The “Top earners” largely get their money from businesses. IOW the top earners get their money by selling stuff to the low earners.
By shifting the burden from the income side to the spending side you give individuals impetus to not spend money, thereby increasing their own wealth as well as decreasing the income of the top earners.
If you look at the wealth gap, in modern history the smallest wealth gap coincides pretty well with the largest savings rate. People don’t spend as much, save more and cut the top earners income all in one fell swoop.
At the same time it opens opportunities for those now “Saving” to “Invest” further increasing their wealth and income moving themselves closer to the “Top earners”.
Now I’m not saying that any of this would actually happen, but that is how it could possibly help.
He needs a website with a calculator tool that would help you figure out if you come out ahead.
Pat - I’m not picking on you today - really!!
Should the criteria be “do I come out ahead”, or should the criteria be “it makes sense”?
I think it makes sense to look at it to see if you get totally screwed, but isn’t it “better” both in a patriotic way, and in a philosophical way, if we can all look at it and say - yeah, that makes sense and is fundamentally the right way to pay for services. I’m not advocating the 9-9-9 plan (at least in this response), but one of the problems is when a group of people look at something and try to maximize their benefit from public policy (Jeff Immelt and “green energy”, 99%-ers and paying for stuff with other people’s money, and Labor Unions/Corporations gaming the system with the bailouts).
How about we make decisions based on what is “right” for a change (or is this kinda like asking people not to vote for president based on what church he goes to)?
dan
Dan, not taken personally, and it is is a fair question. I don’t know that I have ever heard someone say it is patriotic to pay taxes. I don’t worry about paying high taxes as that also means that my income is increasing. But Obama is calling people rich who are not rich. Well off? Comfortable? Yes, but not rich. I have less real income today than in 1997. Inflation has moved people into higher tax brackets. The cost of living varies widely in the US, but the marginal tax rates are the same for all. So I don’t like his attack on the “rich”.
As for Cains plan, I think you be able to find Independent think tanks coming out for / against any plan saying how it is good or bad.
Some things I like,
All will be forced to pay some sales tax. I was shocked to learn 47% pay no income tax Who thought that was fair.Elimination of payroll taxes help employees and employers. And basically would offset most of the 9% income tax for the working poor. Now if you are poor person on subsidies then you would not be paying an income tax. And many others would have a lower rate when you consider current rate + payroll taxes to the 9% income rateCorporate taxes would be less which should make business more competative and lower prices. This helps poor people the most since they spend the highest portion of the income.Sales taxes would be additive to the poor, but it would incourage savings.at all levels of income. More savings means easier access to money at lower rates. ( i hope they make good loans with this money :))Elimination of the employee side of payroll taxes would also simulate lower prices.One thing I do not like about the plan is I have already paid income taxes on much of my retirement savings. This money will be taxed a second time when I take it out and spend it.
So I think it is going to be difficult to tell who is affected. But I think there are 43% of the country that needs at least some additional taxes to be fair.
Hah. I thought the site would compress it so you wouldn’t get the full length like that. Otherwise I would have done that.
So how do the libs in the room reconcile the above graph illustrating a HUGE tax savings for the top 1% and 0.1% with the oft repeated phrase that the “rich” don’t pay their fare share (which, anyone that has looked at the numbers and reasonably defines fair knows is BS, but I digress).
Hint: you can’t and be intellectually consistent. To get a huge savings, you must first pay huge taxes.
Hint: you can’t and be intellectually consistent. To get a huge savings, you must first pay huge taxes ,and to have huge taxes you must first have huge income.
Fixed it for you.
You can conclude, if you take the graph as fact, that the 999 plan is anti-progressive to some degree. That’s about all. The huge magnitude of the last couple of bars isn’t because it’s hugely antiprogressive (or that current tax code is that hugely progressive), but because of the huge incomes of the households in those bars.
This graph, alone, doesn’t have enough information to take down the libtards with your Chuck Norris nunchucks of intellectual consistency.
Hah. I thought the site would compress it so you wouldn’t get the full length like that. Otherwise I would have done that.
So how do the libs in the room reconcile the above graph illustrating a HUGE tax savings for the top 1% and 0.1% with the oft repeated phrase that the “rich” don’t pay their fare share (which, anyone that has looked at the numbers and reasonably defines fair knows is BS, but I digress).
Hint: you can’t and be intellectually consistent. To get a huge savings, you must first pay huge taxes.
Dan
Hedge fund manager makes a billion dollars in a year, and pays 15%, or 150 million in taxes. Under this plan, he’ll now pay 90 million (assuming that that income is actually classified as income, of course). So instead of keeping 850 million, he gets to keep 910 million. Let’s say we go to the “Fair Tax” where all consumption is taxed at 30%. Say he spends 10 million a month on eligible purchases: he now pays 36 million in taxes.
