Cain's Ten Minutes in the Hot Seat

This was the first debate with Herman Cain at or near front-runner status and it showed. Right out of the gate the questions and the other candidates challenged his 9-9-9 plan.

Here he is defending it:

The thing that I would encourage people to do before they engage in this knee-jerk reaction is read our analysis. It is available at hermancain.com.

[...]

I invite people to look at our analysis, which we make available.

Secondly, the -- the point that he makes about is a value-added tax -- I'm sorry, Representative Bachmann -- it's not a value-added tax.

[...]

And I invite every American to do their own math, because most of these are knee-jerk reactions. And we do provide a provision, if you read the analysis, something we call opportunity zones that will, in fact, address the issue of those making the least.

[...]

Once again, unfortunately, none of my distinguished colleagues who have attacked me up here tonight understand the plan. They're wrong about it being a value-added tax.

The value-added tax question hasn't gone away and it hasn't gone away because Cain never explains why his proposed business flat tax is not one. He just sends people to his website.

To the limited extent he tried to argue the issue, Cain gave the misleading impression that when candidates and commentators question his proposed VAT that they're talking about his retail sales tax. Here he is:

Secondly, it is not a value-added tax. If you take most of the products -- take a loaf of bread. It does have five taxes in it right now. What the 9 percent does is that we take out those five invisible taxes and replace it with one visible 9 percent.

So you're absolutely wrong. It's not a value-added tax.

This explanation is no explanation at all. Folks aren't calling his retail sales tax a VAT. They're calling his corporate flat tax a VAT. Here's Santorum and then Bachmann explaining why:

[Santorum:] [Y]ou have a sales tax and an income tax and, as Michele said, a value-added tax, which is really what his corporate tax is, we're talking about major increases in taxes on people.

[...]

[Bachmann:] But Anderson, how do you not have a value-added tax? Because at every level of production you have a profit, and that profit gets taxed, because you produce one portion at one level, and then you take it to the next supplier or vendor at the next level, and you have an exchange. That is a taxable event.

And ultimately, that becomes a value-added tax.

Bachmann is talking about exactly what we've been talking about here for a week. Cain's corporate tax, which is calculated by taxing gross sales less purchasing costs, investments, and deductions, is a VAT because the tax falls on only the part of the sales that is "value-added." And that compounds, as Bachmann explained, at every supplier or vendor until the final sale (where the 9% retail sales tax will get another bite of it).

And while we're talking about it, here's 9-9-9 plan architect Steve Moore having second thoughts:

I love the idea [of a 9 percent national sales tax]. As you know, Art Laffer and I helped design the plan. But Ive come to the conclusion that the American people and the voters do not want a national sales tax. Hes going to have to replace that national sales tax with a 9 percent payroll tax. And if you do that its a total winner.

A 9 percent payroll tax on top of the proposed 9 percent wage tax? Every small business in America just cried out in terror.

Posted by: Gabriel Malor at 07:45 AM



Comments

1 So why aren't current corporate taxes considered VAT now?

Posted by: Darel Finkbeiner at October 19, 2011 07:48 AM (Z1WKS)

2 9-9-9 is a tax, not an economic plan. It's gimicky and shows that he is another that doesn't get that big government is the problem. The problem isn't how to pay for big government.

Posted by: dogfish at October 19, 2011 07:50 AM (fq8K1)

3 So why aren't current corporate taxes considered VAT now?

Posted by: Darel Finkbeiner
.........
Because they are only taxing profits.

Posted by: Chi-Town Jerry at October 19, 2011 07:51 AM (UTq/I)

4 About the only one who said something reasonable about taxes was - gasp - Ron Paul!!!111!

Huge applause line, but then he fell on his head and had to contact the mother ship.

Sheesh. Where's Newt?

Posted by: J.J. Sefton at October 19, 2011 07:51 AM (UlUS4)

5 So why aren't current corporate taxes considered VAT now?

Because they're not calculated by taxing only the value-added portion of gross sales. They're calculated, generally, by taxing gross income less all expenses.

Posted by: Gabriel Malor at October 19, 2011 07:53 AM (XVaFd)

6 the taxes now are vat taxes

Posted by: ✡phoenixgirl occupying my kitchen at October 19, 2011 07:53 AM (eOXTH)

7 1
So why aren't current corporate taxes considered VAT now?

Posted by: Darel Finkbeiner at October 19, 2011 07:48 AM (Z1WKS)

In a way they are, that's why any corporate tax is stupid. Difference is, as of now we're only paying on corporate profits.

Posted by: lowandslow at October 19, 2011 07:54 AM (GZitp)

8 2 9-9-9 is a tax, not an economic plan.
Posted by: dogfish


Agree. He sells it as revenue neutral. I would love to simplify the tax code but for goodness sake we have a real spending problem in DC. Where does he address that?

Posted by: macintx at October 19, 2011 07:54 AM (ucs8Y)

9 I have one question for all those who whine about Cain's proposal:

What other candidate has bothered to craft any kind of meaningful alternative?

I suppose RuPaul has, but it's mixed in with a load of totally unpalatable bullshit.

Yes, I wish Cain would hammer more on spending, which is the nut of the problem, but the usual platitudes from the "mainstream" candidates mean nothing. Or less.

If Cain has really been as personally successful as it appears, he will have long since learned that if a plan doesn't work, you adjust/refine/replace it. No one gets to his achievement level without knowing that.

But this seems to be the year that conservatives act like a bunch of friggin' liberals, shooting each other down and wasting time on cheap shots while substance goes right out the window.

The ONLY reason I'm defending Cain is that he offers something fresh and new, which is real-world experience. Yet everyone takes pot-shots at him instead of proposing something better.

He is on my short-list, despite the grumbling from the "pundits" and the jabs from rivals who think the road to the White House is paved not with their achievements, but with the bodies of those they bested in a bunch of debates run by people who despise all conservatives.

And Osama Obama is still a stuttering clusterfuck of a miserable failure and thus is the Main Enemy. I wish people would remember that.

Posted by: MrScribbler at October 19, 2011 07:54 AM (YjjrR)

10 As I said, this plan is killing him with most of the base. Personally I write it off as not possible to be passed.

Posted by: Vic at October 19, 2011 07:55 AM (YdQQY)

11 Good analysis from Gabriel.
I like Herman Cain. He believes what I believe. He can articulate it in a way that differentiates him from the others, and makes them look kind of phony.
9-9-9 is horrible. But no more horrible than our current illiberal tax code. However. I am not here to defend 9-9-9, but to bury it. There is no possible way, under any circumstance, that it becomes law. There is too much power inherent in the power to tax, and to not tax, for such a simplification to happen.
Therefore I am not worried about 9-9-9. It is a mathematical artifact, not a potential law.

Posted by: Truman North, obvious racist at October 19, 2011 07:57 AM (I2LwF)

12 Posted by: MrScribbler at October 19, 2011 07:54 AM (YjjrR)

I still like Cain because he at least put something out there that is more or less tangible, even though it may be unrealistic and impossible to actually implement. Refine tune tweak!

Posted by: Hrothgar at October 19, 2011 07:57 AM (i3+c5)

13 What other candidate has bothered to craft any kind of meaningful alternative?

Have you read my 347,588-point plan to get Americans back to work?

Posted by: Mittens! at October 19, 2011 07:57 AM (s7mIC)

14 >> A 9 percent payroll tax on top of the proposed 9 percent wage tax? Every small business in America just cried out in terror.

Oh, it's worse. Everybody including Cain agrees that the right way to look at the current payroll tax is to view both the employee and employer half (15.3% in total) as falling entirely on the employee because, in theory, if the company didn't have to pay the employer taxes, it would be able to pay the employee higher wages.

Since it doesn't allow a deduction for employment costs, the 9% tax in Cain's business flat tax/VAT has to be viewed the same way.

9-9-9 is, basically, a 27% direct tax on employment from dollar one.

This is why Steve Moore can so easily view a 9% payroll tax as being interchangeable for the 9% sales tax. They are.

Posted by: Andy at October 19, 2011 07:57 AM (z6jMn)

15 Plus Cain championed this plan as getting the economy moving, I don't see how it does.

Posted by: lowandslow at October 19, 2011 07:58 AM (GZitp)

16 Posted by: MrScribbler
..........
Yeah.. kudos to Cain for at least trying. It's a bold plan.

But even the briefest look at the plan beyond the simple catchphrase of 9-9-9 shows you it's a miserable, unworkable plan. There's no tweaking.. no refining.

Posted by: Chi-Town Jerry at October 19, 2011 07:58 AM (UTq/I)

17 If we are ultimately going to have to hold our noses and forgive Mitt
for RomneyCare and flipflopping on every social issue under the Sun; or
Perry for once being a Dem, Gardisil and and alien college tuition; or
Cain for being an unsophisticated, lisping tax fiend; then why can we
not forgive Newt's marital transgressions and that stupid commercial
with Nancy Pelosi?

Dude is the only intelligent, qualified candidate in the race.

Posted by: GOP Heterodox at October 19, 2011 07:59 AM (qNuEj)

18 The ONLY reason I'm defending Cain is that he offers something fresh and new, which is real-world experience.

Both Mitt Romney and Bachmann have that too.

Posted by: chemjeff at October 19, 2011 07:59 AM (s7mIC)

19 13 What other candidate has bothered to craft any kind of meaningful alternative?


Perry coming out with a tax plan later this week. I think real possible he goes for a flat tax.

Posted by: macintx at October 19, 2011 07:59 AM (ucs8Y)

20 Every tax is a tax on employment from dollar one. That's what tax is-- an extraction of wealth from producers.
Let me contrast it with the 35% corporate tax we have now.

Posted by: Truman North, obvious racist at October 19, 2011 08:00 AM (I2LwF)

21 phoenixgirl has it exactly right....

ALL corporate taxes are based on receipts minus the business' costs. That's pretty much the very definition of profits. To say otherwise is to either: a) completely dishonest, or b) wildly mistaken.

If Cain's plan is a VAT, then so is the current code and so are all the candidate's corporate tax plans.

And the attacks on Cain from some of the candidates were completely dishonest: they - especially Romney - intentionally conflated state sales taxes with a federal sales tax. He knew better than that tripe he was hustling last night. It actually made my wife extremely angry: if you have a legitimate argument to make, then make it. But all Romney, most especially, did with his rank dishonesty was to show why 75% or more of the Republican party wants anyone EXCEPT Romney as the nominee.


Posted by: Jim_B at October 19, 2011 08:00 AM (QD3//)

22 Oh, it's worse. Everybody including Cain agrees that
the right way to look at the current payroll tax is to view both the
employee and employer half (15.3% in total) as falling entirely on the
employee because, in theory, if the company didn't have to pay the
employer taxes, it would be able to pay the employee higher wages.



Posted by: Andy
..........
In theory.. in practice, the employer's share might well stay in the employer's pocket.. or pay for another new employee.

