Herman Cain has a plan. It’s a plan with a catchy title. He calls it the 9-9-9 plan. It stands for a 9% across the board income tax rate for individuals, a 9% across the board corporate income tax, and a 9% across the board national sales tax. Cain says our tax code today is “the 21st century version of slavery” and his revolutionary new plan will fix that.
It’s a truly remarkable coincidence, isn’t it, that the perfect tax for corporations, individuals and on purchased goods is exactly the same? I mean, really, wow. If the perfect sales tax was 8%, that would have really messed up a good catchy campaign slogan, wouldn’t it? So, yeah, Cain got lucky on that.
Here’s the thing: it’s a complete sham. Shocking, I know, but this never-been-a-public-servant-and-proud-of-it candidate has developed a catchy marketing gimmick, that is a completely contrived bit of garbage. It’s being assailed by Republicans and Democrats alike.
It’s a regressive tax, to be sure. When you create or raise a sales tax, you inordinately impact poor people for whom a larger percentage of their income goes to purchases (rather than savings or investments.) Some people are so poor that they pay no income tax at all. So now, in addition to a new sales tax that they’ll have to pay, they get a new income tax as well.
Cain’s plan also drops the über-wealthy from a double-digit tax rate to 9% which is a windfall of cash for them. But Cain is a Republican so there’s nothing too surprising about that, I suppose.
If you have a family of four with an income of just under $50,000, they would pay more under the Cain plan. Currently, they are taxed at just less than 7 percent and pay $3,400 in income tax. Under Cain’s plan, they would be taxed at 9 percent or pay $4,500.
That’s $1,100 more.
Although the family would save almost $4,000 in Social Security taxes, it would have to give up the child tax credit of $4,000. Furthermore, it would pay an additional national sales tax of 9 percent on everything purchased, including groceries and clothes, which totals about $2,000.
That means under the Cain plan that family would be almost doubling its taxes, going from $3,400 to $6,500.
“It’s going to raise the price of just about everything by about 9 percent,” said former George W. Bush economic policy adviser Bruce Bartlett. “We know from experience and analysis that that tends to hurt people with low incomes.”
The 9-9-9 plan is also not revenue-neutral and, according to Politifact will actually bring in less money than the current system does now.
9-9-9 sounds pretty awesome, I’ll admit. It’s exactly the sort of thing I would expect from a guy whose claim to fame is his ownership of a pizza chain. But, just like our governor here in Michigan is proving, running a large government is very, very different from running a business. Cain’s 9-9-9 plan proves he doesn’t have the chops to run a country.
It’d be a pretty good deal for a pizza, though…