How to kill 9-9-9 in 60 seconds - why is this easy target not being attacked?

[Original_Intent]

I have heard far too much tonight about this 9-9-9 plan, and it could be sunk in a 60 second easy to understand explanation.

"Under the 9-9-9 plan there is no mortgage deduction, no charitable giving deduction, no deduction for dependents.

Under the 9-9-9 plan, anyone making $20,000 per year, currently paying no taxes or even being assisted by the government, will pay $1800 on income and another $1800 in sales tax.

A family making $50,000 per year will pay $4500 in income tax and $4500 in sales tax, a total of $9,000 in taxes with no deductions and no refunds.

9-9-9 will be destructive to the poor and middle class. Because the plan is so simple, it is easy for anyone to do the math and ask yourself - will you be paying more taxes or less under 9-9-9? For most Americans, 9-9-9 will put more people below the poverty line than our current broken system."

It seems pretty straightforward - why is no one doing the math and spelling out what a disaster 9-9-9 is?

[Michael Landon]

I hope you don't mind but I just reposted your comment to facebook.

- ML

[Original_Intent]

Lol I don't mind, people need to wake up and quit being suckered by a pizza ad pitch. Spread it far and wide!

[dbill27]

I'm not sure how you can say they'll pay 4500 in sales tax a year. How do you know how much money they are going to spend?

[Danke]

The sales tax is huge. Could (probably would) lead to higher rates than 9% in the future. Foot in the door.

The income tax started out small, so too with the FICA tax.

And the federal jurisdiction is limited (i.e. most don't even realize the income tax doesn't apply to their "income"). How does one avoid a Federal Sales tax? Doubt it is even constitutional.

[kahless]

You are not hearing any criticism since it is a tax break to the media elite whom could care less about the poor and middle class.

[TER]

Another idiotic thing he keeps harping about is that 'prices don't go up', 'prices won't go up'. Really? I wonder when was the last time he went to a supermarket to buy some food...

[MattButler]

Its not even a 9-9-9 plan. Its a 9-9 plan. Corporations won't pay tax under Cain's plan and so the 3rd "9" does not exist. Let me explain why.

Cain's plan calls for 9% on gross income less dividends and investments (even investments made in China.) What corporation in its right mind will actually pay the tax when careful planning can allow them to avoid? Its not even careful planning but common sense business management. All they must do is pay the dividend or invest the money, which is what they already do! Because its only a 9-9 plan Cain's plan means he'll have to go borrowing from his Federal Reserve buddies or make the other rates higher. If he wants to balance the budget its going to be a 20-20 plan.

Furthermore, Cain either lies or is deliberately ignorant about his 2/3rd vote limit for future tax increases. This is not valid Constitutional law. No Congress or President is hamstrung. A simple majority can overrule Cain's so called 2/3rds vote limit any time it wants. If Cain truly wants to limit future tax increases, that can only be done with a Constitutional Amendment, something he has not proposed.

[TexAg09]

So you're assuming they'll spend $20k and $50k on items to produce the sales taxes? That would be hard to believe. I believe people blow the sales tax out of proportion since no one can pinpoint the average a family spends on consumer goods. But don't get me wrong, I don't want a national sales tax. Because that's just another tax set in place that can potentially be raised down the road.

But on another note, would that get rid of the state taxes as well? Because I currently pay 8.25% in Texas for sales taxes. So would that mean it'll be 17.25%? What does the state do in turn for income?

[madengr]

An end to charitable deductions would shut down thrift stores such as Saver's, Goodwill, etc., further screwing people.

[Cutlerzzz]

The bottom half of all income earned will pay more in taxes by a small amount, true. The biggest difference, however, will be that the elderly will see their taxes go up by 9% due to the sales tax.

[TomtheTinker]

I already payon 10% sales tax in ny... I think thats a good enough reason to not want to pay another 9%.

[Original_Intent]

So you're assuming they'll spend $20k and $50k on items to produce the sales taxes? That would be hard to believe. I believe people blow the sales tax out of proportion since no one can pinpoint the average a family spends on consumer goods. But don't get me wrong, I don't want a national sales tax. Because that's just another tax set in place that can potentially be raised down the road.

But on another note, would that get rid of the state taxes as well? Because I currently pay 8.25% in Texas for sales taxes. So would that mean it'll be 17.25%? What does the state do in turn for income?