Posted by: Chi-Town Jerry at October 19, 2011 08:02 AM (UTq/I)

23 Newt ain't running for President, he's in it for exposure and to maintain political relevancy. He has no caimpaign except these debates.

Posted by: lowandslow at October 19, 2011 08:02 AM (GZitp)

24 >> Because they are only taxing profits.

This.

The current corporate tax is applied to net income (not GAAP net income, but net income as calculated under thousands of pages of tax rules).

Cain's business flat tax isn't an income tax by definition. Hell, even he doesn't call it one.

In the beginning, I was pretty excited about it because it sounds like he's simply taking the corporate rate from 35% to 9%, which would kick ass. But this is not the case.

Posted by: Andy at October 19, 2011 08:02 AM (z6jMn)

25 Who gives a shit.

Posted by: soot at October 19, 2011 08:04 AM (dVBif)

26 This is why Steve Moore can so easily view a 9% payroll tax as being interchangeable for the 9% sales tax. They are.

Not entirely. The payroll tax comes out no matter what. The sales tax only comes out when the consumer purchases something. Any money the consumer saves or invests would not be taxed by the sales tax.

Posted by: Iron Balls McGinty at October 19, 2011 08:04 AM (Gkhxf)

27 >> 9-9-9 is horrible. But no more horrible than our current illiberal tax code

I disagree.

Adding a national retail sales tax without repealing the 16th amendment is a recipe for disaster.

Posted by: Andy at October 19, 2011 08:05 AM (z6jMn)

28 Pssst....Herman Cain is still a demonstrableignoramus about foreign policy regardless of how we here in the moronosphere define VAT.

Posted by: Circa (Insert Year Here) at October 19, 2011 08:05 AM (B+qrE)

29 Okay, so Cain's plan is not a VAT in the strictest sense of the word. But the real issue is why we conservatives oppose a VAT in the first place - because it is a tax that is easily raised by government without consumers directly feeling the pinch. Cain's flat corporate tax shares this same quality as a traditional VAT does. Don't get lost in the semantics here.

Posted by: chemjeff at October 19, 2011 08:05 AM (s7mIC)

30 Posted by: macintx at October 19, 2011 07:59 AM (ucs8Y)
I think so, too. Now that Cain has opened the door to deliberative thought on alternative tax structures, I think Perry will get some traction with the idea ... he telegraphed it last night, saying we don't nine 999 or 59 points or whatever, just a tax structure that is "flatter and fairer."

Posted by: GOP Heterodox at October 19, 2011 08:06 AM (qNuEj)

31 The other really dumb thing about a federal sales tax is the bureaucracy it would require. Think about it.. every sale - even business to business- would have to have a new sales tax added to it and along with it a whole new reporting mechanism. It would probably require tens of thousands of new federal workers just to keep track.

Posted by: Chi-Town Jerry at October 19, 2011 08:06 AM (UTq/I)

32 re: Cain's responses...check a dictionary under "stonewalling".

What it also looks more and more like to me is that Herman Cain doesn't understand what his old plan does or how it would work. It's a "plan" that looks more and more like a zippy campaign slogan that was presented as an economic plan, and his advisors apparentl told him all he needed to do was repeat 9-9-9 and his web site address over and over again and the lacking (and disturbing) details wouldn't matter.

I wish folks would stop projecting their idea of who they would like to vote for onto Cain and take a look at the real, painfully underqualified guy he actually seems to be. Projecting what your own idea of an "ideal president" should look and sound like is how we got the SCoaMF who is in the White House now, in case anyone has forgotten.

Posted by: davidinvirginia at October 19, 2011 08:06 AM (haFNK)

33 Way to get bogged down in minutiae.

And this is why we lose to Democrats.

Posted by: soot at October 19, 2011 08:06 AM (8dspl)

34 He has no caimpaign except these debates.

Well, he also spams my emailbox. So Newt is relying on debates and spam.

Posted by: chemjeff at October 19, 2011 08:07 AM (s7mIC)

35 andy

that is where he loses me.....because the repeal is the 2nd step.....not the 1st step

Posted by: ✡phoenixgirl occupying my kitchen at October 19, 2011 08:09 AM (eOXTH)

36 Fairtax.org
It was such a good plan. Stolen and bastardized. Its death probably means the Republic is lost since it seems we've forever redefined fair as the more your earn the bigger bite of each dollar you must hand to the leviathan.

Posted by: Scott J at October 19, 2011 08:09 AM (Ip8Ph)

37 I really wish Cain had stuck with the FairTax, it's what he prefers anyway and he can explain it well.

Posted by: Jose at October 19, 2011 08:10 AM (WTNJJ)

38 So Newt is relying on debates and spam.


Posted by: chemjeff at October 19, 2011 08:07 AM

Wait -- you mean he's no longer a daily visitor to Hannity's show? I hope whatever-her-name-is -- you know, The Newt's current wife -- can suck his toes as well as Sean did.

Posted by: MrScribbler at October 19, 2011 08:11 AM (YjjrR)

39 as I've said Cain's 9-9-9 plan is going to sink him as quick as he was boosted by it. Cain was effective in his rise because he didn't go after other candidates, he just spoke on how he would run things - something I like about Cain. However w/ now more folks taking a more detailed look at the plan, the negatives will come out.
Perry's strong performance last night (well I thought it was strong, I woke up to talk radio guys saying he was too forceful) will take back some supporters who ran to Cain. His performance made me switch back to neutral afterall so I think it did have an effect on undecideds like me.
Romney is still ok as moderates still refuse to back Hunstman and split the vote amongst him and Romney (and btw I find Huntsman to be a bigger "RINO" then Romney). Plus Romneybots (polynikes, etc.)and squishes (Jeff B., etc)seem to be still on his side and are demanding apologies from Perry so he's still got his base sewn up.
if this doesn't start a Perry comeback nothing will.
Cain could have begun a slide back to backbencher yesterday.
Romney is fine and still on cruise control towards the nomination but he started cracking in his Godly armor last night.

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:12 AM (yAor6)

40 So Newt is relying on debates and spam.
And intelligence, experience and policy analysis. I know he won't win the nomination but what a waste.

Posted by: GOP Heterodox at October 19, 2011 08:12 AM (qNuEj)

41 So why aren't current corporate taxes considered VAT now?

Because
they're not calculated by taxing only the value-added portion of gross
sales. They're calculated, generally, by taxing gross income less all
expenses.

Cain's proposal taxes gross income less some expenses; it isn't a VAT. The only major differences between the current business income tax and Cain's proposed income tax is there are a lot fewer deductions, the rate is 9% instead of 15-35%, and it's a lot more transparent. The compliance costs to businesses will be lower and collection and enforcement costs to the government should be lower.

Cain's plan gets rid of payroll taxes, so depending on how you think that affects business that may be significant as well.

However, the current business tax does have the negative VAT-like properties conservatives don't like. Taxes are charged at each step along the way as each company pays its income tax, and that is passed on in the price of goods, and the taxes in the sale price of a good are hidden.

Posted by: lumpy at October 19, 2011 08:12 AM (jhSVI)

42 Pssst....Herman Cain is still a
demonstrableignoramus about foreign policy regardless of how we here in
the moronosphere define VAT.

Posted by: Circa (Insert Year Here) at October 19, 2011 08:05 AM (B+qrE)
And there's that, too. As troubling as his refusal (or inability) to defend his 9-9-9 this is, the fact that he seems to have not bothered to be even mildly curious about anything related to national security or geopolitics for his entire life is even more disturbing to me. Not being an expert of such things is fine, but to sound as if you have not the vaguest idea of how terrorists think and operate? After 9-11 and all the rest? This guy is so not ready for prime time.

Posted by: davidinvirginia at October 19, 2011 08:14 AM (haFNK)

43 So why aren't current corporate taxes considered VAT now?

Posted by: Darel Finkbeiner at October 19, 2011 07:48 AM (Z1WKS)
they aren't taxing labor?

Posted by: willow at October 19, 2011 08:15 AM (h+qn8)

44 I have one question for all those who whine about Cain's proposal:What other candidate has bothered to craft any kind of meaningful alternative?I suppose RuPaul has, but it's mixed in with a load of totally unpalatable bullshit.Yes,
I wish Cain would hammer more on spending, which is the nut of the
problem, but the usual platitudes from the "mainstream" candidates mean
nothing. Or less.If Cain has really been as personally
successful as it appears, he will have long since learned that if a plan
doesn't work, you adjust/refine/replace it. No one gets to his
achievement level without knowing that.But this seems to be the
year that conservatives act like a bunch of friggin' liberals, shooting
each other down and wasting time on cheap shots while substance goes
right out the window.The ONLY reason I'm defending Cain is that...


Sorry, you're out of time.

Posted by: Rick 'The Timekeeper' Santorum at October 19, 2011 08:17 AM (qzhcw)

45 Cain used to be a proponent of the Fair tax and now has his 999 plan.
I'm not onboard with the vat-ish aspect of 999.
He ought to come up with something simple and easy to understand.

For example, Cut the corporate tax rate, cut the capital gains tax, bump payroll taxes down to the next lower tax bracket, and amnesty for the trillions of dollars hiding from the taxman overseas.



Posted by: Willy at October 19, 2011 08:17 AM (gDszm)

46 Seems to me that repeal of the 16th is where you start. Then a flat consumption (sales) tax so that it is readily visible even to the OWS crowd. Any change in the rate is also quite visible and theoretically you can votes the bastids out.

Unfortunately, the effect still seems VAT-like to me since it occurs at each point of sale

Posted by: Hrothgar at October 19, 2011 08:18 AM (i3+c5)

47 gah, if a home is built,
the ones that make the tress's pay for the wood and the men to plane it.
it goes to the builder , where the men are paid to cut and build walls,roofs etc.
same with every proccess, the pipe the electric, etc
i still don't get where Vat isn't

Posted by: willow at October 19, 2011 08:18 AM (h+qn8)

48 I love the idea [of a 9 percent national sales tax]. As you know, Art Laffer and I helped design the plan.
Isn't Art Laffer like 98 years old?

Posted by: dagny at October 19, 2011 08:19 AM (qX6ua)

49 Why are we asking our Presidental candidates about their views on tax policy? It is a simple question, will you veto or faithfully execute the Ryan plan ( or Rand's, etc.) as President. Its like we are interviewing a job as a chef, by asking them to make change at the register.

Posted by: Jean at October 19, 2011 08:20 AM (pawS5)

50 Another thing that bothers me about Cain since he locked into the 9-9-9 thing nonstop...does he ever talk about cutting spending anymore? If he does, I never see it mentioned anywhere. Just these new taxes that might/maybe/someday replace some of our old taxes.

