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Exactly.....I am in the 10% tax bracket and this 999 plan would kill me.
If you are currently paying 10% in income tax, and 15.3 percent in payroll taxes (which go away under 999), you are currently paying 25.3 percent of your income in federal taxes. Even assuming you spend 100% of your take home on "new" items (used items are not taxed), you are only paying ~17% tax under Cain's plan. About a 8% reduction...how would paying 8% less in taxes kill you?
The Herman Cain plan is an attack on the poor and those who are able to deduct their tax liability. That also includes most seniors. Cain also has not disclosed the entire plan. He doesn't talk much about his VAT, value added tax, which would be a tax on raw materials. That would increase the price on everything while staying hidden in the details. If you were in a high sales tax state like TN, sales tax 9.5%, you would be tacking on the Cain 9% federal sales tax and don't forget about that hidden VAT for a probable total of a 25% increase on everything you buy.
9-9-9 is a good deal for those making top dollar but most Americans are not making top dollar and many have no job. What's worse is that in 2012 the federal unemployment benefits will end. That will leave 6 million more Americans with no way to support themselves or their families.
The Herman Cain plan will do nothing more than shift the tax burden to those Americans who can least afford it and pad the pockets of those on top. Remember that Herman Cain quote, "if you are not rich or you do not have a job it is your fault."
If you are currently paying 10% in income tax, and 15.3 percent in payroll taxes (which go away under 999), you are currently paying 25.3 percent of your income in federal taxes. Even assuming you spend 100% of your take home on "new" items (used items are not taxed), you are only paying ~17% tax under Cain's plan. About a 8% reduction...how would paying 8% less in taxes kill you?
Payroll taxes support SS, the sacred cow. This is DOA. The current system we have isn't great but if he think you're going to replace it with something else, bring in more tax revenue and it's not a tax increase he's delusional.
I really like Herman Cain but his plan is not something that will work...
He is stating you don't pay the tax on used items....so no tax on a used car?
I don't get it but for groceries, clothes, etc....to me another 9 % is too much...I know on milk, bread there is now no tax, but again an increase of 9%is a lot.
Probably means we will not have to tack on a 9% sales tax at a garage sale.
9% Federal sales tax will hit retired persons especially hard.
Supposedly the 9% sales tax replaces other sales taxes... not really sure how that works... anyone care to explain?
Cain couldn't explain it this morning, why could anyone else?
Quote:
Originally Posted by hotair2
No the Fed can't unless the fed wants to takeover paying for all of the things state AND local taxes pay for in that state. State and local taxes are just that and can't be replaced by fed tax. I think a lot of people thought that it would. Cain never said that it would, but he was very misleading.
I agree a lot of people thought this would replace state sales taxes, but no, it will just be on top of them. For me, this would be about 17% in sales taxes in my city.
If you are currently paying 10% in income tax, and 15.3 percent in payroll taxes (which go away under 999), you are currently paying 25.3 percent of your income in federal taxes. Even assuming you spend 100% of your take home on "new" items (used items are not taxed), you are only paying ~17% tax under Cain's plan. About a 8% reduction...how would paying 8% less in taxes kill you?
O.K. Here is what is withheld from an employee's check by the employer not counting insurance and company benefits.
Federal income tax withholding (based on withholding table)
Social Security tax withholding (6.2% up to the annual maximum)
Medicare tax withholding (1.45%)
State income tax withholding
Lets look at these based on the previous post. There is no separate payroll and income tax for employees. If your effective federal tax rate is 10% then it is 10%, of which you will get almost all back next year because of deductions. So a 9% income tax would take the place of your 10% tax, but you would not get any of it back so it would be a 9% increase on income tax PLUS you would have to pay an additional 9% for sales tax, which would be an 18% increase.
Now if you take out SS TAX and Medicare now you are down to about a 10% increase, but this is assuming that nothing is getting paid into medicare and social security. Do you really think that is going to happen.
