Currently the top-picked Republican flavor of the week, Herman Cain has been turning heads with his signature 9-9-9 plan: a temporary federal tax code that will consist of a 9% sales tax, a 9% income tax, and a 9% business transactions tax. By the way, the sales tax would be in ADDITION to the state's sales tax.
But first, Cain would cut individual and corporate tax rates from 35 percent down to 25%. And then finally, all the taxes (even the 999) would be replaced by a national sales tax, aka "A Fair Tax."
Personally, though I'm for a new tax plan, this isn't the right solution to me. First off, America has a pretty big debt already, and this plan wouldn't cover all of our needed revenue. (We'd be off by about, oh, only $200 billion dollars or so.) Plus, this plan would basically suck the middle/lower classes dry between the national and state taxes. (These two classes are shown to spend more of their money on purchases rather than savings.) And while Cain is promising tax cuts, the cuts will only really affect the rich, and leave more to be desired to the not so rich.
to educate yourself about this plan: http://www.washingtonpost.com/blogs/fact-checker/post/herman-cains-misleading-pitch-for-the-999-plan/2011/10/12/gIQAHszPgL_blog.html
I totally agree. Not to mention the fact that kids (like me) that are paid in allowance, not wages, would be be hurt by the massive sales taxes. I don't know how big a part of the economy we make up, but based on how many middle schoolers are always at Reston Town Center, I'd say at least something noticeable.
ReplyDeleteThe other thing is I think the effect of sticker shock would be more damaging to the economy than raising income taxes would be. Income taxes you would get used to, but a 14%+ sales tax would be a slap in the face everytime you bought something.