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View Full Version : Herman Cain Awesome way that 9-9-9 was just broken down for me.

raider4paul
10-25-2011, 04:56 PM
EXAMPLE 1 - Am I paying 18%? What will the price actually be?

ANS: Many people think this means they will be paying 18%, being the 9% income tax and then the 9% sales tax, but, again, the sales tax only applies to dollars spent at the consumption level. Let's say you earn \$2,000 for the month. Currently at 15% you pay \$300 in tax. With 999, you'd pay just \$180, leaving \$1,820. You then pay rent and bills, we'll say \$820, then save/invest \$500, and then use the remaining \$500 for food and shopping. The 9% sales tax only applies to the \$500 spent on consumption, which is only another \$45. In the end, we paid \$225 total, or only 11.25% of earned income, versus \$300 currently at 15%. That's a simple example, but it illustrates the concept nicely.

In addition, there is ADDED SAVINGS. Remember, 22% of the cost of ALL goods is the corporate tax. Under 9-9-9, the corporate tax is reduced to 9%. This is a 13% savings that is passed on to the consumer through a) lower prices and/or b) hire wages in competitive markets.

BASIC EXAMPLE:

CURRENT TAX STRUCTURE:

Price = \$1.00 for consumer
Minus 22% for the corporate tax (or \$1.00 x 0.22 = \$0.22 cents for the corporate tax)
Minus 7.65% for employer's portion of payroll tax
------------------------------------------------
Actual Price of Good = \$0.7035 cents or \$0.70 cents

UNDER 9-9-9

Actual Price of Good = \$0.70 cents
x 9% corporate tax 1.09
_____________________________
New Price = \$0.763 cents
x 9% sales tax = \$0.83 cents

Difference in original price and new price = \$1.00 - \$0.83 = \$0.17

Again this is a very basic example of 9-9-9 with the corporate tax and the payroll tax changed.

In the current system, EVERYONE has a tax liability that varies depending on their particular tax bracket. Their tax liability can be decreased downward until it reaches zero by using deductions (mortagage, child tax credit, etc.). If your credit is bigger than your tax liability (meaning you have a lot of deductions that count against the taxes you paid to Uncle Sam in the form of a payroll tax), your tax liability is just reduced to zero. The rest of the credit is lost. So, in other words, Uncle Sam does not pay you more than you paid him during the year (no matter how many deductions you have).

So, in the following example, the income tax liability has been reduced to ZERO:

Person A under Current Tax structure
Gross income per month = \$2000
Income Tax paid = \$0.00
15% Payroll Taxes paid = \$300 (current structure)
---------------------------------------------------
\$1700 left over
-\$700 (bills and rent - not taxed)
--------------------------------------------------
\$1000 for basic necessities, etc.

- \$500 Spent on Food
- \$180 Spent on clothes from Goodwill
-------------------------------------------------
\$320 left over

Person A Under 9-9-9 structure
Gross Income per month = \$2000
9% Income Taxes paid = \$180
--------------------------------------------------
\$1820 left over
-\$700 (bills and rent - not taxed)
--------------------------------------------
\$1,120 for basic necessities, etc.

- \$500 Spent on Food
- \$45 9% sales taxes on food-
-\$180 Spent on used clothes from Goodwill
-\$0 taxes on used clothes
-------------------------------------------------
\$395 left over (note: Zero corporate taxes paid; doesn't own biz)

Here is a plan from a man who rose from the roots of poverty. Does ANYONE actually believe he wants to unfairly burden the poor. With all do respect, their calculations are wrong. Let's break it down this down some.

