Here’s what I posed on FB regarding Cain’s plan:

Dear Mr. Cain,

Oberlin College kindly requests the return of its concept back.

That was weird considering Oberlin has been using 9-9-9 as shorthand for one of their distribution requirements for graduation for years before Cain started blabbing about it.  Basically, it stipulated a minimum of 9 credits each in arts & humanities, social & behavioral sciences, and natural sciences & mathematics.

At least you don’t hate it for Michelle Bachmann’s reason—if you turn it upside down it becomes 666.  No joke, she thinks this is a valid reason.

“At least you don’t hate it for Michelle Bachmann’s reason—if you turn it upside down it becomes 666.  No joke, she thinks this is a valid reason.”

Wow!  Like all the white, Red-State Americans I know, I heard that Negroes were stupid, lazy, really smart, and tirelessly working with every fiber of their being to destroy America.  But this puts a different complexion on things.

It’s well established that Obama is the Antichrist.  But now we’re finding out Herman Cain is also the Antichrist.  (I kinda liked him.  I would never have voted for him, you understand, but there was something about him that made him less scary than the other Negroes.)

So, is it some sort of Tag Team of Evil or something?  And what about Shrillery and the Clenis?  And Soros?  And unions?

(I heard some people say you’re a Negro too, Jesse, but I just can’t believe it.  Unless you’re one the articulate ones…)

Cain’s plan sounds like a Trojan horse designed to depress wages even further by making it more expensive to pay higher salaries to workers.  But I’m sure that’s just a coincidence.

  Cutting 9% from some poverty-level earner is a very different thing from cutting it from some billionaire’s interest income.

Cutting 9% from some poverty-level earner is a very different thing from cutting it from some billionaire’s interest income.

Why do you hate freedom?

I don’t remember where I saw it, but there are them that say Cain’s tax plan is eerily similar to the one used in the 2003 edition of SimCity. For those of you that don’t know and don’t care to Google, SimCity games let you build and/or run a city, from construction to services to dealing with natural disasters to fending off attacks from giant lizards. It has a default tax rate very similar to Cain’s plan, which the designers said was a simplified way for folks to understand how taxation plays into running a city without getting too bogged down so they could deal with those dratted lizards. Here is a link from HuffPo about it. Note, the mastermind of Cain’s plan, Rich Lowie, is knee-deep in Koch nastiness, but there’s no word on whether or not he’s played the game in question.

Either way, this re-goddamn-diculous plan’s given me a good excuse to give certain acquaintances of mine when they ask why I shan’t be voting for Cain when they express shock I don’t see the guy as someone I want running the country.

What I like is that he doesn’t specify what gets sales taxed as it is labeled ‘new consumable’.  What does that mean?  Is the coke or iPod in the vending machine get sales tax at the high price it is listed at or at the price they bought it from a normal store?  Or both times?  What’s new and what isn’t?

And I think it’s pretty awesome the leading Republican candidate for President could offer a plan that would raise taxes on 90% of Americans while simultaneously not pull enough to match what little we took in last year.

Awesome in the biblical sense.

Under the current system, an employee whose pre-tax salary is $50,000 actually costs an employer $53,825.

Amanda, I’m going to assume you’ve never actually employed anyone. Because if you have, and think the above is true, it’s time to lawyer up.

“Amanda, I’m going to assume you’ve never actually employed anyone. Because if you have, and think the above is true, it’s time to lawyer up.”

...if you think Amanda wrote this post, it’s time to get better reading glasses…

The other thing this would do is lead to the sudden formation of lots and lots of personal holding companies. (I’m sure nolo press would be there in a minute.) Because if you as a person buy a house, the mortgage isn’t tax-deductible, but if You LLC buys the same house and rents it to you for an amount that strangely matches the mortgage payment plus other expenses, they’re making a deductible investment and buying services from other businesses. Meanwhile AlsoYou LLC manages your portfolio (buying the stocks is an investment, hence deductible) and pays you dividends (deductible) and maybe even employs you as a consultant (deductible only if you form another shell corporation).

No doubt congress would quickly make sure that no one with a net worth under, say, $500K could engage in such shenanigans.

One wonders how this guy ran a successful business. Either he is guilty of something nefarious or the 9-9-9 plan is just shameless vote-grubbing.

Of course, the 999 plan doesn’t touch any state responsibilities so that portion of the calculation is the same.  Although that would raise the cost, since apparently other taxes and insurance aren’t deductible.

