com and there it will explain what the 999 Plan will do.
Some people confuse the 9% Sales Tax as a VAT, it is not. The current sales tax is not a VAT and only charged at the retail point-of-sale and not when value is added.
Why is is such a great plan? You only have to turn to Art Laffer who can explain it better than me:
It used to be that the sole purpose of the tax code was to raise the necessary funds to run government. But in today’s world the tax mandate has many more facets. These include income redistribution, encouraging favored industries, and discouraging unfavorable behavior.
To make matters worse there are millions and millions of taxpayers who are highly motivated to reduce their tax liabilities. And, as those taxpayers finagle and connive to find ways around the tax code, government responds by propagating new rules, new interpretations of the code, and new taxes in a never-ending chase. In the process, we create ever-more arcane tax codes that do a poor job of achieving any of their mandates. …
(Crunching The Numbers) In the recent past, federal tax revenues from the personal and business income taxes, all payroll taxes, and the capital gains, gift and estate taxes have averaged $2.3 trillion, while gross domestic product has averaged about $14.5 trillion. The total revenue from these taxes as a share of gross domestic product averages around 16%. Sometimes it’s a good deal higher, as in the boom of the late 1990s, and sometimes its lower, as in today’s “Great Recession.” But a number in the 16%-19% range is as good as you’ll get under our current tax code.
By contrast, the three tax bases for Mr. Cain’s 9-9-9 plan add up to about $33 trillion. But the plan exempts from any tax people below the poverty line. Using poverty tables, this exemption reduces each tax base by roughly $2.5 trillion. Thus, Mr. Cain’s 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax.
The whole purpose of a flat tax, à la 9-9-9, is to lower marginal tax rates and simplify the tax code. With lower marginal tax rates (and boy will marginal tax rates be lower with the 9-9-9 plan), both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs. Tax revenues will also increase enormously—not because tax rates have increased, but because marginal tax rates have decreased. …
This is the type of tax increase I wholeheartedly support. I support collecting more in taxes from people with high incomes who choose to actually pay taxes at lower tax rates than use lawyers and accountants to avoid taxes at higher tax rates. Some tax revenues at low tax rates is a heckuva lot better than no tax revenues at high tax rates.
While the 9-9-9 plan has captured people’s imaginations at this moment, it’s not all that different from California Gov. Jerry Brown’s 13% flat tax when he ran for president in 1992. As you may recall, he came in second behind Bill Clinton in the Democratic Party primary.
In 1986, President Reagan passed a major tax-reform bill that lowered to 28% from 50% the top marginal personal income tax rate. The Tax Reform Act of 1986 also raised the lowest marginal income tax rate to 15% from 11% and closed many loopholes, making for a flatter tax structure. Reagan’s bill passed the Senate in a landslide 97-to-3 vote. Who says a flat tax can’t be a bipartisan proposal?
I couldn’t have said it better myself. I hate to just throw a block of text up in blockquotes but I know I can’t easily explain the plan, because I am not an economist like Art Laffer. I won’t even pretend that I am one. I suggest you read the whole article if you have to the time as it is a great read.
Share on Facebook 1 1 SHARES Well, this was definitely a sight to behold. Ted Cruz held a press conference today in Indiana, where he first addressed Trump’s latest insane allegation, that his father Rafael was somehow involved in the assassination of JFK. After pointing out that a mentally balanced person would not have made this allegation on live television, Cruz paused, appeared to think | Read More »
Share on Facebook 1 1 SHARES While you weren’t looking, CNN has been busy demolishing the once-invincible ratings gap between themselves and Fox News. CNN beat Fox News decisively for their prime time lineup in April, and especially in the coveted age gap of 25-54. In fact, the only demographic in which Fox News beat CNN was the over 54 demographic, which is one of the least valuable | Read More »
Share on Facebook 1 1 SHARES Earlier this week, Chuck Todd laughed off the suggestion, raised by Ted Cruz, that the media was picking the Republican candidate. The folks at the Media Research Center have done a study which proves that they are certainly helping. The media’s excuse for this is that Trump is the frontrunner. but that excuse doesn’t hold water. An analysis of | Read More »
Share on Facebook 1 1 SHARES outh Dakota is no stranger to defying the runaway federal courts when they are wrong. However now South Dakota is trying it again, on tax collection, and while I understand the motivation, I don’t agree with their policy aims. Denver to Host 2016 RedState Gathering…click here for more information and to Register Today Share on Facebook 1 1 SHARES