Since we’re discussing Huntsman’s jobs plan outline, I thought it fitting to post up the details of Herman Cain’s 9-9-9 plan, which is the first stage to his economic plan that he released on August 21. Here’s the meat from his presser on the topic:
Here’s Phase 1 of my economic growth plan. It’s called the 9-9-9 plan.
A 9% business flat tax. Gross income less all investments, all purchases from other businesses, and all dividends paid to shareholders.
A 9% individual income flat tax. Gross income less charitable deductions.
A 9% national sales tax. This significantly expands the tax base, which helps everyone.
- This plan has the following advantages:
- It is fair, revenue-neutral, transparent and efficient.
- It puts zero tax on capital gains and repatriated profits.
- It replaces the payroll tax.
- It will aid capital availability for small businesses.
- It saves taxpayers $430 billion in annual compliance costs.
- It eliminates the uncertainty holding this economy down.
You can read about the rest in the above link or watch his appearance on Cavuto. This is the beginning of his economic framework package and an interesting one at that. While he may be down in the polls, Cain does have an interesting story to tell.
EDIT 9/1/11 09:40 AM EDT: Here’s Herman Cain’s “Economic Vision” document which includes additional details. Appears that the 9% national sales tax proposal would be akin to the Fair Tax a sort of merger of the Fair Tax + a Flat income tax rate.
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-Matt Newman is a conservative blogger from Maryland who blogs at Old Line Elephant / Pundit League and Tweets far too often.
September 1st, 2011 at 7:54 am
What does Herman do after this campaign ??? Cabinet ?
CraigS
September 1st, 2011 at 8:12 am
Interesting, but I’m not a fan of sales taxes.
September 1st, 2011 at 8:12 am
I like the gist of this.
But I wonder if anyone has actually “scored” these tax rates to what if they would provide sufficient revenue?
Huntsman calls his reforms “revenue neutral” though they would save billions in compliance costs and spur economic growth.
Does anyone know if these plans have been evaluated by third parties?
September 1st, 2011 at 8:17 am
#3 – MWS – Honestly, I’m not sure. I’d love to see a third party outfit compare the Cain, Huntsman, and later Romney plans. I’d also love to see a Perry plan.
September 1st, 2011 at 8:23 am
3,4
I was thinking the same thing.
I like Cain’s plan, but it might put us in a bigger hole at first (given that he could get it passed). A comparison of the plans would be great to see.
I love the idea of a national sales tax – it makes prostitutes, druglords, and other illegal operators also pay into the system. But it would be tough to pass since it seems to hurt the poor too much.
September 1st, 2011 at 8:32 am
This would be, relative to the current tax code, an enormously regressive tax plan. Without the kind of prebate system built into something like the fair tax, and without deductions, the tax paid by the those making, say, under 50k a year would probably at least double. Yes, it would be nice if everyone paid into the system and had a stake in tax changes, but this kind of regressivity makes even my conservative heart blush. Plus, no national sales tax of any kind until we get rid of the 16th amendment. A pretty awful plan I think.
September 1st, 2011 at 8:33 am
Mark in PA,
There’s always the “prebates” on sales taxes that can undo the taxes on food and necessities.
September 1st, 2011 at 8:36 am
Before this thread goes any further, I’d just like to say I like the line-up of the first 5 posters on the comments. If all the comments on this site were dominated by these 6 people and some others like them, it would be a much better place.
September 1st, 2011 at 8:36 am
#6 – Matthew Miller – I would assume that a Cain national sales tax plan would also include a prebate, but that’s partly because Cain is a huge proponent of the Fair Tax. So, I would assume he would not remove one of those key components into a different tax system he would propose, but until I see details, I’m not sure.
September 1st, 2011 at 8:36 am
It should read “I’d just like to say I like the line-up of the first 6 posters on the comments”
September 1st, 2011 at 8:38 am
Regarding Cain’s plan, I can’t help but think the wiley CEO chose these numbers more for their marketing appeal than based on any sound fiscal analysis.