Your point is well taken, but it makes a worse case for 9-9-9 (from the perspective of it being regressive). The poor will of necessity spend more of their income on sales taxable items than the wealthy will. Face it, if you only make $20K a year, mopst of that is going to be spent on sales taxable items.

I do like that Cain wants to get rid of all corporate subsidy. One of the few good points he has.

[lx43]

I don't know why the candidates like Bachmann, Ron, and the rest didn't go after this 999 plan harder. Never trust a politician with imposing another line of taxes, my county made that same mistakes several years ago and we are stuck with a property taxes and high sales taxes which they have raised 3 times. Before we only had property taxes.

The federal income tax is another example, it was suppose to be very small tax only on the rich...now look at the size of it!

[VBRonPaulFan]

I have heard far too much tonight about this 9-9-9 plan, and it could be sunk in a 60 second easy to understand explanation.

"Under the 9-9-9 plan there is no mortgage deduction, no charitable giving deduction, no deduction for dependents.

Under the 9-9-9 plan, anyone making $20,000 per year, currently paying no taxes or even being assisted by the government, will pay $1800 on income and another $1800 in sales tax.

A family making $50,000 per year will pay $4500 in income tax and $4500 in sales tax, a total of $9,000 in taxes with no deductions and no refunds.

9-9-9 will be destructive to the poor and middle class. Because the plan is so simple, it is easy for anyone to do the math and ask yourself - will you be paying more taxes or less under 9-9-9? For most Americans, 9-9-9 will put more people below the poverty line than our current broken system."

It seems pretty straightforward - why is no one doing the math and spelling out what a disaster 9-9-9 is?

you're being somewhat disingenuous here because someone earning $20,000 year currently pays $3,060 in payroll taxes right off the top. that's money they never see in their pocket because their employer is obligated by law to withhold it for FICA. the real non-starter with his plan is the introduction of a national sales tax which blah blah takes 2/3 to raise until that gets changed, or does get raised, yadda yadda. sounds just like the rhetoric used when they first wanted to introduce the income tax. only the top 1% of 1% will ever pay it, nobody who isn't a millionaire will ever pay a dime, etc.

edit: but yeah, ultimately the people on the lower end of the spectrum will most likely pay more in the end because of the removal of EIC, the addt'l child tax credit, mortgage interest deduction, etc. it's just not as simple a case as you tried to lay out in your OP.

[ghengis86]

I'm not sure how you can say they'll pay 4500 in sales tax a year. How do you know how much money they are going to spend?

Most people have <$2,000 in savings. They spend virtually all their money every week. Granted, you don't pay sales tax on something like rent/mortgage or other non-taxables, but b/c of distorted market signals and other factors people spend every dime the earn.


Oh yeah, the 9-9-9 plan is fucking stupid.

[LibertyEagle]

I have heard far too much tonight about this 9-9-9 plan, and it could be sunk in a 60 second easy to understand explanation.

"Under the 9-9-9 plan there is no mortgage deduction, no charitable giving deduction, no deduction for dependents.

Under the 9-9-9 plan, anyone making $20,000 per year, currently paying no taxes or even being assisted by the government, will pay $1800 on income and another $1800 in sales tax.

A family making $50,000 per year will pay $4500 in income tax and $4500 in sales tax, a total of $9,000 in taxes with no deductions and no refunds.

9-9-9 will be destructive to the poor and middle class. Because the plan is so simple, it is easy for anyone to do the math and ask yourself - will you be paying more taxes or less under 9-9-9? For most Americans, 9-9-9 will put more people below the poverty line than our current broken system."

It seems pretty straightforward - why is no one doing the math and spelling out what a disaster 9-9-9 is?

Send it to factchecker@washpost.com

[cindy25]

how would Social security be calculated if there would be no payroll tax?

[Danke]

how would Social security be calculated if there would be no payroll tax?

Excellent point.

[Original_Intent]

Send it to factchecker@washpost.com

Thanks for the suggestion LE, I sent it.

[Keith and stuff]

I have heard far too much tonight about this 9-9-9 plan, and it could be sunk in a 60 second easy to understand explanation.

"Under the 9-9-9 plan there is no mortgage deduction, no charitable giving deduction, no deduction for dependents.

Under the 9-9-9 plan, anyone making $20,000 per year, currently paying no taxes or even being assisted by the government, will pay $1800 on income and another $1800 in sales tax.