Posted by: davidinvirginia at October 19, 2011 08:20 AM (haFNK)

51 Posted by: Rick 'The Timekeeper' Santorum at October 19, 2011 08:17 AM (qzhcw)
Oh God Rick becomes a bigger dick with every passing debate, I want to slap his arrogant ass just as much as Paul or Huntsman
I cannot believe he mentioned winning elections in PA when he lost that seat in a landslide worse then McCain lost the 08 electoral votes there

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:20 AM (yAor6)

52 every sale - even business to business- would have to have a new sales tax added to it

This seems like bad info, Jerry. Cain's sales tax is modeled on the Fair Tax, which is a retail sales tax. Can you point me to where he says businesses-to-business sales would also have a sales tax?

Posted by: lumpy at October 19, 2011 08:20 AM (jhSVI)

53 The Cain demise has begun. He was the anti-Perry for those who needed one, and now they will tear his ass apart so that Romney gets the nomination. The only solace is that Romney probably does have the best chance of defeating Obama. That said, he damn well better show up with the same vigor and aggressiveness in the general as he's shown here in the run-up to the primaries.

I live in Texas, which is so red it doesn't really matter whether I vote. So if the nominee is Romney I may as well just stay at home watch it on TV. I hate that lying peckerwood that much and don't want any part of this fiasco. At this moment in history the beat we can come up with is a dishonest Northeastern liberal. God.

Posted by: GOP Heterodox at October 19, 2011 08:21 AM (qNuEj)

54 where is a form based on this that i can do my taxes on?

Posted by: ✡phoenixgirl occupying my kitchen at October 19, 2011 08:22 AM (eOXTH)

55 And btw, how can debate after debate go by w/o any of our guys raising 2nd Amendment rights and Fast Furious?

Posted by: GOP Heterodox at October 19, 2011 08:22 AM (qNuEj)

56 so is cain saying there is only a tax added at the end of the finished product?
what if the product went through several hands with labor and process's machinery that also were bought and tax'd?

Posted by: willow at October 19, 2011 08:22 AM (h+qn8)

57 Can you point me to where he says businesses-to-business sales would also have a sales tax?

Posted by: lumpy at October 19, 2011 08:20 AM (jhSVI)
If business to business sales are not taxed, you have the IRS rules and regulations department defining tax law in yet another creative way. What's a business? What constitutes a true b2b sale?

Posted by: Hrothgar at October 19, 2011 08:25 AM (i3+c5)

58 9-9-9 is a piece of shit. Herman Cain is a likeable guy, but he's not ready for prime time. Give me Romney or Gingrich any day.

Posted by: packsoldier at October 19, 2011 08:26 AM (jMmrk)

59 Posted by: GOP Heterodox at October 19, 2011 08:22 AM (qNuEj)

Shhhh!

Posted by: Eric Holder of the Bag at October 19, 2011 08:26 AM (i3+c5)

60 Think about it.. every sale - even business to business- would have to
have a new sales tax added to it and along with it a whole new reporting
mechanism.

I don't think that's right. Cain's sales tax is a retail sales tax.

Posted by: Gabriel Malor at October 19, 2011 08:28 AM (XVaFd)

61 even Neal Boortz who has been an avid supporter of Cain admits he might not vote for him

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:28 AM (yAor6)

62 Hrothgar, I think you start by ending withholding. Then, after two years of the taxpaying public enjoying the benefits of a benevolent, protective government AND understanding the costs - we can have a proper debate about the value of government in the legislative contests across the country (hopefully civilly). Those representatives and senators, after listening to the will of the people could, at that point, determine a new revenue regime.

Posted by: Jean at October 19, 2011 08:28 AM (UIE9v)

63 There is a difference between commonplace and common sense and when I hear Cain talking, I hear more of the former than the latter.I noticed that there was something wrongwith Cainwhen he was asked, if giving the feds an additional tax to raise wouldnt mean running the risk of ending up with aneven higher tax burdenthan wegot right now. And he said simply no, he didntexplain why thatwould not happen or argue his case, he just said no and that was it.Same in yesterdays debate. A candidate should bring more to the table than theurl of his website. If thats the kind of communication skills Republicans want to settle for than we can nominate Perry justas well.
Cain is likable, but too shallow to be taken seriously.

Posted by: Elize Nayden at October 19, 2011 08:28 AM (i4gLS)

64 Oh God Rick becomes a bigger dick with every passing debate, I want to slap his arrogant ass just as much as Paul or Huntsman
I cannot believe he mentioned winning elections in PA when he lost that seat in a landslide worse then McCain lost the 08 electoral votes there
He does that all the time like either people don't know or are going to forget that he lost that race. I heard some radio guy challege him on that and he carefully explained how that one didn't matter.
I can't quite figure out why he irritates the shit out of me, but he does. I want to pinch him. In a mean way.

Posted by: dagny at October 19, 2011 08:28 AM (qX6ua)

65 so is cain saying there is only a tax added at the end of the finished product?
This is my problem in a nutshell, willow. I don't think Cain knows what Cain is saying.

Also interesting is today's tidbit that Laffer helped design this plan. Just a few days ago we were supposed to ooh and aah that Laffer supported it (and Cain implicitly) as some independent arbiter. And now it turns out he helped devise it? I call hijinks.

Posted by: GOP Heterodox at October 19, 2011 08:29 AM (qNuEj)

66 I am the corporation, my next tshirt venture.

Posted by: Jean at October 19, 2011 08:29 AM (UIE9v)

67 As others have said, by your definition, the corporate income tax we currently have is a VAT tax. Cain wants to reduce it to 9%. Sure there are more loopholes and gimmicks in the code now and a much higher rate. Why not get rid of all of the schemes and kickbacks conceived by politicians and corporate lobbyists and lower the rate? Do you really prefer a huge lobbying industry and a huge tax compliance industry? I prefer simplicity and lower rates with a reduction in the waste of money spent on compliance. I know if you are an IRS agent, CPA, or work for H&R Block, you shutter at this idea. Otherwise, you should be for it.

Posted by: TimisKim at October 19, 2011 08:31 AM (C3AD4)

68 Posted by: Jean at October 19, 2011 08:28 AM (UIE9v)
Repeal of withholding is an excellent place to start.

Posted by: Eric Holder of the Bag at October 19, 2011 08:31 AM (i3+c5)

69 you guys just vote for Mitt, he's so dreamy

Posted by: Jen Rubin at October 19, 2011 08:32 AM (yAor6)

70 What gets me is that of all the MANY things for which one could dismiss Herman Cain, Gabe decides to redefine VAT as income-based, versus transactional profit-based.

Fucking retarded.

Pick a real gripe. You're pissing all over your dwindling stock of credibility.

Posted by: Empire of Jeff at October 19, 2011 08:32 AM (l9zgN)

71 I think when it's all said and done, i'd be shocked if this debate didn't have an effect one way or the other. i'll be looking for post-debate polls to see.
btw when's the next debate?

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:33 AM (yAor6)

72 I don't know if it made national news, yesterday Ben Bailoutke was in Boston for a meeting and the Cockupiers were hoping to "meet" with him.

Meet as in ambush and intimidate.

Bernanke slipped in and out of the building unnoticed via a back door, which is fitting for the Fed chairman.

Posted by: soothsayer at October 19, 2011 08:33 AM (ZgBZU)

73 If people are considering Cain's corporate income tax as a VAT, how is it that the current corporate income tax would not be considered a VAT? Per Cain, his tax takes gross income minus various deductions; in effect, taxable net income. That's what the current corporate income tax does now as well, but at a higher rate (it starts at 15% and goes up to 35%). Gabe says this: "And that compounds, as Bachmann explained, at every supplier or vendor until the final sale[.]" We have that now. Every vendor and supplier has to pay a tax on their net income, which is factored into the price of whatever is being sold. In effect, we already have a VAT in place. Cain's plan cuts the rate anywhere from 6% to 26%, depending on the income a business earns. I don't see a downside.

Posted by: SteveAR at October 19, 2011 08:33 AM (ciRLN)

74 btw when's the next debate?

Posted by: Back To Neutral AuthorLMendez



Nov 9.

Posted by: macintx at October 19, 2011 08:34 AM (ucs8Y)

75 VAT or non-VAT, misses the point. This is a tax that the government can easily raise at will, companies have no choice but to pass it on to the consumer in the form of higher prices, then the idiot customers blame "price gouging" and demand more government regulations. THAT is why this tax is a bad idea, even if it isn't a true VAT.

Posted by: chemjeff at October 19, 2011 08:36 AM (s7mIC)

76 Posted by: macintx at October 19, 2011 08:34 AM (ucs8Y)
awesome I'll be at my mom's that night so I can get her to watch it. She has yet to watch any of these debates. Unfortunately she doesn't like Romney because she finds mormoism creepy. I'm not saying not liking Romney is bad as 70%+ haven't jumped on his bandwaggon but i'd rather she have beef w/ policy over her fears of mormoism

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:36 AM (yAor6)

77 Posted by: chemjeff at October 19, 2011 08:36 AM (s7mIC)
+1

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:37 AM (yAor6)

78 9-9-9 is a gimmick to get people off the gotcha race issues and onto economics. It is working at that level. It has no chance of passage whatsoever and he knew it going in. He is doing classic Change the Terms of the Debate. Good for him. Let's see if he can get the ball in the hole.

Posted by: SurferDoc at October 19, 2011 08:37 AM (STdkO)

79 Keep taxing income and not consumption...everyone who exports to the USA loves when you do that.

Make sure our high taxes are embedded in our exports and thus noncompetitive.

Make sure it makes sense to invest overseas where they tax income less, and consumption more. (Factories consume stuff, true, but if you export your products the VAT is almost always rebated.)

Posted by: sexypig at October 19, 2011 08:38 AM (Qr1T3)

80 Because the tax code will never truly be overhauled, it's stupid to even debate this proposal.

Posted by: Ed Anger at October 19, 2011 08:38 AM (7+pP9)

81 74
btw when's the next debate?





Posted by: Back To Neutral AuthorLMendez





Nov 9.

Posted by: macintx at October 19, 2011 08:34 AM (ucs8Y)
Isn't it supposed to be all foreign policy stuff too? If so, we may finally see Herman Cain achieve critical mass and have a full blown meltdown.

Posted by: davidinvirginia at October 19, 2011 08:39 AM (haFNK)

82 Pick a real gripe. You're pissing all over your dwindling stock of credibility.


Credibility?!? That seem best left to those cable things!

Posted by: Charlie Gibson at October 19, 2011 08:40 AM (mue7s)

83 What's this?

70 pprotesters are pedaling on bicycles to generate electricity for laptops and other things.

Posted by: soothsayer at October 19, 2011 08:41 AM (j7IJ7)

84 Posted by: Ed Anger at October 19, 2011 08:38 AM (7+pP9)
my thing is that Cain acts like his election will pass the plan alone. There's still congress to get through and I gurantee you that whoever beats Obama in 2012 will face Dems who will say "no" all the way to w/e he/she proposes. They'll think the GOP saying "no" to Obama made them start a comeback and they'll do it themselves to try and gain support.