Amazingly, the problem gets worse the more you’re paid.  FICA tax is not assessed on wages over $106,800.  For someone paid $250,000 a year, the total employer-side FICA charged is $6,621.60, for an effective employer rate of 2.64% and a total cost of $256,621.60.  Under 9-9-9? Your employer would pay $22,500 in taxes on your salary for a total cost of $272,500.

So that’s basically the only thing to like about this “plan.”

The 9-9-9 thing almost sounds like something concocted by the CEO of a shitty fast food company—Get one revolting Godfather’s pizza with unlimited salad bar for the amazingly low price of 9.99.

Amanda, I’m going to assume you’ve never actually employed anyone. Because if you have, and think the above is true, it’s time to lawyer up.

Actually, the point is that a $50,000 salary has the employer-side FICA added to it.  I’m not accounting for other costs.

Unless you’re saying the employer-side FICA is more.  Which would be weird.

Hey Paul, thanks for proving that Cain not only play Sim City, but likely SecondLife too.  Everybody get an avatarLLC.

Actually, you missed a REALLY big loophole that would cause it to take in even less from anyone that has access to a decent lawyer.  Follow with me here:

1.  Cain says that you get to deduct “investments, all purchases from other businesses and all dividends paid to shareholders.”

2.  Everyone with the means simply incorporates themselves and tells their “employer” to buy them as a consultant (a purchase from another business, therefore deductible and not taxable).

3.  My personal corporation pays all my bills and buys everything for me (purchases from another business) and then pays me all my monies in “dividends”.

And to the person talking about Bachmann, how hard do you think she has had to bite her tongue not to say that it is not only 6-6-6, but it is coming from “CAIN.”  Do you think she spends all the time at the debates looking for the mark on him?

Actually, you missed a REALLY big loophole that would cause it to take in even less from anyone that has access to a decent lawyer.  Follow with me here:

1.  Cain says that you get to deduct “investments, all purchases from other businesses and all dividends paid to shareholders.”

2.  Everyone with the means simply incorporates themselves and tells their “employer” to buy them as a consultant (a purchase from another business, therefore deductible and not taxable).

3.  My personal corporation pays all my bills and buys everything for me (purchases from another business) and then pays me all my monies in “dividends”.

And to the person talking about Bachmann, how hard do you think she has had to bite her tongue not to say that it is not only 6-6-6, but it is coming from “CAIN.”  Do you think she spends all the time at the debates looking for the mark on him?

I appreciate that forward knowledge, Jesse.  I have been talking to people about the 9-9-9 plan as it effects most average people.  Currently in Pittsburgh, PA the surrounding county (Allegheny) has a 7% sales tax and the rest of PA is at 6 except for Philly I think…The idea that a sales tax set at 9% and a 9% income tax basically destroys everybody making less than about 65K a year.  That’s if the local sales tax is rescinded.  If it isn’t you will need to make close to 100K to off-set Cain’s plan.  It’s ludicrous but this 9-9-9 plan has been floated around for a while under various guises.  I’m not sure when I first saw it, probably the 1990s but it’s been a long-term libertarian argument for taxation.  Ultimately it rewards nobody and knowing it removes fica and other ways to offset cost it will just drive more jobs out of America without a protectionist policy to back it up.

I’m extremely surprised that any Republican would even dare suggest something like a “business tax”.  I thought they all wanted to give corporations complete tax breaks.  Cain can’t be popular with the GOP on this one.

And what’s the 9% sales tax?  Is that supposed to be a federal tax across the country?  Would it stack with state sales taxes?  9% is far higher than any general sales tax I’ve ever encountered.  It would also discourage spending would be pretty bad for the economy.

but it is coming from “CAIN.”  Do you think she spends all the time at the debates looking for the mark on him?

I’m actually surprised that she doesn’t say this wink and a nudge, considering that historically, dark skin was often considered the mark of Cain and was actually one of the justifications for slavery.

At least you don’t hate it for Michelle Bachmann’s reason—if you turn it upside down it becomes 666.  No joke, she thinks this is a valid reason.

Nah - I think she only said it so she could make some <strike>la-</strike> silly pun about “the devil being in the details”.  Which makes her really really witty - for a wingnut.

I don’t remember where I saw it, but there are them that say Cain’s tax plan is eerily similar to the one used in the 2003 edition of SimCity.

Somebody needs to introduce obsessive wingnuts to Victoria. They’ll be balancing taxes, industrialisation, social spending, and the military in no time.

Do I want to know about the dratted lizards?