You can spin this plan anyway that you want. No matter how it is spun the numbers don't add up. It is just a catchy phrase. The dude is all flash and no substance, just like the pizzas.
O.K. Here is what is withheld from an employee's check by the employer not counting insurance and company benefits.
Federal income tax withholding (based on withholding table)
Social Security tax withholding (6.2% up to the annual maximum)
Medicare tax withholding (1.45%)
State income tax withholding
Lets look at these based on the previous post. There is no separate payroll and income tax for employees. If your effective federal tax rate is 10% then it is 10%, of which you will get almost all back next year because of deductions. So a 9% income tax would take the place of your 10% tax, but you would not get any of it back so it would be a 9% increase on income tax PLUS you would have to pay an additional 9% for sales tax, which would be an 18% increase.
Now if you take out SS TAX and Medicare now you are down to about a 10% increase, but this is assuming that nothing is getting paid into medicare and social security. Do you really think that is going to happen.
You can spin this plan anyway that you want. No matter how it is spun the numbers don't add up. It is just a catchy phrase. The dude is all flash and no substance, just like the pizzas.
You pay 7.65% payroll tax out of your paycheck. Part of your compensation is the other 7.65% your employer pays, for a combined 15.3%. Everyone that works pays those taxes, which are eliminated by Cain's plan. The person I responded to indicated he was in the 10% tax bracket. That could be, but in order for him to be in that bracket, he's have to make <$8500 a year. That may be true...in which case he'd be in trouble anyway. I took his comment to mean that he paid 10% in income taxes, meaning his total federal tax rate is 25.3%.
Lets assume he actualy is in the 10% bracket. If he got ALL of the federal withholding back, he'd end up paying about the same. He's not paying 15.3% in payroll tax, and if his income is indeed <$8500, it's highly unlikely that he's buying all brand new stuff. Even if he did, his rate would work out to about 17% (9% income tax, plus 9% x the 91% he has left for takehome, assuming no state tax).
You pay 7.65% payroll tax out of your paycheck. Part of your compensation is the other 7.65% your employer pays, for a combined 15.3%. Everyone that works pays those taxes, which are eliminated by Cain's plan. The person I responded to indicated he was in the 10% tax bracket. That could be, but in order for him to be in that bracket, he's have to make <$8500 a year. That may be true...in which case he'd be in trouble anyway. I took his comment to mean that he paid 10% in income taxes, meaning his total federal tax rate is 25.3%.
Lets assume he actualy is in the 10% bracket. If he got ALL of the federal withholding back, he'd end up paying about the same. He's not paying 15.3% in payroll tax, and if his income is indeed <$8500, it's highly unlikely that he's buying all brand new stuff. Even if he did, his rate would work out to about 17% (9% income tax, plus 9% x the 91% he has left for takehome, assuming no state tax).
OK. I think I covered all of this. The 7.65% that you are calling payroll tax is Medicaid and Social Security. So you are saying that Cain is suggesting that we no longer pay for Medicaid and Social Security. Seniors should love that.
Lets assume for the moment that granny is o.k. with having no social security benefits or medicaid.
Dude says he is paying 10%. At that rate he is getting all of it back. So he now is paying no federal income taxes. He is only paying 7.65 for granny.
Now the Cain plan would eliminate social security for granny and raise it 1.35% and then add another 9% for sales tax, which means a tax increase of 10.35% and granny is homeless without health care coverage. Nice plan.
This simple problem does not even address the other problem. That there will not be enough tax revenue to balance the budget as capital gains taxes, estate taxes are completely eliminated and the highest earners pay less taxes. Great deal for the rich, but that is about it. The economy, the debt, and the remaining 99% are screwed.
So you are saying that Cain is suggesting that we no longer pay for Medicaid and Social Security. Seniors should love that.
Not as long as I and 70 million other boomers still have the right to vote.
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