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Old October 13th, 2011, 05:50 AM   #1
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With Herman Cain rising to the top of the GOP candidates, has anyone taken a serious look at his tax plan? Would it work? Are the numbers there? Do you think it would ever pass?

My concern is that even if the numbers would produce the required revenue stream that it would never get passed due to all the special interest groups.

Personally, I like his no nonsense approach and his refusal to get drawn into the petty arguments. Plus, he likes Newt.
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Old October 13th, 2011, 11:45 AM   #2
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If you're one of the people that think that one of our biggest problems is that poor people do not pay enough in taxes and wealthy people pay too much you should love this plan. Sales taxes tend to be regressive, since people at the lower end of the income range end up spending a higher percentage of what they make just to survive and don't have as much left to save or invest. I haven't heard if food or other necessities would be exempt. If so it would help the poor, but would turn it into a middle class tax. The higher you went in income the less of your total wealth would be paid into it.

The 9% flat income tax would mean a reduction in spending power by those that currently don't earn enough to pay taxes. Some of this would offset by the elimination of payroll taxes. Payroll taxes are currently 5.65% for employees (will go to 7.65% if tax breaks are not renewed) and 7.65% for employers. The end result would depend on if employers shares any of the savings with employees. In general it looks like most of the upper half of wage earners would see a reduction in taxes while the lower half would see an increase.

I'm not sure what effect the elimination of most tax breaks would have.

It would mean a huge reduction in taxes for the wealthy. The combination of a reduction in income tax, elimination of capital gains tax, and reduction of business taxes would mean big savings for the wealth. The rich will certainly get richer under this plan, the poor will certainly get poorer.

Any savings seen from the simplification of the income tax code would likely be more than completely consumed by the new infrastructure and bureaucracy that would go into collecting the new national sales tax, so that would be a net loss.

I don't see how the big reduction in income tax, the elimination of the capital gains tax, the elimination of the payroll tax and the reduction of the business taxes can be made up with a 9% sales tax.

It sounds like a bad plan to me. I hope it never passes.
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Old October 13th, 2011, 11:49 AM   #3
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The coin generated from the 9% sales tax would most likely produce more revenue than the current system. Basically, this ensures that EVERY BODY, rich or poor pays there share of the tax. Cash workers, illegal immigrants, etc. Every one has to buy there goods. This type of plan will work, dont know if this plan will.
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Old October 13th, 2011, 12:08 PM   #4
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The coin generated from the 9% sales tax would most likely produce more revenue than the current system. Basically, this ensures that EVERY BODY, rich or poor pays there share of the tax. Cash workers, illegal immigrants, etc. Every one has to buy there goods. This type of plan will work, dont know if this plan will.
So you think that the elimination of a 15.3% payroll tax, a reduction of total income tax from around 12% to 9%, a reduction of business taxes from 15% or more to 9%, and the elimination of the capital gains tax can be made up with a 9% sales tax? That just doesn't add up to me. And never mind that some portion of the business will be driven underground into a black market to avoid the new sales tax.
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Old October 13th, 2011, 12:12 PM   #5
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So you think that the elimination of a 15.3% payroll tax, a reduction of total income tax from around 12% to 9%, a reduction of business taxes from 15% or more to 9%, and the elimination of the capital gains tax can be made up with a 9% sales tax? That just doesn't add up to me. And never mind that some portion of the business will be driven underground into a black market to avoid the new sales tax.
I did not say that. I said this type of plan could. Maybe not 9%, idk. Lets see if some figures can be put up on the amount of people and dollars they spend for cash workers and illegals. A flat tax rate on everything purchasable, across the board would be great. And what kind of black market will be created? the apple stand? the hair parlor? Lose the income tax, increase the sales tax and tax all goods and services.
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Old October 13th, 2011, 12:13 PM   #6
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this would also curve the goverments greed. They wont be able to take your money, make intrest off it, then give it back. There will be other great things to come from a tax system like this. Less rate, more taxed = more revenue
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Old October 13th, 2011, 12:15 PM   #7
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The coin generated from the 9% sales tax would most likely produce more revenue than the current system.
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I did not say that.
Forget what you said already?
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Old October 13th, 2011, 12:22 PM   #8
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Forget what you said already?
"most likely" is generic. It does not mean it "will"

How bout you finish reading and dont take things out of context. "most likely" combined with "this type" combined with " dont know if it will work" should give you a general understanding of what is trying to be conveyed. And that is, it most likely would work, pending enough gained from cash workers, illegals who dont pay but take. But again, Im not claiming it will.

