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Cain doesn't want to reduce the defecit by reducing the size of government, he just cooked up a new scheme to enable it.
If anyone ever doubted this guy was an establishment tool,his plan should confirm it.
It's a lot easier to change tax codes, especially on a grand scale, when unemployment is lower, and things have stabilized. It's really sad to think that there are so many candidates this year that do not understand demand.
Cain could have shown himself to be a leader, and a good manager, instead of spouting off early just to get a poorly thought out tax plan in the press. It worked for polling purposes, which say a lot about the people polled. He's already proven so far that he's not really thought of as a cabinet person, or even a VP.
There is not as much in the way of taxes rolled into rent, but they are there. Office employees, maint crew, and grounds crew, all add up.
And even if the rent is lowered, you will have much more of your paycheck than you had previously. With fewer taxes taken out, and in all honesty, not much of a change in the final cost of services and goods, you are in a win win situation, have far greater disposable income.
This is a good place to discuss the higher salaries workers will enjoy under 999. (You mentioned this several posts back but I had to run out the door and didn't have time for a longer reply earlier.)
Let's consider a full-time minimum wage employee. Currently he pays ~$500/yr federal income tax. Normally he pays 7.65 * 14500 = ~1100 payroll taxes. Total is ~$1600 per year. (I am not counting the employer payroll taxes since when those are repealed he won't see a dime of it in his paycheck, therefore he is effectively NOT paying it now.)
Under 999, he will pay income tax of ~ $1300. His national sales tax could be an additional $1150, depending on what exactly is taxed, based on new FIT $1300 and state/local taxes of $500, assuming he spends it all. (Will rent be taxed, as it is under the FairTax Cain wants to ultimately adopt?
But wait, there's more...since the payroll taxes are now gone, is he now completely on the hook to save and invest for retirement? Good luck on what's left of his minimum wage income.
Now he's up to almost $2500 in federal taxes, or $800 or so more than he pays now.
But guess what? In Cain's marvelous land, you can throw out the minimum wage in areas that are depressed. Probably won't be hard to find them.
I don;t know if we can sell enough high-end products to make up for the drop in the majority of consumer demand. But if we have to test this crap out, let's do it again
This is a good place to discuss the higher salaries workers will enjoy under 999. (You mentioned this several posts back but I had to run out the door and didn't have time for a longer reply earlier.)
Let's consider a full-time minimum wage employee. Currently he pays ~$500/yr federal income tax. Normally he pays 7.65 * 14500 = ~1100 payroll taxes. Total is ~$1600 per year. (I am not counting the employer payroll taxes since when those are repealed he won't see a dime of it in his paycheck, therefore he is effectively NOT paying it now.)
Under 999, he will pay income tax of ~ $1300. His national sales tax could be an additional $1150, depending on what exactly is taxed, based on new FIT $1300 and state/local taxes of $500, assuming he spends it all. (Will rent be taxed, as it is under the FairTax Cain wants to ultimately adopt?
But wait, there's more...since the payroll taxes are now gone, is he now completely on the hook to save and invest for retirement? Good luck on what's left of his minimum wage income.
Now he's up to almost $2500 in federal taxes, or $800 or so more than he pays now.
You left out the part that everything you pay for already has employee tax match rolled into the cost of the goods, but since it's no longer there, the cost of the goods, (which based on employer match along with FUTA which I believe would also go away, drops the price of the goods between 15-23% meaning that even with 9% sales tax, the cost of the goods is 6-14% less.
As for social security, have you considered what people did BEFORE social security? Why is it the job of the government to withhold money from your check FOR you so you can retire. Also, have you considered how much better off you would be handling your own retirement?
Check out Galveston, Brazoria and Matagorda counties in texas. The dropped out of the Social security program in 1981 when they were allowed to, (prior to a change in 1983), and everyone has benefited.
The Alternate Plan that began as a fledgling, upstart employee benefit plan has stood the test of time and has shown that it can and does outperform Social Security. The plan that started in Galveston County ended the first year with a modest balance. Today, with over 5,000 employees from these three counties The Alternate Plan has grown to a very healthy and sizable portfolio. Those who retire after 20 years will receive three to four times the rate as under Social Security. This Alternate Plan is not just an isolated act of a group of responsible and dedicated Texans. There are countless other examples of other local and state government entities showing the same responsibility and initiative throughout the United States. There are now five states that are not under Social Security and have their own plans: California, Nevada, Maine, Ohio, and Colorado. In the Colorado plan they now have over $14 billion in assets. Local govern-ment entities such as police and fire depart-ments have long handled their own retirement plans.
