Unless you have been living under a rock for the last month, you have probably heard about the Herman Cain 999 tax plan.
What is the 999 tax plan? Can it really bring prosperity back to America and get people back to work? These are all questions that Republicans and Democrats alike are asking themselves as we get closer and closer to the GOP primary races and the Presidential election.
Trying to understand the current code is almost impossible.
Only the best accountants can really explain the tax code in any way that is understandable.
So what is the 999 tax plan? Let's establish how this plan works, and then we'll discuss if it will work for America.
9 % Business Flat Tax Businesses are taxed at 9 %.
Period.
They are charged at 9% of gross income less any and all investments.
They can deduct purchases made from other businesses.
In addition, they can deduct dividends that are paid out to the shareholders of the company.
This encourages businesses to pay out more money because it is a deduction.
9 % Individual Flat Tax All individuals pay a 9 % flat tax on everything they own.
They don't pay more if they make $250,000 per year.
They don't pay more if they own a business that makes $250,000 per year.
All individuals pay the same rate, so those people that don't pay any taxes now would pay taxes in the future.
You could still deduct taxes for charitable donations.
This would ensure that giving to charities is strongly encouraged.
9 % National Sales Tax Everyone would pay a national sales tax on anything they buy.
You would not be taxed on things you do not buy.
Your taxes would not go to pay for Planned Parenthood funded abortions.
If you want to buy a boat, you will pay a 9% sales tax on it.
Many people have asked if this would do away with the state sales tax.
It has not been confirmed how this would work, but it appears that the 9 % national sales tax would not cancel out the state taxes.
You would still pay a state sales tax.
What is the 999 Tax Plan? It is a 9 % business tax, a 9 % individual flat tax, and a 9 % national sales tax.
Under this scenario, we can see that those living in poverty and those living in the middle class will wind up paying more in taxes.
There is no arguing this fact.
The so-called "rich" people would pay less in taxes, so some people are not happy about this.
My argument against this point is that companies will be paying MUCH less in taxes, so there would be a huge influx in new jobs to stimulate the economy.
The people that are poor and unemployed will be able to afford the 9 % tax because they will actually have a job! Contrary to the popular beliefs of those "evil" rich people, most companies don't just save all the extra money for their own pockets.
The biggest objection I have heard from conservatives is that this plan could be easily changed in the future so that the 9 9 9 plan could be changed to the 10 10 10 plan or 15 15 15 plan or whatever they want it to be.
I would argue that liberals already want to raise taxes, and having a 999 plan isn't going to change their thirst for higher taxes.
I think it would be harder to raise taxes because everyone would understand their taxes are going up.
What is the 999 tax plan? Can it really bring prosperity back to America and get people back to work? These are all questions that Republicans and Democrats alike are asking themselves as we get closer and closer to the GOP primary races and the Presidential election.
Trying to understand the current code is almost impossible.
Only the best accountants can really explain the tax code in any way that is understandable.
So what is the 999 tax plan? Let's establish how this plan works, and then we'll discuss if it will work for America.
9 % Business Flat Tax Businesses are taxed at 9 %.
Period.
They are charged at 9% of gross income less any and all investments.
They can deduct purchases made from other businesses.
In addition, they can deduct dividends that are paid out to the shareholders of the company.
This encourages businesses to pay out more money because it is a deduction.
9 % Individual Flat Tax All individuals pay a 9 % flat tax on everything they own.
They don't pay more if they make $250,000 per year.
They don't pay more if they own a business that makes $250,000 per year.
All individuals pay the same rate, so those people that don't pay any taxes now would pay taxes in the future.
You could still deduct taxes for charitable donations.
This would ensure that giving to charities is strongly encouraged.
9 % National Sales Tax Everyone would pay a national sales tax on anything they buy.
You would not be taxed on things you do not buy.
Your taxes would not go to pay for Planned Parenthood funded abortions.
If you want to buy a boat, you will pay a 9% sales tax on it.
Many people have asked if this would do away with the state sales tax.
It has not been confirmed how this would work, but it appears that the 9 % national sales tax would not cancel out the state taxes.
You would still pay a state sales tax.
What is the 999 Tax Plan? It is a 9 % business tax, a 9 % individual flat tax, and a 9 % national sales tax.
Under this scenario, we can see that those living in poverty and those living in the middle class will wind up paying more in taxes.
There is no arguing this fact.
The so-called "rich" people would pay less in taxes, so some people are not happy about this.
My argument against this point is that companies will be paying MUCH less in taxes, so there would be a huge influx in new jobs to stimulate the economy.
The people that are poor and unemployed will be able to afford the 9 % tax because they will actually have a job! Contrary to the popular beliefs of those "evil" rich people, most companies don't just save all the extra money for their own pockets.
The biggest objection I have heard from conservatives is that this plan could be easily changed in the future so that the 9 9 9 plan could be changed to the 10 10 10 plan or 15 15 15 plan or whatever they want it to be.
I would argue that liberals already want to raise taxes, and having a 999 plan isn't going to change their thirst for higher taxes.
I think it would be harder to raise taxes because everyone would understand their taxes are going up.