are subject to tax. It also does not take into account the embedded
taxes in product pricing that no longer have to be charged. These two
factors alone are enough to offset any new or additional taxes on the
On Oct 20, 1:21 pm, MJ <micha...@america.net> wrote:
> America's Choice 201284% would pay more under Cain's 9-9-9 planBy Jeanne Sahadi @CNNMoneyOctober 19, 2011: 4:26 PM ET
> NEW YORK (CNNMoney) -- Under Herman Cain's 9-9-9 tax reform plan, 84% of U.S. households would pay more than they do under current tax policies, according to a report released Tuesday by a nonpartisan research group.
> And the impact would be felt most heavily by the lowest income groups.
> Those are some of the estimates from the Tax Policy Center's analysis of Cain's proposal, which has helped make him a leading contender for the Republican 2012 presidential nomination.
> While some key questions about the 9-9-9 plan remain unanswered, the Tax Policy Center's analysis is one of the first to take a comprehensive look at its potential impact.
> Cain's 9-9-9 plan wouldreplace much of the current tax codewith a flat-rate system: a 9% individual income tax; a 9% corporate income tax and a 9% national sales tax. Estate and gift taxes would be eliminated, as would the payroll tax, and most tax credits, deductions and exemptions.
> In terms of investment taxes, capital gains would be tax-free, while dividends would be deductible to businesses paying them out but taxable at 9% for investors who receive them.Cain's tax plan: More than 9-9-9According to the Tax Policy Center, households with incomes below $30,000 would have, on average, between 16% and 20% less in after-tax income than they do today.
> By contrast, households making more than $200,000 would see their after-tax income grow by between 5% and 22% on average.
> There are two reasons for that discrepancy between the poor and the rich.
> First, while the Cain campaign has said it is working on ways to lessen the tax burden on low-income households, the Tax Policy Center said it didn't have enough detail to assume what that change would be. One way to address regressivity is to offer a rebate to low-income households.
> The second reason has to do with how Cain would restructure taxes.
> Under the current system, most of the lowest income households end up owingno federal income tax. That's because their incomes are so low that they're exempt, or because their tax liability is canceled out by the standard deduction and tax breaks, such as the Earned Income Tax Credit.
> The Cain plan doesn't exempt very low incomes from taxation. And while it would eliminate the payroll tax, which is theheaviest taxfor low-income families, that tax relief would be offset for many by the elimination of the EITC and other tax breaks they qualify for now.
> But the majority of the highest income households would get a tax cut. For instance, 95% of those with more than $1 million in income would receive an average tax cut of $487,300.
> Under Cain, capital gains -- anotable source of incomefor the wealthiest Americans -- would be tax-free. He would also preserve the charitable deduction. And taxing all non-capital gains income at 9% would amount to a considerable break from today's top rate of 35%.
> Cain's plan has been criticized by those on the left, who say it would hurt the poor, and those on the right, who worry a new national sales tax is an invitation for the government toraise taxes over time.
> Cain has said his plan would raise the same amount of revenue as the current system. The Tax Policy Center generally concurs with that assertion.
> In 2013, the group estimates that Cain's plan could raise about $2.55 trillion. That represents 15.4% of expected GDP, well below the historical average for tax receipts.
> But Cain's plan would not raise as much revenue as the current system if he decided to offer a rebate to low-income households to lessen their tax burden.
> The Cain campaign did not immediately reply to a request for comment.http://money.cnn.com/2011/10/18/news/economy/cain_999_plan/
Thanks for being part of "PoliticalForum" at Google Groups.
For options & help see http://groups.google.com/group/PoliticalForum
* Visit our other community at http://www.PoliticalForum.com/
* It's active and moderated. Register and vote in our polls.
* Read the latest breaking news, and more.