* It eliminates payroll taxes. Payroll taxes are the state and federal taxes that an employer, are required to withhold and/or to pay on behalf of employees. The combined amount is 15.3 percent
* It eliminates the estate tax. The estate tax is imposed "on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States. Currently, the rate ranges from 18 to 35 percent
* It eliminates the “sneak-a-taxes” we pay such as the gas guzzler taxes, alcohol taxes, travel taxes, firearm, tax estate and gift taxes, federal telephone excise tax, life insurance policy taxes, excise taxes on imports, cigarette taxes (if you smoke), utility taxes, etc.
* It eliminates corporate loop holes. No more special favors
* It provides simplicity in the tax code. It allows for deductions to charitable contributions but now you can see what you pay.
* It decreases the costs for income tax filing and compliance. For every dollar you send to the IRS, it costs thirty cents to send it in. Currently, we as a nation spend \$430 billion income tax filing and compliance. (again, more money to everyone)
* Used items are not taxed. Examples: used cars, used clothes, used houses, used jewelry, etc., (imagine how this will help the housing marking with the foreclosures)
* Under the current tax code, a person making \$50,000 will pay roughly \$10,000 in taxes. With 9-9-9, they will pay \$4,500 in income taxes. If they buy all new items with the remainder, they will still achieve nearly \$2,000 in savings.
* Right now, on average, 22% of the price we pay for everything is the corporate income tax being passed on to the consumer. When the corporate tax drops to 9% there is room for a 13% drop in prices, which should occur within 90 days. Further, the burden of the corporate income taxes falls 2/3 to labor and 1/3 to capital in the form of lower wages and profits, respectively. With more money left in the hands of businesses and consumers, there will without a doubt be a dramatic increase in market demand, production and competition. This means that prices will DECREASE, and likely absorb most, all, or even more, of the 9% sale tax. A MAJOR BENEFIT TO THE POOR
* Again, it's only on the dollars you choose to spend on new items, and everyone gets an instant raise in their paychecks due to the elimination of the 15% payroll tax. Businesses get instant relief with a decrease in payroll taxes

Consumer with more money + Business with lower prices = increased spending opportunities = increase in jobs

I just went and asked if I could get directions to the universe where logic tells you that everyone and every business can pay less taxes and we'll be revenue neutral, and I had this beauty posted to me. There are an impressive number of assumptions made in this.

LBennett76
10-25-2011, 05:21 PM
I like the part where they include the 7.65% of the employers payroll tax as a tax on the employee. Then they make the rest of the comparison based on that. They assume your employer will give you that money they used to pay in payroll taxes. That as far as I'm concerned is the most ignorant thing I've ever heard. If they can believe that, they'll believe anything.

Johncjackson
10-25-2011, 05:34 PM
I like the part where they include the 7.65% of the employers payroll tax as a tax on the employee. Then they make the rest of the comparison based on that. They assume your employer will give you that money they used to pay in payroll taxes. That as far as I'm concerned is the most ignorant thing I've ever heard. If they can believe that, they'll believe anything.

Almost everyone who wants to reduce taxes in some way and/or change the tax system/code makes the same assumption. I don't think people are necessarily naive enough to think that an employer would gladly pass that on to the employee in extra wages/benefits, but it certainly is part of the overall cost of employing and compensating the employee. Personally, I pay both parts directly.

spudea
10-25-2011, 05:46 PM
the assumptions in the first paragraph are completely wrong... someone earning \$2000 a month or \$24k a year isn't gonna be able to save \$500 a month especially if they have kids as they assume later in the post with the child tax credit. It will be consumed and the person will also have credit card debt every month paying additional taxes on credit card usage.

Also, they assume large savings and increase in demand for goods while simultaniously saying prices of goods will drop... an economic fallacy.

raider4paul
10-25-2011, 06:09 PM
Haha I just got banned from their page and I didn't even say anything rude. I just said the 9-9-9 plan makes 0 sense in the real world. What a bunch of wimps.

SpiritOf1776_J4
10-26-2011, 10:56 AM
9 9 9 plan makes 0 CENTS in the real world. Taxes don't create wealth!

Cain - another socialist, this time a Federal Reserve one.

wstrucke
10-26-2011, 12:24 PM
In addition, there is ADDED SAVINGS. Remember, 22% of the cost of ALL goods is the corporate tax. Under 9-9-9, the corporate tax is reduced to 9%. This is a 13% savings that is passed on to the consumer through a) lower prices and/or b) hire wages in competitive markets.

I would love to live in a world where this would happen.

wstrucke
10-26-2011, 12:25 PM
You guys are all talking about getting this info from a website, getting banned, etc... what website?

raider4paul
10-27-2011, 03:26 PM
You guys are all talking about getting this info from a website, getting banned, etc... what website?