Herman Cain = the GOP’s Overton Window device. When any of the other participants in the primary gets chosen to run against President Obama, Republicans will start repeating the mantra “At least his/her proposed tax scheme is not as crazy as Cain’s. What more do you want?”

And what’s the 9% sales tax?  Is that supposed to be a federal tax across the country?  Would it stack with state sales taxes?  9% is far higher than any general sales tax I’ve ever encountered.  It would also discourage spending would be pretty bad for the economy.

That’s higher than NYC’s sales tax.  However, 9% is the state sales tax for Washington State…..though with local taxes added on….the actual sales tax tends to be slightly higher.  Then again, Washington State doesn’t have an income tax so the vast majority of their revenues seem to come from sales taxes.

I was going to concur with exholt.  I believe a few locations in the US have local sales tax higher than 9% but those places use the sales tax in lieu of everything.  They have no income or property tax so it still hits the poor very hard but overall evens out when you trend towards the upper-middle class.  But 9% levied across the board and places like PA don’t charge tax on a good many things like clothing and other items, how would that be handled? 9+X for some items, 9 for non-locally taxed items?

I don’t believe Cain is the GOP’s overton window, I think he is firmly where a good many of the GOP voters are anymore.  They think a sales tax makes more sense because it effects “everybody,” shared sacrifice and all that.  They usually point to Canada but what they fail to recognize is that the poor and middle class get all or most of that handed back to them at the end of the year like an income tax refund.  They simply verify the receipts, fill out the paper work, and a big VAT refund shows up.  It’s a convenient part to leave out when discussing national sales taxes.

Xeranar, I guarantee you that the vast majority of GOP voters have no idea that Canada even has a sales tax.

They like Cain’s stupidity because they believe firmly that all problems have a simple solution that is not being implemented, especially economic ones.

This is the same moron who said that he’d keep all laws down to 3 pages or less.  Guess how short his franchisee contracts aren’t?

Europe (Germany in particular) has been using high VAT to depress local spending for years.  The people I know there, mostly engineering professionals and business managers, do not buy much of anything that they don’t absolutely need except when traveling elsewhere.  They honestly don’t have the levels of stuff we do.  It’s more complicated than a straight tax, but as I don’t buy much there either, I haven’t really investigated it.
MA has a 5.6% sales tax, but food and necessary clothing are exempt ( a raincoat, windbreaker or pants would not be taxed, but an evening gown or tux would be.  I’m not certain where business clothing falls as I seldom buy that except on weekends when the NH stores are closer - but that is for time and distance, not taxes).

JonG: I was assuming (probably wrongly) that the “count all your living expense as office expenses” dodge wouldn’t work, because the IRS is leery of that. But if your job title were something that required you to be on call at “corporate headquarters” 24/7, then you could probably get away with it. Especially if the general shortfall in revenue causes the IRS to be defunded.

And unless we want to pretty much go back to dirt roads and a handful of constables, this would have to be layered on top of local taxes. (In fact, local taxes would probably go up a lot)

It’s sort of depressing even to be discussing this, instead of everyone immediately recognizing that the proponent of such an idea should be ranting on streetcorners and pasting manifestos up on lamp posts.

Well, Chicago’s sales tax is 9.5, down from 10.  We don’t have a city income tax (yet), but we most certainly have property taxes.  Property taxes that aren’t raised, per se, but have the properties reassessed at incredibly higher values despite the market tanking and the units being under water.  Our taxes went up 600%—seriously!—all while the Mayor crowed about not raising proprty taxes.

Then we have entertainment taxes, candy taxes, food taxes, take-out taxes, etc. on top of that.  And city gas taxes, can’t forget that.

Plus Daley sold off every public work he could and spent the proceeds.  A for profit owns the parking meters for the next 74 years, and they are all 24/7 and much more expensive.  Plus!  Should a business move in, build a store/complex that removes a metered spot, they have to pay up all the years of ‘lost’ revenue.

Tacking another 9% on top?  For LESS services, since the Feds will have less revenue?  Sure, why not.  I won’t blame Wall Street!  I’m the <strike>53 99 </strike> 99.9%!

<quote>Xeranar, I guarantee you that the vast majority of GOP voters have no idea that Canada even has a sales tax.</quote>

I know most of them couldn’t name all 50 states.  But usually when I hear this argument Canada is mentioned because they’re our neighbor to the north.

While the page was loading I was thinking “Fantastic Number Nine?” Is this a post about Christopher Eccleston? Or that S

We don’t have a city income tax (yet), but we most certainly have property taxes.

