So, how will 9-9-9 affect your tax bill?

Discussion in 'Politics' started by exscentric, Oct 13, 2011.

  1. exscentric

    exscentric
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    Mr. Cain says the deduction from your paycheck will be 9% and you will pay 9% sales tax on all that you purchase (that is new). Hope someone doesn't try to develop a used food business! :laugh:

    Is that an increase or decrease for you? How big an increase/decrease - not looking for facts and figures just overall changes.

    The news tonight said a family of four with income of 50,000 income could have an increase of over 2000 in taxes. The context was income but they were not clear whether the 2000 includes sales or no, I would guess not.
     
  2. Ruiz

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    For a Pastor, he would eliminate the housing allowance exemption.

    Let me note that this has no way of passing. It may require a Constitutional amendment. That will not happen in Congress no matter who is in charge. This is a pipe dream for him.

    As much as I would want to only have a consumption tax, I think the likelihood is slim to none. A payroll tax is a horrible tax.
     
    #2 Ruiz, Oct 13, 2011
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  3. blackbird

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    Lets seeeeeeeeeeeee!!!

    9% sales tax

    on top of the 11% sales tax being charged now

    Thats 20% sales tax

    Well---that just means----I curb my spending on luxury items
     
  4. Don

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    I don't think it's 9% on top of the existing 11%...but I do think it's 9% Federal, which then gets state, county, city, and whatever else added to it.

    Without seeing the actual formulas, I'm not sure how they figure an additional $2,000 (I'm assuming beyond what they're forking out for taxes now) for a family making $50,000.

    Anyone know where the 9-9-9 formulas can be found?
     
  5. Salty

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    That 11% - is Blackbird talking about his state/local sales tax?
     
  6. exscentric

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    Cain said the 9 is your withholding rate/tax, then 9 sales.

    Our state income tax is about the same as our federal now. I take it that the 9 does not include fica and other such add ons but do not know for sure.

    Overall guesstimating the sales tax/federal it could triple our taxes plus we still have state income and property/vehicles etc.
     
  7. billwald

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    The devil is in the details. It would lower my federal marginal tax rate to 18%
     
  8. revmwc

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    But what is your income tax rate right now? Plus you get to deduct your charitable contribution from the 9% income tax.
    For me 27% total tax minus the deduction for charitable contributions right now about 28% tax I'd gain +-4%, not bad. Then those who are paying a lot less than I am would be paying an equal share 9% and 9% sales tax sounds good to me. Since Texas has no state income tax that wouldn't figure in, and the state and local sales taxes about 9% so 9% federal income tax minus my charitable deduction and a 9% federal sales tax would would give me a small tax break not too bad.
     
    #8 revmwc, Oct 14, 2011
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  9. revmwc

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    http://www.hermancain.com/999plan

    Right here.
     
  10. revmwc

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    According to the website here is the plan.

    Phase 1 - 9-9-9
    •Current circumstances call for bolder action.
    •The Phase 1 Enhanced Plan incorporates the features of Phase One and gets us a step closer to Phase two.
    •I call on the Super Committee to pass the Phase 1 Enhanced Plan along with their spending cut package.
    •The Phase 1 Enhanced Plan unites Flat Tax supporters with Fair tax supporters.
    •Achieves the broadest possible tax base along with the lowest possible rate of 9%.
    •It ends the Payroll Tax completely – a permanent holiday!
    •Zero capital gains tax
    •Ends the Death Tax.
    •Eliminates double taxation of dividends
    •Business Flat Tax – 9%
    ◦Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.
    ◦Empowerment Zones will offer additional deductions for payroll employed in the zone.
    •Individual Flat Tax – 9%.
    ◦Gross income less charitable deductions.
    ◦Empowerment Zones will offer additional deductions for those living and/or working in the zone.
    •National Sales Tax – 9%.
    ◦This gets the Fair Tax off the sidelines and into the game.

    Phase 2 – The Fair Tax
    •Amidst a backdrop of the economic boom created by the Phase 1 Enhanced Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.
    •The Fair Tax would ultimately replace individual and corporate income taxes.
    •It would make it possible to end the IRS as we know it.
    •The Fair Tax makes our exported goods and services the most competitively internationally than any other tax system.