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:41 AM (yAor6)

85 Isn't it supposed to be all foreign policy stuff too? If so, we may finally see Herman Cain achieve critical mass and have a full blown meltdown.
Posted by: davidinvirginia at October 19, 2011 08:39 AM (haFNK)
fuck Cain reaching critical mass, watch for Paul's head to explode!

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:42 AM (yAor6)

86 So the protestors are now as smart as hamsters? Guess they're evolving.

Posted by: GOP Heterodox at October 19, 2011 08:43 AM (qNuEj)

87 "And I invite every American to do their own math..."
Herman my good man, do you realze what country you're runnning to be president of?

Posted by: mugwara at October 19, 2011 08:45 AM (W7ffl)

88 In NY 3000 meals a day are served.

0 porta potties.

Someone do the math.

Posted by: soothsayer at October 19, 2011 08:46 AM (vzLhi)

89 "And I invite every American to do their own math..."
Herman my good man, do you realze what country you're runnning to be president of?
Posted by: mugwara at October 19, 2011 08:45 AM (W7ffl)
LMAO +1

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:46 AM (yAor6)

90 Can't wait until the bikes get stolen.

Posted by: Empire of Jeff at October 19, 2011 08:46 AM (vzFJV)

91 Can't wait until the bikes get stolen.
Posted by: Empire of Jeff at October 19, 2011 08:46 AM (vzFJV)
we're working on that

Posted by: The Koch Brothers at October 19, 2011 08:47 AM (yAor6)

92 Apple juice and orange juice get made in a vat!!!

Posted by: The Mega Independent at October 19, 2011 08:47 AM (WosAg)

93 There seems to be a gross misunderstanding of Cain's mathematics.

When business pays 9% on sales, and consumers pay 9% on products with the 9% embedded tax, you don't add the two together, and come up with 18%.

The consumer is only paying 9% OF the 9%, for a total of 9.09%.

Same with the added 9% as it comes down the chain.. Only 0.09% gets added at each sale.

Clear?

Posted by: franksalterego at October 19, 2011 08:47 AM (9XykO)

94 It's one big long Maya Angelou poem.

Posted by: soothsayer at October 19, 2011 08:48 AM (KreG+)

95 I like the debates being kinda heated.I don't want a bunch of statesman like Mcains running for POTUS.

As far as Cains 9-9-9 plan, it's like any other plan of the monumentous change he is calling for.It needs to be picked apart and restructured in such a way as it being doable.
I don't see anyone else offering any other plans and I give Cain for putting one up knowing he would be taking it in the teeth.

Also, on Perry.He is coming off as a petty little guy not because he is pointing out illegals working for Romney but because he let Romney treat him as a little school boy with his remarks and having no other comeback other than to look like a deer in the headlights.I like Perry but the guy just doesn't seem very quick on his feet.

Posted by: Drider at October 19, 2011 08:48 AM (HaJD9)

96 so where are the Romneybots, they tend to come at the end of the threads to post up websites and cut and paste stuff to back their mancrush
oh and Byron fucking York wrote that Perry finally woke up, my anlysis that last night was good for Perry starting to look more sane

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:49 AM (yAor6)

97
Also, he did say that he would trade the prisoners at Gitmo for an American.

I don't think his current level of support will last. Another few gaffes and people will remember why he was second tier just two weeks ago

Posted by: Ben at October 19, 2011 08:49 AM (wuv1c)

98 Newt, as he's wont to do in these things, hit the nail on the head last night.
Cain's effort to reform the tax code is ambtous and admirable, but it is a project that wll take many years and consume a lotta politcal capital. Meanwhle, the country needs a plan to immediately jumpstart the economy, and tax code reform is not it.

Posted by: mugwara at October 19, 2011 08:50 AM (W7ffl)

99 What gets me is that of all the MANY things for
which one could dismiss Herman Cain, Gabe decides to redefine VAT as
income-based, versus transactional profit-based.



Fucking retarded.



Pick a real gripe. You're pissing all over your dwindling stock of credibility.

Posted by: Empire of Jeff at October 19, 2011 08:32 AM (l9zgN)


What in Pete's name are you talking about? How did I redefine a VAT? I suppose you think everyone else who has criticized Cain's proposed VAT are doing the same thing, but based on . . . what? That you don't like it? That's fuckin' weak, Empire.

Aren't you the guy who accused me of not explaining why it's a VAT and then ran away when I pointed out that I had explained not once, but three times? Oh yeah, that was you.

Posted by: Gabriel Malor at October 19, 2011 08:52 AM (XVaFd)

100
What other candidate has bothered to craft any kind of meaningful alternative?

Perry unveils his this week. Romney put out a 58 page plan.
I'd also debate whether 9-9-9 is a meaningful plan.
It's just catchy. It's more of a advertising successrather than a realistic tax policy.
Again, i like Cain but this plan isn't a good one.

Posted by: Ben at October 19, 2011 08:52 AM (wuv1c)

101 73
If people are considering Cain's corporate income tax as a VAT, how is
it that the current corporate income tax would not be considered a VAT?

Right. It's not that different from the corporate income tax. Looks like some things wouldn't be deductible that currently are.

Posted by: slatz at October 19, 2011 08:55 AM (mE0Rl)

102 94
It's one big long Maya Angelou poem.


Yes. Yes I am, then I choke a bitch!

Posted by: life at October 19, 2011 08:55 AM (mue7s)

103 has no one read his plan? He states in his summary that the 9% national sales tax is a replacement tax for embedded sales taxes (gasoline, airline tickets, etc.) it is not an add-on tax. It is not a VAT. READ his plan. In addition, his plan is in two phases. The first is to scrap the tax code and replace it with 9-9-9 and the second phase is to implement the Fair Tax. Criticize with knowledge people. Come on.

Posted by: JCELEPHANT at October 19, 2011 08:56 AM (TYm2g)

104
The consumer is only paying 9% OF the 9%, for a total of 9.09%.Same with the added 9% as it comes down the chain.. Only 0.09% gets added at each sale.

Clear?


Posted by: franksalterego at October 19, 2011 08:47 AM (9XykO)
More precisely, 0.092 = 0.0081, so the consumer paying 9% plus 9% of 9% pays 9.081%.

Posted by: Ed Anger at October 19, 2011 09:00 AM (7+pP9)

105 Hi Rons.

Let's see, who did well last night. Newt and Crazy Uncle Leprechaun. I am losing Patience with the rest.

Did anyone think for a moment that Perry was going to punch Romney in the mouth? I have seen less aggressive body language start a ballroom brawl.

Posted by: Oldsailor's poet doesn't have a clue who to support. at October 19, 2011 09:01 AM (ZDUD4)

106 The first is to scrap the tax code and replace it with 9-9-9 and the second phase is to implement the Fair Tax.
Then just scrap and go with the National Sales Tax and skip the middle part. Because if you go with the alleged intermediate step (9-9-9) then there is nothing that prevents a future Congress from reimplementing the current stystem with the 9% National Sales Tax.
The only thing I like about Cain's plan is that it abolishes the FICA taxes. Of course, he is replacing that 7.35% tax with a 9% tax, but it does take the first step in abolishing the concept that somehow because you "paid" into Social Security you have a God given right to as much Social Security as you can suck out of the system, irrespective of the fact that you may have well exceeded what you actually paid in plus a realistic rate of return.

Posted by: Mallamutt, RINO President for Life at October 19, 2011 09:01 AM (OWjjx)

107 85Isn't it supposed to be all foreign policy stuff
too? If so, we may finally see Herman Cain achieve critical mass and
have a full blown meltdown.

Posted by: davidinvirginia at October 19, 2011 08:39 AM (haFNK)
fuck Cain reaching critical mass, watch for Paul's head to explode!Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 08:42 AM (yAor6)
I sure wouldn't want to be part of the venue clean up crew after this one then. :-)

Posted by: davidinvirginia at October 19, 2011 09:03 AM (haFNK)

108 has no one read his plan? He states in his summary that the 9% national
sales tax is a replacement tax for embedded sales taxes (gasoline,
airline tickets, etc.) it is not an add-on tax. It is not a VAT. READ
his plan.

Do you see what I mean. You can't even talk to these people. Nobody is calling his his retail sales tax a VAT. They're talking about his corporate tax. This fellow does the exact same, useless thing that Cain did in the debate: "My retail sales tax isn't a VAT. Go to my website analysis."

Posted by: Gabriel Malor at October 19, 2011 09:04 AM (XVaFd)

109 I hat to use the well-worn analogy, but the conservative base (us) is truly resembling the proverbial circular firing squad, as our enemy on the left looks on with unbridled glee.

Posted by: Soap MacTavish at October 19, 2011 09:04 AM (vbh31)

110 Shit...make that "I hate to use...". Fat fingers.

Posted by: Soap MacTavish at October 19, 2011 09:05 AM (vbh31)

111 Ran away? To where - work?

Yes. I have no balls and try to avoid confrontation whenever possible.

You'll have to excuse me for being conditioned to you dropping your condescending little bon mots and never sticking around to back them up.

It's been explained many times why Cain's corporate income tax component of his stupid 9-9-9 plan isn't a VAT. Jim_B sums it up fine in this thread, just so you don't have to look in the archives.

It. Is. Not. A. VAT.

Countless repetition will not make it so. It's a stupid fucking plan, but a VAT is not one of its components.

Posted by: Empire of Jeff at October 19, 2011 09:06 AM (XE2Oo)

112 Oldsailor -Did anyone think for a moment that Perry was going to punch Romney in
the mouth? I have seen less aggressive body language start a ballroom
brawl.

and Romney deserves it, that SS crap he was flinging is the stuff that costs the party elections. The rest of this is inside baseball to the general electorate. Romney went all in to stop Perry's momentum and it will come back in the general.

Posted by: Jean at October 19, 2011 09:06 AM (WkuV6)

113 Ed Anger at October 19, 2011 09:00 AM

Yes, sort of...

It depends on how many times the raw material goes from business to business to become the final (consumer) product.

Posted by: franksalterego at October 19, 2011 09:06 AM (9XykO)

114 Doom has arrived

Posted by: Jean at October 19, 2011 09:07 AM (WkuV6)

115 oldsailor, yeah the romney -perry thing was weird. although seeing both have something they thought important enough to be passionate over was interesting.

i suppose i would have been happier if i would have seen the same amount of fervor discussing fast and furious or pay to play schemes.

Posted by: willow at October 19, 2011 09:08 AM (h+qn8)

116 So, upper and lower receivers, when purchased separately, would not be taxed. Cool.

Posted by: Jean at October 19, 2011 09:08 AM (WkuV6)

117 It's a stupid fucking plan
You know what pisses me off? I do countless posts with math and numbers and frigginEOJ comes in and sums up the 9-9-9 plan in 5 words.

Posted by: Mallamutt, RINO President for Life at October 19, 2011 09:09 AM (OWjjx)

118 I bet that exact same hit and run comment is posted all over the place Gabe.

They're approaching Paulbot levels of denseness.

Posted by: Andy at October 19, 2011 09:11 AM (yxtW6)

119 Empire, Jim_B is completely off base, as has also been explained above numerous times. That you disagree means you disagree, not that you're right simply because you say you're right.

