999 tax plan

Former Arkansas Governor, Mike Huckabee, speak...

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Yesterday evening I was clicking around the dial looking for baseball when I happened upon the Mike Huckabee show where he was talking to Herman Cain about his 999 tax proposal. I stopped to watch and learn. I like Mike, but I disagree with much of what he says.

Herman Cain explained that the 999 tax plan is composed of a 9% tax on corporate profits, a 9% tax on individual incomes, and a 9% VAT, Value Added Tax, a national sales tax, which is severely regressive. Payroll taxes would be eliminated, no Social Security or Medicare taxes. No taxes equals no programs, I guess. Herman may intend that Social Security and Medicare be privatized, but that is the same thing as no programs. Herman also told Mike that the 999 tax plan is a pathway to the FAIR tax which I also oppose.

In addition, the 999 tax proposal would eliminate the progressive income tax, the fairest tax I believe, and the capital gains tax, and the inheritance tax, the so-called death tax. I oppose the elimination of the capital gains tax and the inheritance tax and here is why.

The wealthy receive most of their income from capital gains and making capital gains tax free would mean that the wealthy would pay little or no taxes. Secondly, eliminating the inheritance tax would allow the wealthy to pass their wealth from one generation to the next untaxed and undiminished. That would create wealthy dynasties in the US that would allow the wealthy to purchase influence in Washington from whomever we elect forever. As it stands now, only the wealthy pay inheritance taxes; it is not a tax that faces the 99%, just the top 1%.

Louis Brandeis was an Associate Justice of the US Supreme Court from 1916 to 1939. He argued that you could have great concentrations of wealth or democracy, but not both at the same time. I agree, and I favor democracy, not great concentrations of wealth, either in private hands or corporate coffers.

Please see Herman Cain | FAIR tax not fair |  I am weary

6 thoughts on “999 tax plan

  1. Brandeis was quite possibly one of the most thoughtful, intelligent, and equitable justices ever.

    Your point on Capital gains and the inheritance tax are spot-on.

  2. I don’t think it would bring in as much as you think. At the rate the government spends money it would be a drop in the bucket. But again, simply raising taxes isn’t going to spur the economy. Plus, what people ignore is the fact that if you keep increasing taxes, behavior will change and revenues could decrease. Then what?
    Fair tax supporters do want to eliminate the IRS. With the fair tax it would be unnecessary. What’s the justification of keeping a government entity if its not necessary?
    A new system with lower rates, no loopholes, no deductions, and no politicians picking winners who get special treatment would be the best move. But politicians wanting to keep power and citizens more interested in worrying about how much other folks have or are paying won’t let effective change happen.

  3. This dystopian plan would erase 50% of Washington revenues, creating humongous cuts in programs designed to help women, children and elders. It is the quickest road to turn the US into a third world country.

  4. Thanks for using my article as part of your post. few of points for you.

    The plan is designed to bring in enough revenue so that the programs normally funded via payroll taxes would still exist, not be eliminated. Second, by lowering the corporate tax rate (which is currently second highest in the world) you get long term growth in corporate tax receipts from a)more companies wanting to set up shop in the US and b)current companies keeping their headquarters here instead of moving to more tax friendly countries.
    As far as eliminating cap gains taxes, consider that the rich would still pay a lot of money in taxes via the consumption tax. After all, the rich may make more money than everyone else, they also SPEND more than everyone else. So the rich will still pay more.
    I’m not sure what the income floor would be for paying the income tax rate, but I’m sure there would be one. And the impact would be less than people think since without the payroll taxes, people would have more money to spend.
    By the way, are you aware that under the fair tax there is a monthly prebate check that would help the lower income people cover their taxes on basic necessities?
    we need to worry about the total amount of tax revenue, not shares, and get the government to spend within means.

    • A consumption tax for the merely rich might work; a tax on million dollar cars, private jets, mansions, gourmet food, and luxury vacations would bring in a lot of revenue. Where a consumption tax fails is when it is applied to the very wealthy who cannot possibly spend most of their wealth. Instead they save more of their wealth as the amount increases and it increases as it remains untaxed. Frequently the money is saved in tax havens outside the US. The nominal US tax rate for corporations may be high, but the GEs of this world use the loopholes to legally pay little or nothing. We should take the simpler route of closing loopholes rather than experiment with a whole new system. I believe that the hidden goal of those who want the FAIR tax is the elimination of the IRS and the reduction in size of the Federal government.

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