A family making $50,000 per year will pay $4500 in income tax and $4500 in sales tax, a total of $9,000 in taxes with no deductions and no refunds.

9-9-9 will be destructive to the poor and middle class. Because the plan is so simple, it is easy for anyone to do the math and ask yourself - will you be paying more taxes or less under 9-9-9? For most Americans, 9-9-9 will put more people below the poverty line than our current broken system."

It seems pretty straightforward - why is no one doing the math and spelling out what a disaster 9-9-9 is?

I totally agree with you. That is fantastic stuff for the average Democratic voter in MS. My guess is they make $15,000 or so per year, if that. However, that wouldn't work for the average GOP voter in NH, they make $50,000 or so per year.

[Original_Intent]

Keith, a household making about $50K and with a mortgage and a couple of kids is probably paying a total of $1K or $2K in Fed Income tax after deductions, tax credits and refunds. I guarantee you, that unless you are single and making that kind of money, if you sit down and run the numbers, 9-9-9 is going to be a hardship.

Also, many people get into homes for the tax break on the interest - now they are stuck in that mortgage and you are going to change the rules on them?

No, if most people thought this out, 9-9-9 would sink Cain. People are biting on the sound-bite and not thinking through the implications. (in my opinion)

[kahless]

We already have multi-city protests across the nation. Just wait until Cain's is President and tells these people they have to pay 9% tax on things they can barely afford as it is now. A Cain Presidency will equal major social upheaval in this country.

[Romulus]

Another idiotic thing he keeps harping about is that 'prices don't go up', 'prices won't go up'. Really? I wonder when was the last time he went to a supermarket to buy some food...

Yeah, I loved that line. Prices won't magically go up. How did he keep a straight face with that one.

[TexAg09]

I don't think the whole debate should be about how much you'll spend with a 9% sales tax. I believe the way you can defeat this is to focus on how it will affect the poor. On top of that, mention how it would compound onto a person's state sales tax (Cain really hasn't clarified). People would be turned off knowing they would be paying a 17% sales tax on everything they buy. That's just my opinion.

[mrsat_98]

The sales tax is huge. Could (probably would) lead to higher rates than 9% in the future. Foot in the door.

The income tax started out small, so too with the FICA tax.

And the federal jurisdiction is limited (i.e. most don't even realize the income tax doesn't apply to their "income"). How does one avoid a Federal Sales tax? Doubt it is even constitutional.

Just start handing out exemption certificates. They have to take them.



how would Social security be calculated if there would be no payroll tax?

Just say no.

[Romulus]

I don't think the whole debate should be about how much you'll spend with a 9% sales tax. I believe the way you can defeat this is to focus on how it will affect the poor. On top of that, mention how it would compound onto a person's state sales tax (Cain really hasn't clarified). People would be turned off knowing they would be paying a 17% sales tax on everything they buy. That's just my opinion.

No. The GOP does not care about the poor. They want them to pay taxes. Read some comments...

[flightlesskiwi]

Yeah, I loved that line. Prices won't magically go up. How did he keep a straight face with that one.

because he worked for the Federal Reserve. that's how.

[UtahApocalypse]

Another part nobody is discussing..... state taxes. you think that states will magically remove their own taxes?? not a chance. in Michigan we have a 6% sales tax already, that with Cain's 9% would be 15%!!!

[quezkittel]

Not to mention- not sure how the sales tax would work without an internet sales tax added (I wonder if we would all start buying from foreign companies online)

[VBRonPaulFan]

Keith, a household making about $50K and with a mortgage and a couple of kids is probably paying a total of $1K or $2K in Fed Income tax after deductions, tax credits and refunds. I guarantee you, that unless you are single and making that kind of money, if you sit down and run the numbers, 9-9-9 is going to be a hardship.

Also, many people get into homes for the tax break on the interest - now they are stuck in that mortgage and you are going to change the rules on them?

No, if most people thought this out, 9-9-9 would sink Cain. People are biting on the sound-bite and not thinking through the implications. (in my opinion)

You should really actually sit down and do these tax returns rather than pulling numbers from your ass. It would be easier for you to make your point and easier for others to understand.
4 person household (taxpayer, spouse, 2 kids under 16) making $50,000 W2 income; this is what their numbers break down as:
$50,000 AGI
-$11,600 std deduction
=======
$38,400
-$14,800 exemptions
=======
$23,600 taxable income

They are in the 25% tax bracket
$2,694 tax owed (from the tax table, it isn't just 25% applied against 23,600...)

