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 Welcome back to the Bureau of Alcohol, Tobacco and Friends! Tonight, North Carolina radio host Pete Kaliner joins RedState’s own Jay Caruso, F. Bill McMorris of the Washington Free Beacon, Jeff Blehar of the Ace of Spades Decision Desk, and myself to recap the New Hampshire results, plus look forward to South Carolina. To join the group, watch live | Read More »
Share on Facebook 1 1 SHARES In a move sure to excite millennials everywhere, the University of Texas police issued a disorderly conduct citation to a preacher for the heinous crime of “offending someone.” What’s more, the preacher in question was not even ON campus, he was just near campus and directing his voice TOWARDS the campus. The preacher named Joshua, who was an intern | Read More »
To combat the ability of terror groups to attract teenagers (note: there has only been one variety of terrorist doing this in the United States) the FBI has set up a website. It seems obviously incomplete
Share on Facebook 1 1 SHARES In almost all cases, when it comes to running an enterprise, most on the Right would agree that the private-sector can do a better job than the federal government. Moreover, in almost all cases, most on the Left would disagree with the above statement. So, why is it that the nation’s air traffic controllers’ union is ready to back | Read More »
Share on Facebook 1 1 SHARES This is what it is. A rumor. But it is a rumor sufficiently well-placed that Bill Kristol feels comfortable running with it: Trump 32; Cruz 26; Rubio 20; Bush 10; Carson 7; Kasich 2. Keep in mind this is not an internal campaign poll but one that will be published in the next day or so. Compare and contrast | Read More »