Herman Cain’s ‘Nein! Nein! Nein!’ tax plan

Posted by AzBlueMeanie:

I can just hear my late grandmother muttering in German, "Nein! Nein! Nein!" (No! No! No!) to Herman Cain's "9-9-9" tax plan for simpletons who vote against their own economic interests, or as Joseph Stalin liked to call them, "useful idiots."

Wolfgang (Arte Johnson's character on Rowan & Martin's Laugh-In) would say, "Veeery Interesting… but very stupid."

And he'd be right. This report exposes what is hidden behind Cain's simplistic "9-9-9" bumper sticker slogan. Cain’s ‘9-9-9’ tax plan hits poor, helps wealthy, experts say – The Washington Post:

The “9-9-9” plan that has helped propel businessman Herman Cain to the front of the GOP presidential field would stick many poor and middle-class people with a hefty tax increase while cutting taxes for those at the top, tax analysts say.

The plan would do away with much of the current tax code and impose a 9 percent personal income tax, a 9 percent business tax and a 9 percent national sales tax, which tax experts say would mean that low- and middle-income Americans would pay more.

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The 9-9-9 plan has helped define Cain’s candidacy. Coupled with his buoyant, plain-spoken style, it has helped transform the former long shot into a front-runner. Cain has touted the proposal’s apparent simplicity and fairness, but he rarely delves into details. His campaign Web site shows that the plan is only a step toward achieving his ultimate goal: to eliminate the Internal Revenue Service after replacing all federal taxes with a national sales tax.

Meanwhile, analysts said the 9-9-9 part of Cain’s vision would place a further burden on those hit hardest by the nation’s economic problems.

Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center, is working on an analysis of Cain’s signature policy proposal. Although the plan’s details remain sketchy, Williams said that it would increase taxes for the poor and middle class, despite Cain’s statements to the contrary.

For starters, about 30 million of the poorest households pay neither income taxes nor Social Security or Medicare levies. “So for them, doing away with the payroll tax doesn’t save anything. And you are adding both a 9 percent sales tax and 9 percent income tax. So we know they will be worse off,” Williams said.

At the top end of the income scale, meanwhile, the opposite would occur, he said. The top 1 percent of earners would get a tax cut under Cain’s plan, Williams said.

The nation’s top income earners have reaped the vast majority of the nation’s income growth over the past quarter century, pushing income inequality in the country to levels not seen since the Depression. The tax plan would exacerbate that gap, Williams said.

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Many conservatives are leery of creating a national sales tax that could be increased in the future.

“[I am] extremely uncomfortable with the idea of letting the crowd in Washington have an extra source of revenue,”wrote Dan Mitchell, a senior fellow at the Cato Institute, a libertarian think tank.

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Experts say that adoption of 9-9-9 would mark the most radical federal tax change since the expansion of the income tax in the 1940s. It would upset the vast array of social policy that has been built into the tax code for years by, for example, removing tax breaks that subsidize home purchases and college tuition.

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Although Cain talks about 9-9-9 as a concise, easy-to-understand plan to reform the sprawling federal tax code, it actually is envisioned as the middle step in moving the nation to a “fair tax” or national sales tax.

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Opponents say the fair tax would discourage consumer spending, the biggest driver of the nation’s economy.

And the 9-9-9 plan that Cain envisions preceding it would be no better, critics said.

“The absence of current law’s package of a standard deduction, personal exemptions, child credit, child care credit and the earned-income tax credit means a huge tax hike for the working poor and a substantial tax increase on the labor income of the middle class,” Kleinbard said.

The Last Word with Lawrence O'Donnell did a nightly series of segments this week on Cain's "9-9-9" snake oil tax plan that are well worth viewing.