Posted by: Gabriel Malor at October 19, 2011 09:12 AM (XVaFd)

120 You know what pisses me off? I do countless posts with math and numbers

Ok. Found yer problem, mister.

Just punch 'er up with some cussin' and a dick joke and she'll purr like a kitten.

Posted by: Empire of Jeff at October 19, 2011 09:13 AM (XE2Oo)

121 :sigh:

Fine, Gabe. We'll just have to agree that you're wrong, okay?

Glad that's over.

Posted by: Empire of Jeff at October 19, 2011 09:15 AM (XE2Oo)

122 One of the few things the left has a handle on is the concept of the ends justifying the means. Those bastards will stand with 100% solidarity behind a shitty politician to advance their agenda. We on the right? Shit, sometimes we can't agree on what f'n day it is. Personally, I find this demoralizing. I'm all for constructive debate, but so far I don't see any positive results coming out of the discourse. I keep telling myself that it's relatively early in the game and that things will shake out, but the clock is indeed ticking.

Posted by: Soap MacTavish at October 19, 2011 09:16 AM (vbh31)

123 I have been fighting this Cains plan is a Vat lie for two FKN days, I'm glad the Calvary decided to show up.

My problem with the 999 plan is that it can be made into 121212. I just wish more people would get on board with how destructive the current tax system is and how it's abolishment is the main precursor for fixing things.Check out the Frederick Douglas Foundation. It was founded by the former Vice Chair of the NCGOP - Dr. Tim Johnson. Tim was on stage at Beck's Restoring Honor rally. He is dedicated to teaching the truth about the history of blacks and the Republican Party. He spoke at our county meeting last week and all I can say is Wow! As he stated, the truth is that the Democrats at the party of 4 S's - slavery, secession, segregation, and socialism.

Posted by: Oldsailor's poet doesn't have a clue who to support. at October 19, 2011 09:16 AM (ZDUD4)

124 well Glenn's minion is saying Romney won the debate, fuck it all. Mitt's gonna be the nominee

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 09:17 AM (yAor6)

125 Did anyone think for a moment that Perry was going to punch Romney in
the mouth? I have seen less aggressive body language start a ballroom
brawl.

Well,the clip i saw this am on UT news showed Mitt laying hands on Rick, Good thing he's not an nfl coach.

Posted by: Y-not of the booboo finger at October 19, 2011 09:18 AM (5H6zj)

126 Well,the clip i saw this am on UT news showed Mitt laying hands on Rick, Good thing he's not an nfl coach.
Posted by: Y-not of the booboo finger at October 19, 2011 09:18 AM (5H6zj)
THREAD WINNER

Posted by: Back To Neutral AuthorLMendez (Ban k1rwm) at October 19, 2011 09:19 AM (yAor6)

127 EoJ, it's a modified VAT.

You're confusing the method of collection (invoice based vs. accounts based) with the definition of value added tax.

It's not an income tax, because it doesn't tax net income. It's a VAT because it taxes gross income less taxable inputs. (he gives some other exemptions too, notably dividends, which is why I try to refer to it as a modified VAT)

This is neither good nor bad. It's just a fact.

Posted by: Andy at October 19, 2011 09:20 AM (yxtW6)

128 Well,the clip i saw this am on UT news showed Mitt laying hands on Rick, Good thing he's not an nfl coach.

Yeah, I don't like people touching me uninvited. I would have had to remove his hand, gently prolly but it would have been removed. It's also a dominance move. Perry should not have tolerated that.

Posted by: Oldsailor's poet doesn't have a clue who to support. at October 19, 2011 09:21 AM (ZDUD4)

129 The first is to scrap the tax code and replace it with 9-9-9 and the second phase is to implement the Fair Tax.
And Cain's plan doesn't even say that. What Cain says is that he will start the process of educating the American people on the Fair Tax and then hopefully it will get implemented. No timetable. No guarantee. Just some more education.
I'm sorry, Fair Tax supporters, but you have banged on that more than a 5 buck hooker at the Jersey Tunnel and it still hasn't been accepted yet. The fact that you had to rebrand a national sales tax to a "Fair Tax" is evident that it isn't going to sell. Sort of like naming a commie country the "People's Democratic Republic of San Fransico".

Posted by: Mallamutt, RINO President for Life at October 19, 2011 09:21 AM (OWjjx)

130 The problem I have with Cain's plan is, eventually all the tax gets paid by the consumer.. Embedded tax plus sales tax.. This is no different than what's happening anyway.

I think, the only fair tax would be, all tax on the consumer, with scalable deductions for certain needed products, and eliminate the income tax.

But, we also need strict limits on Gov't spending, tied to economic conditions.. End the ratchet-up effect.

Posted by: franksalterego at October 19, 2011 09:24 AM (9XykO)

131 son of stuxnet now circulating online.


Posted by: willow at October 19, 2011 09:25 AM (h+qn8)

132 sorry at HA

Posted by: willow at October 19, 2011 09:25 AM (h+qn8)

133 I'm sorry, Fair Tax supporters, but you have banged on that more than a 5 buck hooker at the Jersey Tunnel and it still hasn't been accepted yet.

I don't know about that. I see a fair number of fair tax bumper stickers. It has caught on to a wide swath of Americans. The real problem is finding a leader to sell it. Conservative talk show hosts are great but they can't lead a nation. We need a National leader with real passion and the ability to teach without preaching.

Posted by: Oldsailor's poet doesn't have a clue who to support. at October 19, 2011 09:27 AM (ZDUD4)

134 It might be helpful if people forget about the minutia and focus on the big picture.

A major change in tax policy is needed to give the U.S. a competitive advantage in the world marketplace. The current system discourages business and individuals from investing here and avoidance/compliance make everything too complicated and expensive.

Cains 9-9-9 doesnt solve anything, as he includes everything that is wrong with the existing system while adding another component that doesnt fully tap the targeted revenue and leaves the compliance costs intact.

Only the Fair Tax plan fundamentally changes the dynamics of the economy to provide an environment for sustained growth. Some say it would be impossible to pass the plan in congress, but as the economy continues to falter, people are searching for the magic bullet that provides the radical change the country needs to get back on track.

Posted by: jwest at October 19, 2011 09:28 AM (qeYI9)

135
All taxes are already paid by the consumer. Even if Cain's plan is a VAT, the question is whether it's a better approach than what we have now. I keep hearing that America has the highest corporate tax rate among developed countries. Would 9% be lower? Would Cain's tax lead to situations where corporations like GE can pay ZERO tax? Seems like a flat tax would reduce the opportunity for cronyism in the tax code that we have now.
One additional option would be to stipulate that the rates associated with each component of the 9-9-9 would have to vary together, i.e. they would all have to go up or down at the same time, so you would never get a 9-20-9 situation. That would make it harder to raise the rates on just one group, and you would have three separate but overlapping groups interested in every rate change.

Posted by: OCBill at October 19, 2011 09:39 AM (MiSre)

136 So, is it possible under Cain's plan to operate at a loss and still owe corporate taxes?

Posted by: Entropy at October 19, 2011 09:40 AM (XxXUI)

137 You're confusing the method of collection (invoice based vs. accounts based) with the definition of value added tax.

BZZZZZZT!

No. You're confusing what's actually being taxed. His plan taxes income less some expenses. VAT taxes the difference on the amount of premium (value) charged for a product, less credits received for taxes already paid for the material upstream in the supply chain.

Simpler, VAT addresses a specific type of event, while an income tax taxes all income. Those of you with accounting or business experience will recognize that income from sales is only one of many possible income streams a business can have.

Are you saying that Cain's corporate tax does not tax income from investments, interest payments, foreign exchange gains, etc.? All of those are now tax-free?

Were these addressed after I "ran away?"

Posted by: Empire of Jeff at October 19, 2011 09:40 AM (0yt4x)

138 >> VAT taxes the difference on the amount of premium (value) charged for a product.
That is the invoice-based collection method.
Cain's uses an accounts-based collection method. Japan's VAT uses the same method, they label it a Consumption Tax.

Posted by: Dave in Texas at October 19, 2011 09:45 AM (b3mf5)

139 Cain and Cain's people realize this shit is never going to happen. On top of everything else we're all arguing about and all this shit going down the drain, this convoluted arcanetax reform debate is not going anywhere.

Posted by: Entropy at October 19, 2011 09:50 AM (XxXUI)

140 >> So, is it possible under Cain's plan to operate at a loss and still owe corporate taxes?

Yes

Posted by: Andy at October 19, 2011 09:52 AM (yxtW6)

141 Some say it would be impossible to pass the plan in congress, but as the economy continues to falter, people are searching for the magic bullet that provides the radical change the country needs to get back on track.
Yes, they are, and that's the problem! There isn't one. Fair tax isn't a magic bullet that 'gets our country back on track' (if that wasn't an emptyplatitude I don't know what it is).

Posted by: Entropy at October 19, 2011 09:56 AM (XxXUI)

142 >> So, is it possible under Cain's plan to operate at a loss and still owe corporate taxes? Yes
That's going to bankrupt people.
That's going to be an issue, when weak companies that aren't profitting arebeing bankrupted bytaxes despite not having made any money.

Posted by: Entropy at October 19, 2011 09:57 AM (XxXUI)

143 The beauty of a pure consumption tax is, the only tax collector is the retailer.

I don't know what the eventual tax rate would be, but whatever it was could be seen by the consumer.

This would discourage spending and encourage saving and investment.

Everything THIS gov't is doing is, just the opposite.. They encourage spending so they can collect enough taxes to satisfy their appetite for their own spending.

They've got interest rates clamped down so low, you're not encouraged to save or invest.

They want you buried in debt, just as they are.

Posted by: franksalterego at October 19, 2011 10:00 AM (9XykO)

144 The fact that you had to rebrand a national sales tax to a "Fair Tax" is evident that it isn't going to sell. Sort of like naming a commie country the "People's Democratic Republic of San Fransico".
Heh.
It's occured to me before.The flat tax is called the flat tax cuz, get this - it's a flat tax. 10-20%, flat. It's descriptive. And 'flat' doesn't have any positive connotations anyway, except maybe in taxes.
Fair tax? Sounds like something a democrat thought up. I know it's not, but it's a little cheap and demagogous of a name. Why not just as well call it the "Choice Tax".
It's not a substantive criticism, it's just the damn name. But the name is kinda cheap and taudry.

Posted by: Entropy at October 19, 2011 10:04 AM (XxXUI)

145 In my opinion, Perry finished himself with the debate last night. Even in his best answers it took him ten seconds to pull out easy words, and that old attack on Mitt was so weak. The two Rick's looked like twin attack dogs speaking over him even if 'Rumney' was lying you really think the media is going to make that point? Newt and Cain need to form a super candidate!