You left out the part that everything you pay for already has employee tax match rolled into the cost of the goods, but since it's no longer there, the cost of the goods, (which based on employer match along with FUTA which I believe would also go away, drops the price of the goods between 15-23% meaning that even with 9% sales tax, the cost of the goods is 6-14% less.
As for social security, have you considered what people did BEFORE social security? Why is it the job of the government to withhold money from your check FOR you so you can retire. Also, have you considered how much better off you would be handling your own retirement?
Check out Galveston, Brazoria and Matagorda counties in texas. The dropped out of the Social security program in 1981 when they were allowed to, (prior to a change in 1983), and everyone has benefited.
Most low income renters spend half their income on rent. Rent won't become cheaper. (My landlord has NO employees and therefore minimal payroll taxes embedded in rent.)
Yes I am quite aware that Social Security sucks as a "retirement" program and I would love to see it privatized.
But people earning minimum wage are not going to be in a position to adequately save and invest for the future after paying 999 taxes.
Most low income renters spend half their income on rent. Rent won't become cheaper. (My landlord has NO employees and therefore minimal payroll taxes embedded in rent.)
Yes I am quite aware that Social Security sucks as a "retirement" program and I would love to see it privatized.
But people earning minimum wage are not going to be in a position to adequately save and invest for the future after paying 999 taxes.
ok, so your rent doesn't change, but your paycheck has about 60% of the taxes taken out that was once taken out, meaning you have a higher disposable income. what's the problem?
The Tax Policy Center, a Washington think tank, says low- and middle-income families would be hit hardest, with households making between $10,000 and $20,000 seeing their taxes increase by nearly 950 percent.
"You're talking a $2,700 tax increase for people with incomes between $10,000 and $20,000," said Roberton Williams, a senior fellow at the Tax Policy Center. "That's huge."
Among those in the middle, households making between $40,000 and $50,000 would see their taxes increase by an average of $4,400, the report said. Those making between $50,000 and $75,000 would see their annual tax bill go up by an average of $4,326.
The Tax Policy Center compared taxes on U.S. households under current tax policy, with those imposed under the Cain plan. In using current tax policy, the analysis assumes that tax cuts enacted under former President George W. Bush — and extended through 2012 by Obama — would be extended.
The center did a separate analysis that assumed all the Bush-era tax cuts would expire at the end of 2012. Under that scenario, Cain's plan would still impose higher taxes on 77 percent of U.S. households, the report said.
Study: Cain tax plan raises taxes on 84 percent | Political Headlines | Comcast.net (http://xfinity.comcast.net/articles/news-politics/20111018/US.Cain.Tax.Analysis/ - broken link)
So once again the Republican/Conservative solution to the financial crisis is to give a huge tax break for the rich and make up the slack on poor and middle class families. Please explain how this is a good thing for the poor and middle class?
Quote:
Originally Posted by reconmark
As a matter of fact the Tax Policy center is NOT A LIBERAL organization. Sorry but ignorance, deflection, and spin won't stop an inconvient truth.
Once again, the answers we get from Repub/Conservatives is, "help the rich and screw the poor".
Except this pie is not at all what it appears to be. A middle income household making between about $64,000 and $110,000 would get hit with an average tax increase of about $4,300, lowering its after-tax income by more than 6 percent and increasing its average federal tax rate (including income, payroll, estate and its share of the corporate income tax) from 18.8 percent to 23.7 percent. By contrast, a taxpayer in the top 0.1% (who makes more than $2.7 million) would enjoy an average tax cut of nearly$1.4 million, increasing his after-tax income by nearly 27 percent. His average effective tax rate would be cut almost in half to 17.9 percent. In Cain’s world, a typical household making more than $2.7 million would pay a smaller share of its income in federal taxes than one making less than $18,000. This would give Warren Buffet severe heartburn.
ok, so your rent doesn't change, but your paycheck has about 60% of the taxes taken out that was once taken out, meaning you have a higher disposable income. what's the problem?
After paying the 999 taxes, I have less disposable income.
Currently $500 FIT + $1100 payroll taxes.
Under 999, I would pay $1300 FIT plus (potentially) $1150 in national sales tax.
If the burden is on me to fund my future, I don't have enough left to do that after paying $2400 tax.
Do either of you take into account the 24% (average) hidden sales tax that is now in effect, being eliminated?
Has negligible effect on rent which is by far the largest expense for low-wage workers.
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