That's a pretty good hunk of change to owe, however this scenario is allowed to get the child tax credit which is $1k/kid. So
$2,694 tax
-$2,000 CTC
=======
$694 tax owed

Now with Cain's plan:
$50,000 * 9% = $4,500
$4,500 - 694 = $3806 increase in tax liability.

Something else to keep in mind. Our current tax system is a pay as you go system. Employers withhold your payments automatically and remit them, or if self-employed you are supposed to send in payments quarterly. So you've got some cash already put towards your liability at the end of the year with our current system to take some of the bite out of a tax bill. With Cain's plan, are you just going to get stuck with a $4k tax bill at the end of the year and you just have to magically find the cash to pay for it that you might not have saved?

[Danke]

You should really actually sit down and do these tax returns rather than pulling numbers from your ass. It would be easier for you to make your point and easier for others to understand.
4 person household (taxpayer, spouse, 2 kids under 16) making $50,000 W2 income; this is what their numbers break down as:
$50,000 AGI
-$11,600 std deduction
=======
$38,400
-$14,800 exemptions
=======
$23,600 taxable income

They are in the 25% tax bracket
$2,694 tax owed (from the tax table, it isn't just 25% applied against 23,600...)

That's a pretty good hunk of change to owe, however this scenario is allowed to get the child tax credit which is $1k/kid. So
$2,694 tax
-$2,000 CTC
=======
$694 tax owed

Now with Cain's plan:
$50,000 * 9% = $4,500
$4,500 - 694 = $3806 increase in tax liability.

Something else to keep in mind. Our current tax system is a pay as you go system. Employers withhold your payments automatically and remit them, or if self-employed you are supposed to send in payments quarterly. So you've got some cash already put towards your liability at the end of the year with our current system to take some of the bite out of a tax bill. With Cain's plan, are you just going to get stuck with a $4k tax bill at the end of the year and you just have to magically find the cash to pay for it that you might not have saved?

Cain said the 9% replaces FICA too, so subtract $7650 from that tax.

[Romulus]

Another part nobody is discussing..... state taxes. you think that states will magically remove their own taxes?? not a chance. in Michigan we have a 6% sales tax already, that with Cain's 9% would be 15%!!!

In my little town sales tax is 9.5% here!

[Original_Intent]

You should really actually sit down and do these tax returns rather than pulling numbers from your ass. It would be easier for you to make your point and easier for others to understand.
4 person household (taxpayer, spouse, 2 kids under 16) making $50,000 W2 income; this is what their numbers break down as:
$50,000 AGI
-$11,600 std deduction
=======
$38,400
-$14,800 exemptions
=======
$23,600 taxable income

They are in the 25% tax bracket
$2,694 tax owed (from the tax table, it isn't just 25% applied against 23,600...)

That's a pretty good hunk of change to owe, however this scenario is allowed to get the child tax credit which is $1k/kid. So
$2,694 tax
-$2,000 CTC
=======
$694 tax owed

Now with Cain's plan:
$50,000 * 9% = $4,500
$4,500 - 694 = $3806 increase in tax liability.

Something else to keep in mind. Our current tax system is a pay as you go system. Employers withhold your payments automatically and remit them, or if self-employed you are supposed to send in payments quarterly. So you've got some cash already put towards your liability at the end of the year with our current system to take some of the bite out of a tax bill. With Cain's plan, are you just going to get stuck with a $4k tax bill at the end of the year and you just have to magically find the cash to pay for it that you might not have saved?

You are right, I completely spitballed the numbers, thank you for doing MY homework. Also your scenario does not then add the 9% sales tax on any consumer goods they buy (which granted is an unknown because they could spend anywhere from almost 0% of their disposable income to somewhat over 100% of it.

[amonasro]

In my little town sales tax is 9.5% here!

Yeah in IL it's between 8 and 10% depending on where you are. So a new Federal sales tax combined with state sales taxes is basically a trojan VAT. You can be sure they are drooling over it in Washington.

[Danke]

You are right

Actually he is incorrect. Need to subtract another 15.3% (or $7650 in your example) FICA under Cain's proposal.

[Krugerrand]

Just dial 1-800-HERMAN9 and order the Medium 1-Topping Tax Plan.

