Archive for August 27th, 2012
August 27, 2012 – A friend said I need to write a serious blog. As if none of my blogs are serious? So, here ya go Josh-
As I understand, Herman Cain’s 9-9-9 plan is a precursor to the FairTax plan. Cain’s plan begins with PHASE ONE then PHASE TWO where the FairTax comes into play.
Cain’s plan is called “9-9-9″ because it would replace today’s complicated and economically burdensome federal tax code with a simple, three-part system, consisting of a 9% flat tax on individuals, a 9% flat tax on businesses, and a 9% national retail sales tax.
Establishes the three areas of taxation.
Business Flat Tax = 9%
- Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports.
- Empowerment Zones will offer deductions for the payroll of those employed in the zone
Individual Flat Tax = 9%
- Gross income less charitable deductions.
- Empowerment Zones will offer additional deductions for those living and/or working in the zone.
National Sales Tax = 9%
- Unlike a state sales tax, which is an add-on tax that increases the price of goods and services, this is a replacement tax. Everything you currently purchase contains an embedded tax. It’s the combined taxes that everyone paid to produce the item and to get it on the shelf. It replaces taxes that are already embedded in selling prices. In other words, if you buy a widget that costs $100.00, that price includes all the imbedded taxes it took to get that widget on the store shelf, which is about 23%. Those imbedded taxes will be replaced by the lower tax rate. By replacing higher marginal rates in the production process with lower marginal rates, marginal production costs actually decline, which will lead to prices being the same or lower, not higher.
- Ultimately replaces individual and corporate income taxes
- Ends the IRS as we know it and repeals the 16th Amendment
From Herman Cain’s site:
9-9-9 Plan: Summary
- Removes all payroll taxes and unites all tax payers
- Provides the least incentive to evade taxes and the fewest opportunities to do so
- Lifts a $430 billion dead-weight burden on the economy due to compliance, enforcement, collection, etc…
- Is fair, simple, efficient, neutral, and transparent
- Ends nearly all deductions and special interest favors
- Features zero tax on capital gains and repatriated profits
- Exports leave our shores without the Business Tax or the Sales Tax embedded in their cost, making them world class competitive. Imports are subject to the same taxation as domestically produced goods, leveling the playing field.
- Lowest marginal rates on production
- Kills the Death Tax
- Allows immediate expensing of business investments
- Eliminates double taxation of dividends
- Increases capital formation which aids capital availability for small businesses
- Increased capital per worker drives productivity and wage growth
- Features a platform to launch properly structured Empowerment Zones to renew our inner cities
- The pro-growth, pro-job, pro-export economic policies of the 9-9-9 PLAN equals a strong dollar policy
For more information I encourage everyone to go to Herman Cain’s site to get all the fine details. It’s really not very complicated.
For information about the FairTax, may I highly suggest you purchase this book, “The Truth: Answering The Critics”
And in case you aren’t familiar with Paul Ryan’s tax reform plan, Click HERE.
Hope this gives you some insight and understanding on the plans that are floating around out there. No matter what, we need desperately to change our form of taxation. We cannot continue down this path of punishing the very people who built this country and keeps her strong.
What sense does it make to increase corporate tax rates? What happens when corporations are forced to pay higher taxes? They freaking ship their work to China because it costs less to produce their widgets there. Why the hell am I, as a business owner, going to pay $10 to produce each widget when I can get the same quality item made for $3 out of country? Why not decrease my tax rate so I can stay here, make more money, hire more people? It’s why folks are in business, to make money and create jobs. Want those jobs to come back to America? Lower the corporate tax rates. It’s a no brainer people! You don’t have to be an economic genius to understand that. One thing you can be sure of, China is loving and reaping the rewards of our taxing American producers to death.
As responsible freedom and liberty loving American producers, it is YOUR responsibility as citizens to educate yourselves in our economic system. Until you understand our system, you are powerless to change things for the better. What you do not know benefits government. The more you know, the less power government will have over your life and your future.
Empower yourself with knowledge. An educated voter is a very dangerous thing to send to the ballot box. It’s dangerous to the politicians who rely on your ignorance to keep them in power, and to keep you under their control. Take charge of your own destiny and secure your children’s future. Without you, they have no hope for survival.
Use wisely your power of choice at the ballot box in November. -JRoycroft