Posted by: ConsensusScienceIsBunk at October 19, 2011 10:05 AM (dhNwe)

146 The beauty of a pure consumption tax is, the only tax collector is the retailer.That's bullshit on a stick dude.
They may be the ones collecting it (via mandate, for uncie Sam, without being compensated), but whether it's the IRS or the FBI or the ATF or the notorious fucking BIG you still need all the enforcement you've ever had because no taxis easier to evade than a sales tax.

Posted by: Entropy at October 19, 2011 10:08 AM (XxXUI)

147 Repeal the income tax and we'll talk.
Herman Cain's 9-9-9 approach is not the way to get a fair tax.

Posted by: Entropy at October 19, 2011 10:10 AM (XxXUI)

148 Mittbots are coming out strong, here and especially at NRO. I smell fear.

Posted by: Recluse spider at October 19, 2011 10:11 AM (eScuN)

149 This is the dumbest post I've seen in a while.

The 9% corp tax is a VAT?

Pass the bong please.

Posted by: cherry pi at October 19, 2011 10:20 AM (OhYCU)

150 Entropy,

The Fair Tax is as close to a magic bullet as anything. It changes the whole dynamic of where capital wants to be and where manufacturing is cost effective. It lowers the prices on exports, it raises the prices on imports without tariffs and makes U.S. produced goods competitive around the world.

For individuals, it eliminates all compliance costs, immediately gives everyone the full value of their labor, raises the value of existing homes and vehicles and provides the means for people to adjust their tax contribution based on their decisions on what to buy and when. As the only truly transparent tax, any attempt to raise it will meet with the full fury of a united populous.

By tapping non-taxpaying sources, the burden on the general public will be lowered. Compliance would be much easier to monitor since only retail outlets would be in the loop, as opposed to 130 million households.

Magic never looked so good.

Posted by: jwest at October 19, 2011 10:22 AM (qeYI9)

151 I'll keep saying this until Cain drops out to endorse Romney:

I just finished my taxes for 2010; if Cain's plan was in effect, I'd go from showing a loss of $5000 on my business and, with my wife's self-employment income, owing $2700, to owing over $9000--and that's before I get to pay for the privilege of buying food under his plan and doesn't include the income tax portion either.

Yeah, I've done the math Cain--and your plan sucks donkey balls.

Fuck you!

You see Cain, a lot of small businesses and the self-employed are set up as a corporation or an LLC--your plan taxes them 3 fucking times!!

Again: Fuck you!

Your plan will destroy--absolutely destroy--the small businessman and the self-employed.

Posted by: Jimmuy at October 19, 2011 10:23 AM (hROVJ)

152 There are plenty of things to hammer 999 on. There's no reason to lie about it. Leave that to the cables.

Posted by: cherry pi at October 19, 2011 10:24 AM (OhYCU)

153 VATs dont compound. The tax incurred gets deducted as a biz expense. Thus only applies to end user. This is also how it's "efficient"- it self regulates. In effect, he is proposing doing how the payroll tax is done to a national sales tax.

Posted by: A.G. at October 19, 2011 10:27 AM (gh7Et)

154 no taxis easier to evade than a sales tax.

A simple reward program that gives whoever turns in a tax cheat 20% of the calculated years worth of tax would solve the problem before it even started.

As a small retailer, are you going to sell something to your brother-in-law without the sales tax knowing that the first time you piss him off he will turn you in?

Posted by: jwest at October 19, 2011 10:29 AM (qeYI9)

155 A simple reward program that gives whoever turns in a tax cheat 20% of the calculated years worth of tax would solve the problem before it even started.
Oh fucking god no.
Look, no it will not. That's what you think. Why don't you just offer a reward for drug dealers?
But thanks for trying to turn the whole damn country into a bunch of amateur reveneurs and snitches, looking to profit by nailing their neighbor.
Opposed with every fiber of my being.The fact that the sales tax is easily dodged is about the one thing it has going for it with me. But it's still an issue, because if too many people do it instead of just me (quite liable), government will obviously have to do something.

Posted by: Entropy at October 19, 2011 10:33 AM (XxXUI)

156 As a small retailer, are you going to sell something to your brother-in-law without the sales tax knowing that the first time you piss him off he will turn you in?
Again, perhaps you're not familiar with the vast, existing underground economy.

Posted by: Entropy at October 19, 2011 10:34 AM (XxXUI)

157 A simple reward program that gives whoever turns in a tax cheat 20% of the calculated years worth of tax would solve the problem before it even started.
And who is going to run that program? And who is going to actually double check to make sure you collected and filed your Fair Tax returns?
The IRS.
And what does every advocate of the Fair Tax say is an advantage of the Fair Tax....
yup, it gets rid of the IRS (and yes, so does Herman...its in the fine print).
And here is one problem I have with Fair Tax advocates. You tell us you are going to get rid of the IRS and everyone knows that it is a bunch of crap.
So, just be candid with your plan.
Stop calling it a Fair Tax. Call it a sales tax.
Stop advocating you will abolish the IRS. You aren't.
Stop pretending that through double secret probation math you will reduce the cost of things......you won't.
In otherwords, try selling the plan on what it does instead of the pipe dreams of what you think it might do in a perfect world.

Posted by: Mallamutt, RINO President for Life at October 19, 2011 10:37 AM (OWjjx)

158 Entropy,

There is already a program in place that provides rewards for turning in tax cheats. The problem with it is, business and individual tax returns are private and only insiders have an opportunity to see them and know what is a lie.

If some business wants to gain an advantage by not charging the sales tax or wants to increase profits by charging the tax and then not remitting it to the government, the simple fact that there are so fewer payers to monitor than before would give the IRS a big advantage. Simple algorithms monitoring tax payments would show differences in similar businesses and trigger audits.

The bulk of retail sales are conducted by large corporations anyway. Do you think McDonalds is going to cheat?

Posted by: jwest at October 19, 2011 10:44 AM (qeYI9)

159
Another inflated marshmellow original post intended to downgrade anyone except Gabriel's chosen one.

I must be the only true conservative left who actually dislikes a progressive tax system and wishes for a national consumption tax. It is amazing how liberal the conservatives can get when their favorite technocrats are in danger of being voted down.

Posted by: Doug at October 19, 2011 10:48 AM (gUGI6)

160 157, And who is going to actually double check to make sure you collected and filed your Fair Tax returns?
Calm down now. Businesses already file monthly sales tax returns. They will now have a one page Federal sales tax form monthly. That's it. No more income tax.

Posted by: cherry pi at October 19, 2011 10:48 AM (OhYCU)

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Cains 9-9-9 tax plan is not the way we should overhaul the
tax code. The plan would lower overall tax rates for the wealthy and raise
rates on the poor and middle class. It would add another revenue stream for the
government and worst of all it is only one phase of a multistage overhaul of
the tax code. http://eng.am/oA2Vi1



What America really needs is the type tax code that both
liberal and conservative politicians have advocated for. This new system would
eliminate most, if not all tax breaks (and institute a standard deduction for
living expenses), reduce the number of tax brackets, and lower the income tax
rate.



With the tax code designed this way the government will be
able to raise revenue (http://eng.am/nz0KaJ)
and decrease spending (http://eng.am/pxo5XL)
over time which will both help economic growth. Isnt that the type of tax code
we all want?

Posted by: David Engage America at October 19, 2011 10:48 AM (17lqV)

162 Cain. How does such an affable, bluff "man of the people" guy hold the jobs he has while being so gaff-tastically stupid ?

Too much to believe: lying sack o' shit is the most likely answer.

Posted by: s☺mej☼e at October 19, 2011 10:49 AM (mue7s)

163 Mallamutt,

As far as private individuals go, the IRS would cease to exist in their world.

Youre pissed off because the name is the Fair Tax Plan? Do you believe the authors are trying to hide the fact that it is a sales tax?

Advocates of the Fair Tax believe the cost of goods would be reduced because it eliminates all the compliance costs through the manufacturing cycle up until the retailer. It eliminates the compliance costs on employees. It makes the U.S. the primary tax haven for the world, which would bring in capital and reduce the cost of borrowing.

Posted by: jwest at October 19, 2011 10:49 AM (qeYI9)

164 content of character wise,. boyo.

Posted by: s☺mej☼e at October 19, 2011 10:50 AM (mue7s)

165 139
Cain and Cain's people realize this shit is never going to happen. On
top of everything else we're all arguing about and all this shit going
down the drain, this convoluted arcanetax reform debate is not going
anywhere.

Posted by: Entropy at October 19, 2011 09:50 AM (XxXUI)
Right. So let's entertain the notion of nominating a guy whose cornerstone of his campaign is a plan everyone--even he--knows won't ever, ever, ever pass. How the hell is that a good candidate? Always defending the "that windmill really is a dragon!" assertion he's tossed out there?Even if you go the "but it's changing the debate" route. That's even stupider. Yes, yes, by all means let us tether the whole of the GOP to the notion that we like to toss out ideas that are stupid as hell and will never pass but we'll push 'em anyway, i.e. we are not a serious party. That is the only result: Not some lightbulb moment for the masses.

Posted by: Jimmuy at October 19, 2011 10:51 AM (hROVJ)

166 I like the idea of the 9-9-9 sales tax because it insures that everyone regardless of income has skin in the game.

And an incentive to vote for an 8-8-8 plan or 7-7-7 plan later on.

Not sure I like the potential for a major tax-f*cking if the Dims get in power again with a pliant group of RINOs.

I have to admit I'm inclined to go with the plan as presented. A payroll tax is a business killer.

Posted by: naturalfake at October 19, 2011 10:51 AM (jkSbV)

167 Too much to believe: lying sack o' shit is the most likely answer.


Or he's a Democrat... (wait what?)

Posted by: s☺mej☼e at October 19, 2011 10:54 AM (mue7s)

168 Debating 9-9-9 details is like using a laser pointer on a box of kittens.
As EoJ said upthread, it's a stupid fucking plan.

Posted by: Count de Monet at October 19, 2011 10:56 AM (4q5tP)

169 Debating 9-9-9 details is like using a laser pointer on a box of kittens.

fun?

Posted by: s☺mej☼e at October 19, 2011 11:01 AM (mue7s)

170 like using a laser pointer on a box of kittens.
I don't know, that sounds a lot funner, and less byzantine.

Posted by: Entropy at October 19, 2011 11:01 AM (XxXUI)

171 That's actually MY tax reform plan.
A laser pointer, a box of kittens, a shoebox full of drugs and a Chilean model.

Posted by: Entropy at October 19, 2011 11:02 AM (XxXUI)

172 You see, the chilean model is rich, so I won't have to pay taxes anymore after all those drugs and the kittens...

Posted by: Entropy at October 19, 2011 11:04 AM (XxXUI)

173 Right. So let's entertain the notion of nominating a guy whose cornerstone of his campaign is a plan everyone--even he--knows won't ever, ever, ever pass.
Well unless you like Perry,that sucks,because that's who we're going with.
Romney is death. The dude will split the party.
The cornerstone of the Romney campaign is that Romney can campaign for years and years and years and harldly say anything of substance of at all.
So he won't embarass you when he loses to Bambi. He'll lose all classy like, just like McCain.