Think about it. Why do retailers always hit the ’9s’? Because it keeps the number ahead of the nine in the lower decade, and thus “feels” less expensive. That’s why you see $19.99 instead of $20.00.
I think he’s doing the same thing here. Keeping three different tax rates right at 9%, conveniently all the same rate, and conveniently all a skinny looking single digit number.
Again, I like what Herman is driving at conceptually, but I don’t think the exact numbers were based on accounting or economic/budgetary analysis. So I doubt this plan would hold up under a CBO scoring.
September 1st, 2011 at 8:42 am
–Post Edited to include the link to Cain’s detailed “Vision for Economic Growth Plan”–
September 1st, 2011 at 8:42 am
Michele Bachmann has put out a good video.
http://www.politico.com/blogs/bensmith/0811/The_first_attack_ad.html?showall
September 1st, 2011 at 8:45 am
And I agree with MEM that this would probably be too regressive. We definitely have to broaden and flatten the tax base (yes, that means higher taxes for the middle class) because our base is absurdly top heavy now. But I think Huntsman’s tiered, simple income tax approach is more just.
September 1st, 2011 at 8:45 am
MassCon,
Thanks.
September 1st, 2011 at 8:53 am
8:
Thanks.
September 1st, 2011 at 9:22 am
I like Cain’s approach as a transitional step towards a Fair Tax, which I’ve always supported. He’s exempting charitable contributions, and presumably the sales tax on food if purchased through grocery stores. He also favors empowerment zones in inner cities. These reduce regressivity substantially, while progressivity is retained by increasing taxes on consumption, which hit the rich a lot harder.
This plan is less extensive than Huntsman’s, not addressing the regulatory or monetary environments, for example, but is a solid plan that would be superior to the current code.
Cain just moved past Perry into my Number 3 slot…..but, much like my Number 2, Jon Huntsman, probably has no shot at the nomination. When I think that both of these guys are polling below Bachmann and Palin, I find the injustice of it appalling.
September 1st, 2011 at 9:42 am
Nonsense. This site won’t have any value to anyone until it is dominated by me! Now, get off my lawn!
September 1st, 2011 at 1:14 pm
I like this idea. It would be a first step to the Fair Tax. If the voters would look closer to the candidates and their message, Cain’s polling numbers would skyrocket. He is the only real businessman and the only non-politician in this race. Our nation needs a candidate like Cain at this critical point in our history.
September 1st, 2011 at 2:20 pm
David Jon Sponheim is running for President under America’s Third Party. TELL HIM WHAT YOU THINK in his LIVE CHAT every weeknight on BlogTV: http://atp.so/blogtv
He is a centrist and appeals to everyone across the political spectrum because he’s an everyday American, just like us. He has put out a similar Fair/Flat Tax combination. He wants to exempt food (rather than giving a prebate, which would be more paperwork and bureaucracy). He also wants to exempt the first $100,000 in income. A supporter has suggested the 10-10-10 rate. We think the rate should be the same in all these categories, but want to run the idea by economists to come up with an exact rate.
Plus, we must look at cutting spending. We publish an article every month in our newsletter reviewing a new area to cut spending or raise revenues.
September 1st, 2011 at 3:12 pm
A plan like Cain’s (or any flat tax) would mean that the HUGE number of Americans that now pay no income tax would have to start paying a 9% individual tax as well as a 9% national tax. I can’t imagine that bill passing the congress as liberals would fight it to the bitter end (not to mention the furor and protests of those non-taxpayers).
September 1st, 2011 at 4:42 pm
Dangerous. Either income or sales tax but not both. In a decade our income tax rate would be same as now only with added sales tax.
September 1st, 2011 at 5:10 pm
Exactly. The Fair Tax only, please.
http://www.fairtax.org/site/PageServer
September 1st, 2011 at 11:48 pm
I’m officially done with Cain. You can’t have both a national sales and national income tax. Terrible. The Fair Tax is terrible for a host of reasons, but the last thing you want is a National Sales Tax and an income tax.