Property taxes make more sense for cities and small states, because it’s so reside just-out-the-city-limits and get exempt.  Of course, cities like Chicago and New York are so big that they can still probably wing it, because it just isn’t worth the money to relocate fifty miles away from your place of business.

I like the idea of an income tax, but it definitely has its limits.

@29, what does it matter if there’s a sales tax or a tax on income? If you ever want to spend your money you’re still stuck to it aren’t you? I actually doubt Germany consists of people that only buy things they have to out of fear for the sales tax.

You’re forgetting that wages are deductible. If a Jobs Creator who will be impacted by a raise in the marginal rates from 35% to 39% pays $50,000 in salary, it only costs a net of $32,500… if the $50,000 *hadn’t* been paid as a salary, or other deductible expense, it would have had a 35% tax rate placed on it. (Then, yes, throw on the FICA and Medicare.)

By making the job more expensive, Cain thinks he’ll cause people to create more jobs. Because isn’t that what economics tells us? That the more expensive a thing is, the more people purchase it?

LongHairedWeirdo:  I’ve read several explanations of the Cain plan and according to several analysts, his plan would end having salaries as deductible for a company, instead they would be taxed on what they paid for wages.

Europe (Germany in particular) has been using high VAT to depress local spending for years.  The people I know there, mostly engineering professionals and business managers, do not buy much of anything that they don’t absolutely need except when traveling elsewhere.

I think a VAT is valuable in economic terms.  In theory, it encourages savings and discourages excessive consumption.  I think it’s useful in conjunction with a progressive marginal income tax, which decreases economic inequality and serves as the government’s bread and butter.  The problem is that the United States no longer has a sensible tax rate on high earners.  Especially paired with state and local sales taxes (which can be quite high; I pay almost 10 percent on my purchases), I don’t think it’s smart to impose a VAT until we have a marginal tax rate that caps out at 50 percent (what the top rate was during most of Reagan’s terms).

At this point, the only way I see progressive income taxes going up again is if we have a Nixon in China moment, where a Republican administration is obliged to push tax increases through Congress.  A Democrat will never have the political capital to reform our tax code in a smart and sane way.

I don’t think it’s smart to impose a VAT until we have a marginal tax rate that caps out at 50 percent

At the very least.

Don’t know if anyone posted this, but if there are deductions for employers that include, basically, amounts paid to contractors, but not amounts paid to employees, I think that there would be alot fewer employees out there and alot more contractors.

@40 and 41

That’s why we have these laws called Labor Codes in each state, to prevent employers from misclassifying the people who work for them so as to avoid paying a fairer share of those workers’ payroll taxes.

Cain’s ideas about taxation are just whacky, and I’ve yet to see any evidence that any of them would have an overall beneficial effect on the economy.  His handlers obviously need to step up their game.

Europe (Germany in particular) has been using high VAT to depress local spending for years.  The people I know there, mostly engineering professionals and business managers, do not buy much of anything that they don’t absolutely need except when traveling elsewhere.  They honestly don’t have the levels of stuff we do.

I’m also betting a part of that has to do with the fact that they must go through many more hoops such as using opportunities traveling abroad to purchase mid-high priced items and getting it back home without being hassled by customs not only to avoid the VAT, but also because the prices of many items are already more expensive in Europe/Germany than in the US. 

Several international students from there and some European members of some forums I frequent have not only complained about the VAT….but rant more angrily about the fact nearly everything in their home countries is priced much higher than in the US even before the VAT is tacked on and before the recession of 2008 started.

At least you don’t hate it for Michelle Bachmann’s reason—if you turn it upside down it becomes 666.  No joke, she thinks this is a valid reason.

The 8-8-8 plan is endorsed by fans of rotational symmetry everywhere.

laika -  The German VAT used to be 20%.  I’m not certain what it is now.  It had a decided cooling effect on their consumer economy/materialistic spending, especially as there were eximptions for specific limited necessities.

Comment #27: Xeranar on 10/14 at 03:36 AM

I believe a few locations in the US have local sales tax higher than 9% but those places use the sales tax in lieu of everything.  They have no income or property tax so it still hits the poor very hard but overall evens out when you trend towards the upper-middle class.

Well, don’t forget California.  We just had the base statewide sales tax reduced from 8.25% to 7.25%, but before that, my local sales tax was 9.5% (8.25% + 0.5% county + 0.25% city).  This is in addition to state income tax (top marginal rate is 9.3%, on income exceeding $48,029 in 2011) and property tax (from 1% to 1.3%).

None of the above should be construed as a complaint…