Posted by: Entropy at October 19, 2011 11:08 AM (XxXUI)

174
"This explanation is no explanation at all. Folks aren't calling his retail sales
tax a VAT. They're calling his corporate flat tax a VAT."
What The F? Is everyone stupid? There's already a corporate tax, and it's like 38% atthe highest level. If Cain's flat 9% tax is the same as a VAT, what the hell is 38%?
It's obvious that these idiots are confusing Cain's sales tax with a VAT. Good grief.

Posted by: RokShox at October 19, 2011 11:12 AM (pcly4)

175 Beldar weighs in on 9-9-9 plan, also linking to Big Lizards.

Posted by: Y-not of the booboo finger at October 19, 2011 11:13 AM (5H6zj)

176 I must be the only true conservative left who actually dislikes a progressive tax system and wishes for a national consumption tax. It is amazing how liberal the conservatives can get when their favorite technocrats are in danger of being voted down.
you must, as some point, come to terms with the fact that a lot of people who really really like Cain, still don't like this goddamn policy plan of his (that he came up with just before running for POTUS as a longshot and needed to get attention).
NOT all 9-9-9 opposition comes from squishes and romneybots.
It is a mistake to make that assumption.

Posted by: Entropy at October 19, 2011 11:14 AM (XxXUI)

177 I'd be interested in this Triple 9 plan of Cain's if it you know, dropped income taxes and property taxes for just sales taxes. Sales taxes suck in many ways but they also tend to hit people immediately vs income/property taxes and thus politicians are going to be held more accountable for every little tax they want to pass to fund program x.

Posted by: JS at October 19, 2011 11:15 AM (t3ugZ)

178 HOW he does that now without betraying himself, I don't know.
A lot of his supporters are touting that the details really don't matter, the important thing is that he is raising the issues and putting real radical tax reform on the table.
OK. He needs to segue away from this 9-9-9 stuff and mix in some 'we need to have a national debate' and 'ideas to start a meaningful discussion' type talk, et al, so he walk that back a bit into more open ended reform options.

Posted by: Entropy at October 19, 2011 11:17 AM (XxXUI)

179 "Sheesh. Where's Newt?"

Talk about the mother ship of shit floating the "real" messiah. Newt pales Clinton's administration by poll numbers. And it's a poor effort to play social conservative with the 2:4 issue of abortion reliant upon poll number support to functionally cya on personal indiscretions of his own.

Executive Orders On the First Day
Newt has pledged to issue a series of Executive Orders to create jobs and help undo the damage of the Obama administration on the first day of his administration. To harness the wisdom and knowledge of the American people, Newt is now collecting ideas for executive orders that he would sign on the first day.

Learn More :
The first four Executive Orders President Newt Gingrich will sign are

1. Eliminate the thirty-nine White House "Czar" positions created during the current administration. The president does not have the authority to appoint bureaucrats to power who are not accountable to the Congress.

** 2. "Mexico City Policy" of Respect for Life. Reauthorize President Ronald Reagans policy also known as the "Mexico City Policy" to stop tax payer dollars from being used to fund or promote abortions in foreign countries.

** 3. Restore conscience clause protections for Healthcare Workers. No American working in a medical environment should be forced to perform any procedure that he or she finds morally or ethically objectionable based on religious teaching. This protection should include, but not be limited to abortion. Existing conscience clause protections need to be strengthened.

* 4. Respect Each Sovereign Nations Choice of its Capital. Each sovereign nation, under international law and custom [see UN resolution] may designate its own Capital. Accordingly, the U.S. State Department should be instructed to respect the choice of each sovereign nation and place the American embassy in their Capital. (Israel is the only country the United States discriminates against in this regard. The people of Israel have designated Jerusalem [1980] as their capital. Yet the United States retains its embassy in Tel Aviv.)
More based on user submissions coming soon.Submit Your Ideas For Changing Washington on Day One of a Newt Gingrich Presidency

---
* Why build ANOTHER US embassy after a
country relocates its originally designated capital? Tel Aviv was
Israel's initial capital in 1948. Tel Aviv was founded in 1909 by the Jewish Community of Jaffa, so has no conflicting population claim to power.
It is Israel's economic center. Tel Aviv may provide better security for
a Middle East US Embassy in Israel than Jerusalem. But in the making of
this as his platform plank, deceitfully, Newt would have us believe
that America snubbed Israel. "The subsequent advisory opinion of the International Court of Justice expressed the view that all States are under an obligation not to recognize the illegal situation in and around East Jerusalem. Most nations with embassies in Jerusalem relocated their embassies to Tel Aviv, Ramat Gan or Herzliya following the adoption of Resolution 478. Following the withdrawals of Costa Rica and El Salvador in August 2006, no country maintains its embassy in Jerusalem, although Paraguay and Bolivia have theirs in nearby Jerusalem suburb Mevasseret Zion."--wiki

** So Newt is relying on debates and spam sperm.

Posted by: didn't take long at October 19, 2011 11:19 AM (lpWVn)

180 What The F? Is everyone stupid? There's already a corporate tax, and it's like 38% atthe highest level. If Cain's flat 9% tax is the same as a VAT, what the hell is 38%?
It's obvious that these idiots are confusing Cain's sales tax with a VAT. Good grief.
You should brush up a bit before labeling everyone idiots.
Cain's "corporate tax" is evidently something quite different from what we currently call the "corporate tax". For one thing, apparently, it's not a tax on profit.

Posted by: Entropy at October 19, 2011 11:19 AM (XxXUI)

181 Apples and Oranges don't mix!

Posted by: 999% Cain at October 19, 2011 11:21 AM (lpWVn)

182 Its becoming more and more clear that Cain just isnt ready for prime time.

Perry cant find his ass in a debate with both hands. On top of that, he comes off with the stench of desperation, reaching for something that will put him back in the running. No sale.

We can only hope that this fragmentation continues on so that the ultimate candidate is brokered at the convention.

Posted by: jwest at October 19, 2011 11:23 AM (qeYI9)

183 If you think Cain's corp tax is a VAT, you are by definition an idiot.

I still love idiots, however.

Posted by: cherry pi at October 19, 2011 11:23 AM (OhYCU)

184 But that doesn't really address it, does it?
People have serious qualms about such a radical plan, they can't just be all deflected away with dismissals.

Posted by: Entropy at October 19, 2011 11:26 AM (XxXUI)

185 Don't worry guys! By the time we tear apart any real potential candidate that could fix our broke as fuck situation we'll have Romney swoop in and just claim the nomination with ease.

He'll just use the time we've spent eating each other to figure out exactly what his platform is.

Posted by: Aurvant at October 19, 2011 11:36 AM (oS5UY)

186 NOT all 9-9-9 opposition comes from squishes and romneybots.

Do you presume to criticize the great Oz? You ungrateful creatures. Consider yourselves lucky. Pay no attention to that man behind the curtain! ...a humbug...a very bad man.

Yesterday a comment posted the link to Cain's 2010 editorial castigating a federal sales tax.

On its Board, Cain exploited the fraud of the Federal Reserve, learning the tricks of the trade from the master crony capitalist Greenspan. Cain supported TARP. Cain would dismiss Bernanke only to reinstate another Greenspan. Don't expect anything he proposes to function contrary to feeding the status quo elitist corruption. Of course his financial backers front a man made good by living the American Dream through hard work. No logical person would deny Cain respect for his professional achievements. But on AGENDA, don't mix apples with oranges. For Cain, "fiscal conservatism" amounts to raising revenue (more/new taxes) to meet bloated federal spending, digging America a deeper economic grave.

Posted by: 999% Cain at October 19, 2011 11:37 AM (lpWVn)

187 People have serious qualms about such a radical plan, they can't just be all deflected away with dismissals.

Attack the plan honestly. There's plenty to attack. It's dead.

The 'new sales tax' angle is enough for the primary. And the dishonest 'taxes the poor' angle will be enough in the general.

Posted by: cherry pi at October 19, 2011 11:39 AM (OhYCU)

188 to figure out exactly what his platform is.

Ever changing revisionism, making whatever promises that buy votes. No. The more he changes, the more Mitt stays the same. Liberal elitist front. Assbackwards conservative fraud.

Posted by: 999% Cain at October 19, 2011 11:41 AM (lpWVn)

189 And the dishonest 'taxes the poor' angle will be enough in the general.

Dishonest but true...

Posted by: 999% Cain at October 19, 2011 11:43 AM (lpWVn)

190
Herman Cain eliminates the 35% corporate tax plus the 15.3% payroll tax (a direct tax on labor) and replaces them with a 9% corporate tax.
Michele Bachmann called Cain's 9% corporate tax a VAT, because it taxes labor (actually treats labor the same as capital, but for fun we'll grant her the point).
So she has a problem with a 9% tax on labor--it's a VAT, it's going to destroy businesses--yet, she's OK with the current 15.3% tax on labor??
By failing to mention the current 15.3% labor tax when attacking Cain's 9% labor tax, she was delibertatly trying to smear Cain's plan. A lie of omission is still a lie. IMHO, Bachmann crossed the line.

Posted by: Nerds4Cain at October 19, 2011 11:44 AM (qLkWg)

191
Cain's 9% Business Flat Tax is based on:
"Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports."
So wages paid are not deductible. But employers save the ~8% they were paying on wages in payroll taxes, so that's a wash.
Also, purchases from businesses are only deductible if they are from US based companies (neglecting net exports for a momment). That seems like a nice incentive to buy US.
What else is included in Cain's taxableincome that is excluded under the current tax regime? Cost of sales? MealsIncidentals? Those are all business purchases and would be excluded.

Posted by: RokShox at October 19, 2011 11:49 AM (pcly4)

192 190 is a good example of how easy it is to confuse everyone about Cain's plan. Obama and the MSM will destroy it.

Posted by: cherry pi at October 19, 2011 11:50 AM (OhYCU)

193 Michele Bachmann called Cain's 9% corporate tax a VAT, because it taxes
labor (actually treats labor the same as capital, but for fun we'll
grant her the point).
Nerds4Cain,

I'll give Bachmann the benefit of the doubt when it comes to "trust" on who knows tax law best from the candidate panel.

I understand this much, though. Labor/income-tax is NOT the VAT that Bachmann criticized.

She's critical of the 9% sales tax on new purchases. "Labor" wages aside, it's the 9% sales tax per stage of manufactured goods produced that the Cain VAT injures during his projected economic recovery. The VAT inflated costs imposed on US manufactured goods shoots the manufacturing industry in the head.

Posted by: 999% Cain at October 19, 2011 11:55 AM (lpWVn)

194 9% sales tax per stage of manufactured goods produced

999%, either idiot or liar. Which?

Again, there's plenty not to like about 999, so why lie?