September 3rd, 2011 at 4:38 pm
This is a great idea. Dramatic new direction in tax reform. Too Bad Obama does not pick it up and use it in his speech on jobs. It adds a bold new direction that is balanced (9-9-9) Hits everyone equally. Eliminades most deductions and loop holes. A Flat income tax and a flat sales tax that is balanced and fair. At State level most of the population is used to sales tax and income tax. Obama’s new economic advisor has been in favor of a national sales tax. Let’s talk fairness. This works better if you replace the federal income tax and payroll taxes with the 9-9-9 plan. sharing the burden fairly and equally is the goal. If your family has income of $50,000 your income tax is $4,500. If you spend all of it with no savings then 9% is paid in sales tax or $4500. The Executive or manager that makes $500,000 has income that is 10 times higher and he pays ten times more in income tax. = $45,000. If he spends more on a bigger house , fancier cars, nicer vacations,etc. then he not only employs others but pays 9% in national sales tax. if he only spends $300,000 of that then he spends $27,000 in federal sales tax.
If the President wants balanced and fair taxation. I say this rich person pays his fair share and so does the middle class. Mr. President really be bold next week adopt a new tax plan that will help put our economy on a new track – adopt the Herman Cain plan and the voters will know you as a man of vision.
September 4th, 2011 at 2:38 pm
congress chooses power via our current tax code instead of raising revenue. we need something different. herman cain’s 9 9 9 plan sounds good.
September 5th, 2011 at 6:55 am
Combining a national sales and income tax at any level is disastrous! The other suggestions are good but only with the Fair Tax.
September 6th, 2011 at 6:23 pm
At least he has a plan, instead of Tax the rich. That is all the left knows, if they would ever really do the math, they could tax them at 100% and still not really help get us out of this mess. They could even take all of their assests and at the end of the year the tax bill would come do again and then what would they do.
September 7th, 2011 at 9:53 pm
As a retired lifetime small business owner, I and many others are now living on TAX PAID savings as well as Social Security. Your 9% national sales tax will DOUBLE TAX the saved money I now spend on every day purchases. Will my Social Security Income be taxed as income at 9% and again as Sales Tax at an additional 9%?
September 12th, 2011 at 8:18 pm
http://www.fairtax.org seems to have a lot of the issues worked out that he has yet to cover with is plan. A much simpler plan with a prebate to ease the tax burden on the poor, but given to everyone.
September 19th, 2011 at 9:19 am
[...] all tax preferences and an across-the-board flat rate? In fact it appears that Herman Cain’s 9-9-9 plan would do just that. Hmmm, I wonder why Obama isn’t endorsing it. Well, maybe he just [...]
September 23rd, 2011 at 2:27 pm
Fair Tax? That’s a joke. Any flat tax is an unfair plan. Those who receive/earn more from our society must pay more to support it. Eliminate all deductions, all exclusions, treat all income equally. No allowances, no credits, no exemptions, no capital gains rates, no tax shelters. Tax rates from 2% to 25%. File on a postcard.
September 24th, 2011 at 8:38 pm
9/9/9? A 9% federal tax on my income is double what I pay now. Plus a 9% sales tax that I am not currently paying. How does that help me? And I’m still stuck with state income tax. This would be a huge tax increase for me. And what does Cain plan to do about health care and social security? Did his employees at Godfather Pizza have health insurance?
September 24th, 2011 at 11:34 pm
So if GE takes all its profits and buys gold “from another business” it doesn’t have to pay any taxes at all. Apple would do the same. This would work out to 0% business tax.