    Phase 1 Enhanced Plan – Summary
    •Unites all tax payers so we all pay income taxes and no one pays payroll taxes
    •Provides the least incentive to evade taxes and the fewest opportunities to do so
    •Lifts a $430 billion dead-weight burden on the economy due to compliance, enforcement, collection, etc.
    •Is fair, neutral, transparent, and efficient
    •Ends nearly all deductions and special interest favors
    •Ends all payroll taxes
    •Ends the Death Tax
    •Features zero tax on capital gains and repatriated profits
    •Lowest marginal rates on production
    •Allows immediate expensing of business investments
    •Eliminates double taxation of dividends
    •Increases capital formation. Capital per worker drives productivity and wage growth
    •Capital formation will aid capital availability for small businesses
    •Features a platform to launch properly structured Empowerment Zones to revitalize our inner cities
    •We all know the Fed has tripled the money supply since 2008. They have been printing money out of thin air to finance the Obama spending machine. While true Fed reform that restores sound money may have to wait for my election, the best thing we can do now is to pursue policies that increase the DEMAND for dollars to help mitigate the risks associated with the increase in the supply.
    •Pro-growth economic policies equal a strong dollar policy
     
  11. InTheLight

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    Paging Targus....he has a tax background so might be able to shed some light on this.

    Anyway, it's hard to say for sure. In my case it looks like I'd pay slightly more in taxes on my income, and for sure way more in a federal sales tax.

    Here's a starting point to try to figure it out. Pull out your tax return from last year. If you filed a 1040 take a look at line 22. This is your total income. Now take a look at line 60. This is your total tax after deductions and credits are figured in. Divide line 60 by line 22. This is roughly your EFFECTIVE income tax rate. It's amazingly a LOT less than 9%, isn't it?

    But wait, you also pay payroll taxes which Cain's 9,9,9 plan would abolish. So take the number on line 7 and multiply it by 7.65%. Add this result to the number on line 60. This is your payroll taxes paid plus your total income taxes paid. Now divide that by the number on line 22.

    Is this number more than 9% or less than 9%? In my case it came out to 8.8%. BUT, then I'd have to pay a whole new tax of 9% on purchases. Last year, my family spent about $32,000 on consumer goods (not counting mortgage, utilities, tuition, or charitable deductions.) So that would be a fresh $2,880 that I'm not currently paying.

    So I would definitely be paying more under Cain's 9,9,9 plan. Who would pay less? Definitely the wealthy would pay far less.
     
    #11 InTheLight, Oct 14, 2011
    Last edited by a moderator: Oct 14, 2011
  12. revmwc

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    I am no where near wealthy but I would definitely pay less. Did you deduct your charitable contributions from it and do you live in what is called an Empowerment zone? This would reduce your taxes too. A lot a variables to figure into this.
     
  13. mandym

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    I ahve never heard of sales tax so high. Typically it is 6 or 7 percent. I do not believe Cain intended 9 % to be on top.
     
  14. InTheLight

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    Did you look at your 1040 and do the math I suggested?

    Yes.


    No, I do not.

    Too many. But one thing seems certain. The wealthy would get a HUGE tax cut and they would never spend enough to have their personal sales tax of 9% to equal the amount of income tax, capital gains tax, estate tax, and payroll taxes that they are currently paying.
     
  15. revmwc

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    I don't have it with me but I know my bracket and just how much my taxes were at least close enough. I won't be able to do the complete math till I get home in a week or so.

    I know I received a refund from what I paid in but I still had a fairly high tax rate I was in somewhere in a double difgit tax bracket, last year and probaly will be a higher bracket for this years taxes. So I am at the 18% level for income and sales tax will save me some.
     
  16. revmwc

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    Now if the wealthy who provide jobs are able to keep more of their money they will begin to hire folks with the corporate taxes low and income levels will increase, that has been proven over and over again.
     
  17. InTheLight

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    Sorry, but no. Wealthy people's personal income and their corporate spending are two different pots of money.
     
  18. freeatlast

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    This plan will raise taxes not lower them. Also without any restraints on congress all it will do is allow them to spend more. This is not a good plan. By the way a Pastor should have to pay taxes on housing allowances as that is income.
     
  19. targus

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    Cain hasn't been specific enough as far as I am aware to know who will pay more and who will pay less.

    I personally wish that he would drop it because I believe that it will be his undoing.
     
  20. freeatlast

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    Actually that is all he has going for himself and that is DOA. I just hope the people see that 9-9-9 is just a scheme and not a real plan. Just about every other position leans liberal.
     

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