Posted by: cherry pi at October 19, 2011 12:02 PM (OhYCU)

195 I don't care if you call it a VAT, a flat tax, or a Martian tax, a dollar is a dollar. $1 trillion dollars raised under any name is still $1 trillion. Instead of trying to figure out "new" ways of raising $1 trillion, we need to be looking into ways to spend $1 trillion or less. Economics may be complex but it still is governed by the rules of common sense.

Posted by: Steve Lockridge at October 19, 2011 12:11 PM (+ds8F)

196 from her site...
Bachmann as President: American Jobs, Right Now Blueprint for Economic Prosperity and Job Creation

REPATRIATION. More than 1.2 trillion United States dollars could be brought back to America in days as an immediate "stimulus" if the government would zero out the tax rate on that money until December 31, and then permanently keep it here in the U.S. if taxed at a rate of 5 percent. ...

CUT SPENDING AND GOVERNMENT. Phase out quasi-governmental enterprises, such as Fannie and Freddie, and eliminate duplicative government programs and costs. Decrease government salaries to bring them in line with their private sector counterparts, and we must decrease the number of government employees.

REPEAL OBAMACARE.

CUT TAXES. Reduce the number of tax brackets, repeal taxes outlined in Obamacare, fix the Alternative Minimum Tax, and eliminate the Death Tax. Make the corporate tax code simpler and fairer, and allow U.S. companies that generate earnings overseas to bring back those profits to invest stateside in American jobs and growth.

REPEAL THE JOBS AND HOUSING DESTRUCTION ACT, ALSO KNOWN AS DODD-FRANK.

LEGALIZE AMERICAN ENERGY PRODUCTION AND AMERICA'S NATURAL RESOURCES.

REPEAL JOB KILLING REGULATIONS.

INCREASE EXPORTS (vs. Obama Labor Union favoritism)

UNLEASH AMERICAN INVESTMENT. We must do whatever it takes to restore our ability to manufacture here in the U.S.

PAVE A PATHWAY FOR INNOVATION. (beware Bachmann using government intervention here rather than government hands off policy)

ENFORCE AMERICAN IMMIGRATION LAWS.

Posted by: Why Michele? at October 19, 2011 12:13 PM (lpWVn)

197 Youre pissed off because the name is the Fair Tax Plan? Do you believe the authors are trying to hide the fact that it is a sales tax?
Nope. I dislike the "Fair" Tax for a couple of reasons. First, it hits more consumption orientated people more than non-consumption orientated. Thus, there is a disincentive to inject cash into the system. While there may be an incentive to invest capital, that investment is not productive if there is not a market for that investment to produce a product for. Second, it initially is inflationary. Third, contrary to what it advocates argue, it will not actually deter higher taxes. The argument goes that once "everyone" gets some skin in the game, it will be harder to raise taxes. Instead of 5% increases here and there, you will merely see 1/4% ofa raise in the sales tax here and there. Don't believe me.......go look at the history of any state that has a sales tax. It is always done the same, 1/4% here, 1/4% there. And the sales pitch is always the same "for a penny more on a gallon of milk, you get better schools!". Well, who wouldn't pay a penny more on a gallon of milk for smarter kids....uh, me. Because it just isn't a penny on a singular gallon of milk. Assuming a consumption rate of 95%, a 1/4% increase in the "Fair" Tax results in an increased tax bill a year of $1,188 bucks for a wage earner pulling in $50,000 per year. Now, multiply this out every 3 years and see where you wind up at.

Posted by: Mallamutt, RINO President for Life at October 19, 2011 12:16 PM (OWjjx)

198 Herman Cain eliminates the 35% corporate tax plus the 15.3% payroll tax (a direct tax on labor) and replaces them with a 9% corporate tax.
And a 9% sales tax. And a 9% individual income tax.
So, lets look at your 15.3% payroll tax.
For 2010, it isn't 15.3%., The individual portion of Social Security was reduced from 6.2% to 4.2%. Throw in the 1.35% medicare tax and the overall individual tax rate on payroll taxes for 2010 is 5.35%. Which Cain swaps out for a 9% national sales tax.
So, if Cain's plan was implemented in 2010, you would see an increase in wage earner's tax responsibility of 3.65%

Posted by: Mallamutt, RINO President for Life at October 19, 2011 12:20 PM (OWjjx)

199 To take, just for a minute, idea that the point that the 999 plan would raise taxes on lower income earners is "dishonest".

I took a family of 4 making 50,000 per year, and ran them through this year's TurboTax software. In a normal year their total tax burden is $4,591 ($766 income tax + normal payroll taxes of 7.65%). This year their income tax would actually have been -$34 (there is some credit called "making work pay" for $800), and their payroll taxes would have been $1,000 less due to the temporary reduction in rates.

Under Cain's plan, their tax burden would increase to around $6,300 ($4,500 in income tax plus 9% on approximately $20,000 in new purchases. For this year, that's an increase of $3,700, and for a "normal" year it's an increase of $1,700. For those of you who will say that they can just buy used items, I will point out that utilities, gasoline, food probably account for half of that $20K.

My guess is that it's worse for even lower income earners, because their income tax and payroll tax burdens will by definition be even less, but the amount spent on new purchases will remain relatively stable.

For retired seniors at this income level, the current income tax burden would be higher (no child tax credits), but the payroll tax would be non-existent, so the net effect of 999 would be about the same, i.e. a substantial increase for earners at this level.

So it seems to me that the point is not dishonest, but rather realistic. Which makes it an electoral loser. And Cain owns it.

Posted by: TH at October 19, 2011 12:30 PM (T8AL6)

200
"So, if Cain's plan was implemented in 2010, you would see an increase in wage earner's tax responsibility of 3.65%"
IF they spent all their money on new taxable goods.
But what incentive does a sales tax provide? An incentive to SAVE money for retirement or for investment in our economy (the returns from which are taxed at 9% instead of the current and soon-to-be-raised capital gains tax rate of 15%).

Posted by: RokShox at October 19, 2011 12:31 PM (pcly4)

201 Arthur B. Laffer, (71, for those who asked), in the WSJ:
<em>Still, a number of my fellow economists don't like the retail sales component of the 9-9-9 plan. They argue that, once in place, the retail rate could be raised to the moon. They are correct, but what they miss is that any tax could be instituted in the future at a higher rate. If I could figure a way to stop future Congresses from ever raising taxes I'd do it every day of the week and twice on Sunday. Until then, let's not make the perfect the enemy of the good.</em>
Cain has us talking about reforming the tax code. That's a good thing. But by all means shoot him for it. Egads, republicans are the stupid party.
Let's see, Gabriel Malor or Art Laffer? Um, Laffer:
<em>
This is the type of tax increase I wholeheartedly support. I support collecting more in taxes from people with high incomes who choose to actually pay taxes at lower tax rates than use lawyers and accountants to avoid taxes at higher tax rates. Some tax revenues at low tax rates is a heckuva lot better than no tax revenues at high tax rates.</em>

Posted by: Carmelita at October 19, 2011 12:32 PM (Y/2U4)

202 RokShox: no, Mallamutt's point about 3.65% was only dealing with the payroll tax vs. flat 9% income tax comparison. The 9% sales tax is added on top of that. And, again, you can't buy used food, utilities, or gasoline.

Posted by: TH at October 19, 2011 12:36 PM (T8AL6)

203
TH, then what did he mean by
"Which Cain swaps out for a 9% national sales tax."

Posted by: RokShox at October 19, 2011 12:39 PM (pcly4)

204 Also, what about the business tax being collected on "Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports". Walmart has a huge negative "net export" number. So now they will have to pay a 9% tax on their imports (negative net exports = net imports)? Wow.

Posted by: TH at October 19, 2011 12:43 PM (T8AL6)

205 The best part of Cain's plan is where he throws out the current system. Unfortunately, his 9-9-9 plan is rather half-baked and is rightly subject to criticism. He should have proposed going with a flat tax or better yet the FairTax. A lot more thought has gone into these proposals and have a large number of advocates able to defend them. Cain looks ridiculous trying to defend his plan with that apples and oranges argument.

http://pafairtax.org/resrcs/FlatTaxFairTaxComparison.pdf

Posted by: TobyTucker at October 19, 2011 12:52 PM (UKW2o)

206 RokShox: interesting point. Everything about Mallamutt's post indicates that he is comparing the payroll tax with the income tax, except that he says "sales tax" at the last minute. I just read him the way that makes sense (i.e. swaps out for 9% income tax) instead of the way he wrote it.

You can't compare payroll and sales taxes, precisely because people do not spend 100% of their income on items that would be covered by the sales tax. The 3.65% number, however, does exactly match the difference in payroll tax vs. income tax. The sales tax on purchases is therefore an add-on above and beyond the additional 3.65% identified by Mallamutt.

Posted by: TH at October 19, 2011 12:56 PM (T8AL6)

207 let's just put to rest the idea that all taxes are paid by the consumer.
here's a good example:
1. product is sold for $10 with $1 of embedded taxes paid by the customer and $1 of profit made by the producer
2. embedded tax rate increases 50%
3. product is priced at $10.50
4. product is placed on sale after sitting in inventory for weeks and sold for $10

who paid the increased taxes?

Posted by: matt at October 19, 2011 01:28 PM (nxTmu)

208 It's not just the plan that people are criticizing, it's Cain's horrid salesmanship of it. I'm not sure if he knows what he's talking about, but he gives the impression that he has no idea what he's talking about.

If you walked in to a Godfather's Pizza and wanted the kid behind the counter to tell you about the pizzas they sell and he says " Uh... go to the website..."
you'd be thinking what exactly after you walk out? I don't think he realizes HE'S the salesman for his ideas.

I shudder to think what Obama would do to him in a debate. Calling Adm. Stockdale.....

Posted by: jwillmoney at October 19, 2011 02:03 PM (fOFCE)

209 Matt,

All taxes are paid by the consumer. There is no special pot of money available to corporations other than what they receive from end users. Whether a tax is charged at the end or priced into the product, the only people who pay is the consumer.

Posted by: jwest at October 19, 2011 02:35 PM (qeYI9)

210
#205...there is NO viable candidate with a plan to get rid of the income tax. The only viable candidate who wishes to change the current tax system is Cain. It just so happens that Cain's plan is the only one that could possible get through congress with some adjustments.

The democrats at this point in time will not agree to a flat or fair tax on consumption only. Any candidate who says they are better than Cain because of that should leave the stage because they don't have a viable plan and are only talking it up to try to get votes.

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211 Obama is a stuttering clusterf*ck of a miserable failure.

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Posted by: The Rare Find ePub at October 19, 2011 11:23 PM (RlX/u)

216 Andy: It seems as accurate to call it a modified income tax as it does a modified VAT. Either way, it's not what we normally think of as either a VAT or an income tax.

Gabriel Malor: Do you see what I mean. You can't even talk to these people. Nobody is calling his his retail sales tax a VAT. They're talking about his corporate tax.

Actually, Chi-Town Jerry and others in this very thread have been calling his sales tax a VAT, so it's relevant here.


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