September 25th, 2011 at 8:38 am
I see a lot of selfishness and greed in some of these posts; ‘It wouldn’t help me’; ‘those who earn/receive more…must pay more’; maybe the one’s that earn more work harder. Why should I pay more for the same service you get; i.e. military, just because I work harder than you. How about the one’s that receive and pay no taxes today (like the 46%+)Shouldn’t they contribute something! 9% is double what I pay now – baloney! Healthcare is a individual / State issue; not a Federal issue. The 9% covers social security as mentioned elsewhere. You also are forgetting that today you are paying a 6%+ flat tax for Social Security/ Medicare up to $100,000+ in income. Consider all the facts before you bemoan the “I feel sorry for myself!!
September 25th, 2011 at 12:16 pm
I don’t disagree with Cain from a conceptual standpoint, but I would need to see the plan scored by qualifie, independent parties before I could really get behind it. If the numbers do make sense and prove to be revenue neutral, we might have a winner.
September 25th, 2011 at 12:19 pm
You need to remove a few pictures from the top of the page. Why are you including unannounced candidates like Palin and Juliani? Technically, they don’t figure into the 2012 mix. Just an observation…………
September 25th, 2011 at 1:41 pm
GREAT IDEA !!! Did you know he will remove all implanted taxes from what you buy now(including gas), which is (if you know the FAIR TAX) 23%!!!! So 18% is a great deal!! Plus ALL illegal immigrants and tourists will pay the 9%, which they pay 0% federal tax, they only pay the state tax!!! READ THE FAIR TAX !! GO HERMAN CAIN…. get the word out!!! WE NEED THE TRUTH !!! GET RID OF THE DEMOCRATIC(F.D.R.) PROGRESSIVE TAX, REVAMP THE DEMOCRATIC PROGRESSIVE SOCIAL SECURITY(F.D.R.), AND FINALLY REVAMP THE DEMOCRATIC WELFARE(L.B.J.) ….. GET IT PROGRESSIVES!!!!
September 26th, 2011 at 9:39 am
Toilet Paper, 7 3/4 Sales Tax, 9% Federal Tax.
September 26th, 2011 at 2:02 pm
Horrible plan. About as nonsensical as Cain’s claim that he would be dead if Obamacare had been in effect when he was diagnosed with
cancer. (By the way, Herman, did your health insurance company tell you that you and your doctors could decide on any treatment you wanted without their knowledge and consent and they would be happy to pay for it, no questions asked? If yes, what is the name of this insurance company?)
Back to the 9-9-9 plan. So a single parent with 3 children will pay the same amount of income tax as a single person with the same income? A family of 4 barely surviving on a measly $20,000 income that pays no income taxes today will now have to pay $1800 in income taxes PLUS $1800 in sales tax? How is that fair?
Who pays the 9% payroll tax–the employer, the employee, or do they split it? What happens to Social Security and Medicare under this plan? Doesn’t no capital gains tax mean a person who makes his living as a stock market investor or real estate investor pays no income tax? Does that mean Warren Buffet’s tax goes down to almost 0? Does that mean CEO’s have to pay 0 on the profits they make when they exercise stock options?
Also, what effect will the plan have on real estate values? Will the elimination of the home mortgage deduction hurt real estate values? Will the imposition of a 9% sales tax hurt real estate sales because homes are now more expensive to buy? The $400,000 home is now a $436,000 home.
The 9-9-9 plan is hardly revenue neutral. Elimination of the capital gains and the estate tax, reduction of the payroll tax from 15.3% to 9%, reduction of corporate taxes to 9% with expensing allowed on every purchase, and reduction of personal tax rates to 9% even with the elimination of most deductions guarantees much less revenue coming into the US Treasury, even with the 9% national sales tax.
But don’t hold your breath waiting for Cain to provide analysis supporting his claim that the 9-9-9 plan is revenue neutral. Because Cain won’t like the results.
September 26th, 2011 at 5:00 pm
The person making $20,000 does pay income taxes, look at the Tax Tables o, irs.gov. They also pay the 7%+ flat tax for Social Security / medicare. I’m sure the man has done more analysis than anybody on this post with degrees in math and economics.