[heavenlyboy34]

Another idiotic thing he keeps harping about is that 'prices don't go up', 'prices won't go up'. Really? I wonder when was the last time he went to a supermarket to buy some food...
Absolutely. The whole 999 thing is ridiculous. Any sort of "national sales tax" will be a disaster. It will never be "flat" or "fair". With the income tax, people can take deductions for a number of things. That will no longer be the case under Cain's plan (as I understand it). The whole concept of federal taxes needs to be scrapped. Let the Feds get their money from tariffs and learn some spending discipline.

[affa]

Actually he is incorrect. Need to subtract another 15.3% (or $7650 in your example) FICA under Cain's proposal.

can someone redo this then? this post here is far better then the OP post, since assuming 100 percent of salary is spent on goods makes the entire post fall apart (and yes, i know the less you have, the more of it you will spend, but assuming 100 percent breaks the entire piece for anyone who balks at it like i did.)

[Original_Intent]

Send it to factchecker@washpost.com

Update: I sent my OP (complete with the errors that have been pointed out) to factchecker as suggested. They wrote back to me that they would try to do an article on 9-9-9 and what it really means for people of various incomes in their Thursday edition.

[VBRonPaulFan]

Cain said the 9% replaces FICA too, so subtract $7650 from that tax.

good call, although the FICA is deducted directly from your pay and doesn't get included as taxes you paid on your tax return. you never see that money that is part of your pay and can't claim anything for it in any way. although it's not $7650, you're lumping the employer portion in with the employee portion. on a $50,000 income, $2100 is collected in SS and $725 is collected in medicare for a total of $2825. that means the difference between Cain's plan would actually be $3,806 - $2825 = $981. You'd then have to make an assumption in how much discretionary spending someone would make and how much sales tax they'd pay for it.


You are right, I completely spitballed the numbers, thank you for doing MY homework. Also your scenario does not then add the 9% sales tax on any consumer goods they buy (which granted is an unknown because they could spend anywhere from almost 0% of their disposable income to somewhat over 100% of it.

you basically did. your numbers are pretty vague and very simple estimates that don't reflect reality. i did do PART of your homework, take those numbers and run with it. the difference between the two plans for different income groups is not an estimate of maybe 1k-2k here, and 2k-3k there, but an actual hard figure. telling someone who makes $50,000/year that they will end up paying $X more under Cain's plan will have much more impact then giving out roundball numbers and make your argument that much more effective. if it seems like i'm breaking your balls, it's because i'm trying to hold you to a higher standard. when you speak in semi-vague estimates and platitudes you sound just like Cain does when he speaks. and if people post this around the Cain supports will probably shred it unless it's pretty solid.

[anaconda]

So you're assuming they'll spend $20k and $50k on items to produce the sales taxes? That would be hard to believe. I believe people blow the sales tax out of proportion since no one can pinpoint the average a family spends on consumer goods. But don't get me wrong, I don't want a national sales tax. Because that's just another tax set in place that can potentially be raised down the road.

But on another note, would that get rid of the state taxes as well? Because I currently pay 8.25% in Texas for sales taxes. So would that mean it'll be 17.25%? What does the state do in turn for income?

As a whole, U.S. citizens save very little. Until recently I believe the national savings rate was negative. So it's a reasonable assumption that people in these 20K-50K income ranges will, in fact, spend all of their earnings.

Also, I don't think Cain's 9-9-9 plan in any way impacts state revenue schemes, such as the income tax, plus their own state and local sales tax, property tax etc.

[Danke]

good call, although the FICA is deducted directly from your pay and doesn't get included as taxes you paid on your tax return. you never see that money that is part of your pay and can't claim anything for it in any way. although it's not $7650, you're lumping the employer portion in with the employee portion. on a $50,000 income, $2100 is collected in SS and $725 is collected in medicare for a total of $2825. that means the difference between Cain's plan would actually be $3,806 - $2825 = $981. You'd then have to make an assumption in how much discretionary spending someone would make and how much sales tax they'd pay for it.


no, I'm pretty sure he said both. So your employer should give you what he was sending to the government on your behalf. And if you are self-employed you now pay the 15.3% directly.

[VBRonPaulFan]

no, I'm pretty sure he said both. So your employer should give you what he was sending to the government on your behalf. And if you are self-employed you now pay the 15.3% directly.

ah, i get what you're saying. the employer can't pay you quite as much as they could because ~7% of whatever they give you has to be paid into the FICA taxes.