Is Herman Cain and His Wildly Regressive 9-9-9 Plan For Real?
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Mangled syntax aside, Cain’s faith in these non-federal actors is touching, but hardly confidence-inspiring, given their past record. Maybe he’s planning on reviving the “thousand points of light” that worked so well during G.H.W. Bush’s presidency.
Look under the hood of the 9-9-9 plan, and you readily see why it is so appealing to wealthy Republican kingmakers. The essence of the 9-9-9 plan is to continue the shift in the tax burden, initiated by Ronald Reagan, from the super-rich to working Americans.
Take your run-of-the-mill corporate CEO earning $10 million a year and spending, say, $1 million. He would pay $900,000 income tax and $90,000 in sales taxes, for a combined total of $990,000, or 9.9 percent of his total income -- way, way, way below today’s 35 percent top income tax bracket and even way below the effective tax rate of just over 18.11 percent in 2008 for the 400 highest income earners, most of whose income is taxed at the 15 percent capital gains rate, according to the IRS. He doesn’t specify whether capital gains would be taxed as income, but even if they are, 9 percent sure beats the current 15 percent. And no estate tax. Cool.
On the other hand, take the average American household earning about $50,000, and spending virtually all of it. That’s $4,500 (9 percent) income tax and $4,500 (9 percent) sales tax for a combined total of 18 percent, nearly double the rate of our CEO under Cain’s get-you-coming-and-going plan.
And did you notice the teeny-tiny $126 billion tax on corporate income compared to the annualized rate of $340 billion in the second quarter of 2011, plus an additional $26 billion annually in excise taxes, most of which are paid by corporations, according to the BEA?
So to the question, “Is Cain able?” his answer is, cut federal government programs mainly benefiting working Americans and make them pay higher tax rates than the wealthy while reducing the effective tax rates paid by the super-rich and chopping corporate taxes by 63 percent. Sounds like a plan made in Republican heaven, Democrat hell.