September 27th, 2011 at 12:19 pm
How stupid can people be, supporting a “flat tax”? When 20% (1/5) of the people earn 50 % of the income, and in the last 30 years, the top 10% has gained nearly 92% of the total wealth increase. These are figures from the US Census. So now here comes Caine wanting to reduce the tax “burden? to 9%. C’mon, give me a break.
September 28th, 2011 at 11:17 pm
My family barely survives on Social Security and State Retirement plus Medicare Advantage plans. We presently pay no income tax or FICA. We could not survive under Cain’s 9-9-9 Plan. I have not seen anything about exemptions or prebates.
September 29th, 2011 at 6:47 am
people on social cannot afford 9%
September 29th, 2011 at 6:50 am
need to explain the plan better for old people
September 30th, 2011 at 10:06 am
I’m 70 living on less than $11,000 gross (SS) in California. I’m both disabled with a heart condition and retired. We, (SS recipients) have not had a Cola increase for 3 years. I get only $16 monthly food stamps. I pay high Calif. sales taxes & gas price. Cain has been vague as all hell, in spelling this out to disabled seniors. He’s trying to fool the middle class into assuming we’ll have to live two seniors to a small apartment or worse. Try living on $.25 ramen soup and hard boiled eggs. I’m a Goldwater era conservative, but Cain is trying to appeal to the “uncaring element of the conservatives”. Let them (US… low income seniors) eat eggs, day old bread, ramen, and $.88 mini-TV dinners. Talk about regressive taxation…This 9,9,9 thing is pandering to the worst instincts of my tightfisted, fellow conservatives. Barry Goldwater, Bill Buckley, & Reagan would roll over in their graves, to see innocent poor sick folks be taken down another 9%!
October 9th, 2011 at 9:06 pm
I’m 44 and have been working two jobs for three years, starting at 5am and finnishing @ 10pm. my wife also works 40 hrsweek. two grade school kids. I’m tired of hearing people gripe about how many benifits they will loose with fair tax that I pay for with my 2!! jobs. I don’t ask for help, I save my money, and that is the way I was raised! If you can’t help yourself, go to church where we are glad to HELP! not have it taken to pay for dead beats!
October 19th, 2011 at 9:35 am
So –
I just had dinner in a Virgina restaurant where the sales tax was 12%
Under this plan, the sales tax on my dinner will be 21%.
Good by restaurants.
October 21st, 2011 at 7:38 am
A flat income tax is a joke that only fools get. Do you really think the tax code is complex because there are multiple levels of taxation? The code is complex because of the difficulty of determining “taxable income” and that doesn’t go away with a flat tax. If my company give me a car what is the tax on it? If my company buys me a country club membership do I pay tax on it? What if it gives me stock options as part of my compensation? Is it taxed at the time it is “earned” or when I exercise the option or when I sell? Do I pay tax on my company supplied health insurance? If so, the tax is higher for employees with families than single employees. How is that disparity dealt with?
October 24th, 2011 at 7:04 pm
A 9% business flat tax. Gross income less all investments, all purchases from other businesses, and all dividends paid to shareholders.
A 9% individual income flat tax. Gross income less charitable deductions.
A 9% national sales tax. This significantly expands the tax base, which helps everyone.
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I haven’t seen anywhere how much this will benefit me exactly. I’m looking for a dollars and cents amount. I like Herman Cain, but his 9 9 9 plan is short on examples of how it will affect people at different income levels and family sizes.
October 25th, 2011 at 2:07 am
And is a country club membership or a car gross income? I can see lots of non-monetary pay to get around this. Not for wage earners of course.
October 29th, 2011 at 6:55 pm
Allen S your problem is you live in California and if you can’t live on 11,000 a month which I think you ment 1100 then you are blowing your money on other items that you shouldn’t be like drugs because your hole premise is wrong!
October 31st, 2011 at 9:53 am
The following link is dead on this page: http://race42012.com/2011/09/01/herman-cains-9-9-9-plan/
http://www.hermancain.com/wp-content/themes/hc/images/economicgrowth.pdf
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