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Cain's 9/9/9 tax plan

Discussion in 'Political Debate & Discussion' started by Salty, Sep 8, 2011.

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  1. Salty

    Salty 20,000 Posts Club
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    Herman Cain's concept for 9/9/9 tax plan. Basically there would be three taxes of 9% each. Personal income tax = 9%. Personal consumption tax (or national sales tax, sometimes called The Fair Tax) = 9%. Corporate income tax = 9%.

    I basically like it - but for corporations - how do you figure there profit.

    For example Free at Last starts a publishing corporation. He writes a book about the US losing sovereignty. He prints 1,000 books and sells them at $20 each.
    .
    Gross profit...................... = $20,000
    .
    Expenses
    Priniting..............$5,000
    Mailing....................700
    Rent.....................1,200
    Employee..............2,000
    Coffee.......................10
    State Taxes 3,000
    Total..................................$11,910

    Net income...........................$8,090

    So does Free pay taxes on 20 grand or the $8,090 or something else

    Salty

    PS - Did I leave any expenses out?
     
    #1 Salty, Sep 8, 2011
  2. InTheLight

    InTheLight Well-Known Member
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    You pay taxes on the net profit, or $8,090.

    Expenses you might have left out:

    FICA taxes
    Fed Income taxes
    Interest
    Depreciation
    Telephone and internet expenses
    Office Supplies
    Repairs and Maintenance
    Bad Debts
    Advertising
    Insurance
    Bank charges
    Leased equipment costs
    Commissions paid to agents
    Attorney and/or accountant fees
    Dues and subscriptions
    Meals & Entertainment (you have coffee listed. BTW, Meals & Ent. are only 50% deductible)
     
    #2 InTheLight, Sep 8, 2011
  3. Walguy

    Walguy Member

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    Even tho in theory it's not a bad idea, I will never support a national sales tax. Elected representatives have a strong tendency to develop an insatiable appetite for tax dollars to spend, and I have not one speck of doubt that before too many years the income tax rate would be right back where it is now with the national sales tax on top of it, and the economy in worse shape than ever. The only possible scenario where I would even consider supporting a national sales tax would be a constitutional amendment simultaneously authorizing a national sales tax and repealing completely the income tax, so that the only way to reinstate an income tax would be with another amendment. Even then I wouldn't feel comfortable, since elected reps are so ingenious at getting around the law and constitution to get at more of our money. It's much safer just to not add another form of taxation at all.
     
    #3 Walguy, Sep 8, 2011
  4. Salty

    Salty 20,000 Posts Club
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    I agree with your list - however the critics are complaining about all the "loopholes" that corps have.

    So waht loopholes would you do away with?



    good issues. The point of the National Sales tax is to do away with all other taxes. I go along with the admendment - and it should state that the only internal taxes allowed would be national sales tax and corp tax. In addition, the admendent should state the max % allowed & that could only be allowed to increasce by a 60% vote in at lest one house - and then not to exceed 18 months, the expiration would be 30 Oct (just B4 election time). -Anotherwards it could be renewed indefintely.
     
    #4 Salty, Sep 8, 2011
    Last edited by a moderator: Sep 8, 2011
  5. InTheLight

    InTheLight Well-Known Member
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    Those items I listed are not loopholes, they are legitimate expenses that can be used to offset profits and thus reduce taxation.

    I can't think of any specific loopholes off the top of my head. There are specific exclusions for specific industries, and I admit I'm not up on most of them. They must be out there, though, as many Fortune 500 companies pay nowhere near the corporate tax rates. I'm sure there are loopholes created by having foreign subsidiaries acting as the corporate headquarters, and the funneling of money through those countries to launder it for tax purposes.

    Thought of one--I guess they could eliminate incentives like accelerated depreciation.
     
    #5 InTheLight, Sep 8, 2011
  6. Salty

    Salty 20,000 Posts Club
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    I agree with you -

    I'm sure you have heard that GE who made 5 Billion in US operations, did not pay any INCOME tax this year. Were there loopholes are were all legitimate expenses / charity gifts? Hmm, how much did they give to charity. How much did they pay to the insurance companies to cover their employees and their dependents....

    The article did mention they hired hundred of accountants to take advantage of all tax deductions. Think if those 400 + accountants were out of work....

    Liberals are constantly talking about loopholes. When they do - press them for facts. Was that 5 Billion Gross or net. Ask them how much in property tax that GE paid to local govt. Ask them how much they paid into Social Security, not the employees contribution, but the equal amt the employer must pay. I bet a lot of folks do not know that.

    ITL, in essence, I am not debating you on this - rather making us both stronger to answer Liberals who do not understand Economics 99, let alone 101

    Salty
     
    #6 Salty, Sep 8, 2011
  7. billwald

    billwald New Member

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    So a person who grossed $20800 a year would pay roughly $1,400 SS, $2000 income tax, and $2000 sales tax a year. he would pay $5,400 a year taxes and live on $14,600 a year in goods and services. If he tithed he would be down to $12,600/year. Rent and utilities $500/month. Down to $500/month for food, clothing, medical, and transportation. The New American Dream.
     
    #7 billwald, Sep 10, 2011
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