By shifting the burden from the income side to the spending side…
I would think that you would have people (especially seniors) rushing off to spend their life savings just before the new system goes into effect. Only suckers will hold on to their money at that point.
At the same time it opens opportunities for those now “Saving” to “Invest” further increasing their wealth and income moving themselves closer to the “Top earners”.
Or at least it opens opportunities for them to feel more wealthy. They really won’t be, of course, since they’ll have to pay higher taxes on the back end. (Or they can leave the wealth for their heirs and let the heirs pay the taxes on the back end.) From the politicians’ point of view, though, I suppose it’s only the perception that matters.
It seems as if everyone here is focusing on the last “9” in the plan, the sales tax. The middle “9” is a business tax, and reportedly it’s more akin to a VAT than a corporate income tax. One of the well-known effects of a VAT is that it encourages the vertical integration of industry. (If stages of production are combined vertically, the total tax burden is reduced.) If you love the “too big to fail” behemoths, this plan would be the way to go.
Just think of all the jobs that will be created by that top .1%! Win-win, for sure.\
I’ve never been hired by a poor man or a company losing money. Who do you think are going to create jobs in the US? Not the 43% not paying Federal Income Tax.
I would think that you would have people (especially seniors) rushing off to spend their life savings just before the new system goes into effect. Only suckers will hold on to their money at that point.
Yes I was speaking purely of the conditions after the tax change had taken place.
Or at least it opens opportunities for them to feel more wealthy. They really won’t be, of course, since they’ll have to pay higher taxes on the back end.
I disagree with this.
If a person goes out and spends every dime they make they have no opportunity to garner any wealth. If they save they will not only increase their wealth but will decrease the amount of money going to the people that were previously getting it, thereby likely decreasing those individuals wealth.
The fact that the tax is no longer on the income and has been transferred to the spending side gives more incentive to income side and less to the spending side. I think we can pretty much agree that the US typically doesn’t error on the side of not spending enough
From the politicians’ point of view, though, I suppose it’s only the perception that matters.
From a revenue standpoint, I would agree 100%, doesn’t matter. That being said,assuming we can’t live with less revenue, I strongly believe some forms of tax are superior to others. Sales tax being superior to income tax, IMO, not much, but still superior as it allows the choice of whether to spend or save. You really don’t have the choice of whether you want ANY income or not as you have to have some to survive thus everything you make will be taxed.
Just think of all the jobs that will be created by that top .1%! Win-win, for sure.\
I’ve never been hired by a poor man or a company losing money. Who do you think are going to create jobs in the US? Not the 43% not paying Federal Income Tax.
Funny how jobs kept getting created a decade ago when the top rates were higher, and then decades before when the top rates were even higher, and way back when top rates were 70-90%. Yet, it’s the taxes that are preventing the “job creators” from doing their jobs.
Ok can someone explain to me how the top 1% will pay on average 238,422$ less when their income tax paid on average in 2008 was 280,185$? Same question for the top .1% when their average income tax paid was 1,357,142$ in the same year?
Considering that income tax includes capital gains, and income tax that would have to go to zero for these people and then they would have to not spend a single dime in order to even come close to these numbers.
What am I missing here?
The reason this popped into my mind is that the cut off for the top 1% was ~380K income in 2008…I’m. Pretty certain someone making that kind of money ISN’T paying 238K in taxes and I’m also certain there are more people making 380K than their are 10Million which would weight this toward the low side.
I’ve never been hired by a poor man or a company losing money.
I’m pretty poor and I’ve hired people. Hell I’ve had several years where people working for me made more money that I did…welcome to manufacturing and small business in the US.
Just think of all the jobs that will be created by that top .1%! Win-win, for sure.\
I’ve never been hired by a poor man or a company losing money. Who do you think are going to create jobs in the US? Not the 43% not paying Federal Income Tax.
Don’t be foolish. This is one of Sean Hanity’s favorite lines. Unfortunately it is a non-sequitor in this discussion and the basis for many-a straw-men arguments.
This is a consumer economy. Poor people spend money. That money is paid to firms that hire workers. No, a poor person doesn’t employ people directly, but MANY businesses would cease to exist if poor people didn’t spend money, or spent less.
The fact that the tax is no longer on the income and has been transferred to the spending side gives more incentive to income side and less to the spending side.
Sorry, but I don’t see that. If I pay x% tax on the income today, the effect isn’t significantly different from not paying the tax today, saving it, and then paying the same x% on the savings + earnings down the road. There’s a slight difference in that the earnings (if they are positive) might compound faster in the latter case, but it’s really not that different, other than that I might enjoy the illusion of being richer than I really am (at least if I close my eyes to the reality).
Of course, the reality in my age bracket is that I already paid the x% tax on the income and will pay it again later if Cain gets his way–unless, of course, I go on a spending spree before he gets into office. From my point of view, Cain is replacing a tax on income with a tax on wealth. He should get along marvelously with the OWS crowd.