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Old October 13th, 2011, 12:26 PM   #9
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I think this 999 plan, as currently put forward, would be an economic disaster, especially in the short term.

It's been stated by pundits on both sides of the aisle, and I have to agree, that totally eliminating capital gains and estate taxes and drastically reducing taxes on the top earners doesn't make much sense, especially if you do it all at once.

My main problem with this plan is that I cannot see how it would spur more demand from the wealthy since they already have money to spend. I've seen no evidence that demonstrates that the losses in the income tax portion of this plan would be offset enough by the revenue from the sales tax portion.
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Old October 13th, 2011, 02:24 PM   #10
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I did not say that. I said this type of plan could. Maybe not 9%, idk. Lets see if some figures can be put up on the amount of people and dollars they spend for cash workers and illegals. A flat tax rate on everything purchasable, across the board would be great. And what kind of black market will be created? the apple stand? the hair parlor? Lose the income tax, increase the sales tax and tax all goods and services.
Certainly produce stand and other businesses run out of shoe boxes. But also every owner run bar, restaurant, hardware store, gift shop, party store, computer store etc. will be tempted to do cash sales on the side not run though the register, especially for favorite customers and friends. I'm not saying all business owners will, but some certainly will, and it will be far easier to do and be more difficult to catch than having cash or illegal worker.
It would also be a disincentive for someone running a fledgling business out of their garage from going legit.
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Old October 13th, 2011, 02:27 PM   #11
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I love this guy, and I hope he gets the nomination.
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Old October 13th, 2011, 02:31 PM   #12
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"most likely" is generic. It does not mean it "will"

How bout you finish reading and dont take things out of context. "most likely" combined with "this type" combined with " dont know if it will work" should give you a general understanding of what is trying to be conveyed. And that is, it most likely would work, pending enough gained from cash workers, illegals who dont pay but take. But again, Im not claiming it will.
Ok.

I think you are most likely wrong.
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Old October 13th, 2011, 04:42 PM   #13
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Certainly produce stand and other businesses run out of shoe boxes. But also every owner run bar, restaurant, hardware store, gift shop, party store, computer store etc. will be tempted to do cash sales on the side not run though the register, especially for favorite customers and friends. I'm not saying all business owners will, but some certainly will, and it will be far easier to do and be more difficult to catch than having cash or illegal worker.
It would also be a disincentive for someone running a fledgling business out of their garage from going legit.
Why would a business owner go underground? its no skin of there backs! What your saying makes zero sense. There is absolutely no reason for a business to go "underground" you're on the wrong side of things now the business owner may pay his help cash, that already goes on.
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Old October 13th, 2011, 04:43 PM   #14
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besides, who the hell cares? I will vote for anybody just to remove obama. then figure it out later!
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Old October 13th, 2011, 05:05 PM   #15
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Why would a business owner go underground? its no skin of there backs! What your saying makes zero sense. There is absolutely no reason for a business to go "underground" you're on the wrong side of things now the business owner may pay his help cash, that already goes on.
To undercut the competition by at least 9%. or 15% in Mi.
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Old October 13th, 2011, 05:06 PM   #16
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besides, who the hell cares? I will vote for anybody just to remove obama. then figure it out later!
Thats the attitude that scares me most. And possibly the attitude that got Obama elected in the first place.
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Old October 13th, 2011, 05:13 PM   #17
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the poor should pay the most taxes as they use the most services
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Old October 13th, 2011, 05:17 PM   #18
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i love this guy, and i hope he gets the nomination.
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Old October 13th, 2011, 05:17 PM   #19
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To undercut the competition by at least 9%. or 15% in Mi.
what!? They have no control of sales tax...??? They just collect it. Just like right now, you pay 6% sales tax in MI. You dont see businesses undercutting and "going underground" over that do you? what makes you think that a 9% sales tax would do the same..??
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Old October 13th, 2011, 07:30 PM   #20
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what!? They have no control of sales tax...??? They just collect it. Just like right now, you pay 6% sales tax in MI. You dont see businesses undercutting and "going underground" over that do you? what makes you think that a 9% sales tax would do the same..??
Or they could do some cash business on the side and not collect it, saving the customer 15%. Or they could collect it, but not ring it through the register and pocket it.
I saw these things happen when I worked in restaurants and the tax was 4%. If the sales tax was 15% I'm sure they would happen even more.
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