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I agree on all of your points, except that I don't see how someone making $20k would see any decrease. They would more than likely see an increase. Most people making $20k don't end up paying any federal taxes and usually if they have children get a nice refund at the end of the year due to the earned income credit.
A childless adult earning $20K will pay slightly over $1,000 this year in federal income tax, plus $1,500 in payroll taxes.
Assuming Cain's plan has exemptions equal to the current zero-bracket amount (standard deduction plus one personal exemption), this person will pay approx $950 federal income tax plus $950 national sales tax = $1,900. (But who knows, if the exemption is lower or it is zero, this person will pay even more 999 tax.) This works out to an effective federal tax rate of 9.5 percent under Cain's plan.
The tricky part not getting attention (yet) is that while Cain's plan does away with payroll taxes, it also does away with Social Security and Medicare.
It would be irresponsible for this $20K worker to NOT save and invest for retirement, so let's say the responsible thing to do is to save/invest 15.3 percent (equal to the payroll taxes which disappeared) of every paycheck.
Add this 15.3 percent to the 9.5 percent income/sales tax this person pays, and we're up to 24.8 percent...on someone making $20K annually.
Realistic? Reasonable? Feasible?
It looks to me like low-wage workers will have to choose between poverty now (and saving for retirement) and destitution later (and NOT saving for retirement).
Adults with children get big tax breaks today, which will disappear under Cain's plan, so they will be hit even harder than childless adults.
How much tax should a minimum wage burger flipper pay?
If everyone pays the same rate of tax, then living costs will adjust to the new reality. One glaring flaw in Cain's plan is that many wealthy people are able to avoid income tax entirely through various devices, so they would pay only the 9% sales tax, whereas worker bees would have to pay 9% income tax + 9% sales tax. So, the working class still gets hosed (and they like it that way...). I say eliminate income tax entirely and have a 15% consumption (sales) tax on everything, no exemptions.
The 9% sales tax is the only way you'll ever successfully tax the rich in America. In fact, forget income tax entirely and have a 15% sales tax, no exceptions or exemptions.
Cool lets make it harder for the poor and limited income people to buy food and medicine.
I can hear the ex Rep Grayson from Florida now "Republicans want to kill the poor and the elderly".
He wouldn't be too far off.
Cool lets make it harder for the poor and limited income people to buy food and medicine.
I can hear the ex Rep Grayson from Florida now "Republicans want to kill the poor and the elderly".
He wouldn't be too far off.
Like now, with State and local sales taxes, they do not tax food or medicines.
You sound just like "I got the boot" Grayson. Lies of propaganda can be stumped by the truth, way to easy.
Staying on subject, the 9-9-9 plan has absolutly no Social Security, Medicare or Medicaid. There would be NONE. The 1/3 of elderly in Nursing Care on Medicaid would be thrown out into the streets. None of the elderly would have medical care or Social Security Period
Cain must be getting under liberal's skin, to drag out the "good German....er...Hitler reference).
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