Would you pay less or more under Herman Cain’s 9-9-9 plan? This plan includes a 9% national sales tax, a 9% business income flat tax, and a 9% individual income flat tax.
The answer, according to the nonpartisan Tax Policy Center, is that most of us would pay more under Cain’s plan than the current system. About 84% of all households would feel a bigger tax bite. CNN Money digested the report, and provided the basic facts. Here are some of them.
Poor households would be hit hard by 9-9-9, unless there are some serious modifications to the plan—but then modifications and revisions start to complicate the simplicity of a flat tax system. Under the current system, poor households pay no federal income tax. Under Cain’s proposal, households making less than $30,000 per year may see as much as 20% less take-home pay than they would under the current system.
At the other end of the income scale, affluent Americans would have more money to take home under 9-9-9. Households with annual incomes of $200,000 or more could bring home as much as 22% more. Almost all households making over a $1,000,000 a year would get a whopping tax cut of almost one-half million dollars on average.
The Tax Policy center says that 9-9-9 would not raise more revenue than the current system does. What it does do, in effect, is raise taxes on the poor and lower taxes on the rich. But flat-tax proposals continue to have allure.
Is it because they offer simplicity and efficiency?
Make it easy in April to file your taxes?
What do you think is so attractive in these flat-tax proposals?
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Originally published at www.OurValues.org, an online experiment in civil dialogue on American values.