October 16th, 2011 10:18 EST
Is Herman Cain's 9-9-9 Plan Good for America?
GOP party members are gushing over Herman Cain since his campaign has seen more support from Republican voters in the polls. His radical tax reform plan known as 9-9-9, has been the object of both admiration and ridicule. While some supply side economists are billing it as American`s way back to financial health, many other economists are criticizing the plan as another hit on middle and lower class Americans. While Cain`s people claim that Americans will pay less tax with his plan, in reality, the tax burdens on most Americans will be increased.
The 9-9-9 plan is a three-step plan which starts with individual and corporate taxes being cut to a top 25 percent which is down from the current 35 percent. The second step is the 9-9-9 where temporarily the government would enact 9 percent income tax, a 9 percent business transactions tax and a 9 percent "federal sales tax" that federal sales tax goes on top of each individual state sales tax. The final step to this plan is that all taxes including the 9-9-9 will be replaced with a flat tax for everyone.
So, what is the danger of this plan? Well, first off there is controversy over how much revenue this radical plan will generate? Obviously with Pro-Cain people estimate more revenue than Anti-Cain people, and those opposed argue that it will fall far short of the $2.3 trillion that Cain`s campaign maintains it will generate. But, the big question most Americans want to know is how it affects their pocketbooks. With so much attention on the Wall Street Protestors and the annihilation of the middle and lower classes by the Financial Services industry, Americans don`t want to sign on for something else that is going to beat them further into the ground.
Both conservative and liberal economists have voiced concern over this plan. First off, this three-prong plan, which completely does away with the tax system, must be completed within Cain`s first term as president. That is a lot of change in three to four years. Secondly, there is the argument that in the long run, the rich would get a tax cut and the poor and middle class would watch their tax bills increase and their costs of everyday living increase with a huge sales tax increase.
One of the big reasons why most of America would be harmed is that the current tax code allows taxpayers a series of deductions, the earned-income tax credit and exemptions to ease their tax burden. Those deductions and exemptions and credits would be wiped away by Cain`s plan.
On the other hand, the wealthy or those in the 28 percent bracket or higher - would receive a tax gift since as part of Cain`s plan the Estate taxes and Capital Gains taxes, which usually involve the wealthiest of Americans, would be eliminated.
While tax reform is a topic that many Americans would want to consider, it is a complicated and unfortunately, politically motivated issue. There are too many questions with Cain`s plan for Americans to jump on the bandwagon. The 9-9-9 plan might just add up to more misery for the America who is not in the elite one percent.