BoatShoes;932809 wrote:This is a good idea in my opinion. One way you could do it is alter the deduction for wages as an ordinary business expense and make it a credit. I'm not saying a another new credit but turjning the deduction for wages into a credit. If a corporation is in the top 35% bracket, $1,000 spent on wages only lowers their taxable income by $350 because deductions only shave money off of your taxable income. A credit for wages would reduce tax liability dollar for dollar. Thus, if you spent $1,000 on wages, it would reduce your tax liability $1,000. Still need to have more demand for goods and services and confidence in the economy but I think it would be a good thing because it's a pretty strong hiring incentive.

To temporarily tweak, twist, adjust, tinker, modify, enhance, modify, change, amend, add, delete, and re-think the existing tax code is not going to have long term effects. They've been doing this shit for decades and we now have a 7500 page unintelligible monstrosity that NOBODY on the planet understands. Hell...the Treasury King doesn't even abide by it. To expect minutae enhancements to the existing tax code will magically fix what ails us is folly if not the definition of insanity.

Y'all laugh about Cain and his 999 plan, but he's hitting a homer with conservatives because it is easy to understand, it would be easy to implement, it would put tens of thousands of tax attorneys/accountants out of work, it would castrate the IRS (not kill them, just take away their assumed power), and it stops the social engineering of the tax code that has brought America to today's ultimate clusterphuck. To hell with tinkering, twisting, tweaking, and modifying a failed system. Let's throw it out and start over so as ALL Americans can pay their fair share.

During the boom the income distribution tends to get distorted because inflation directly soaks the poor and middle class sending that money to the rich. The deflation in post bubble corrections is the way wealth is redistributed back to the working class away from the wealthy, by increasing the purchasing power of their stagnant or slowly growing wages.

Problem is, we haven't had a real recovery since the early 1980s, because since then every time a slow down presented itself we had the Fed prime the pump with even lower interest rates and we just blew up another bubble to replace the last one, so we have just been making the disparity worse and worse, and it will keep getting worse until we allow the economy to correct itself.

BGFalcons82;932816 wrote:Y'all laugh about Cain and his 999 plan, but he's hitting a homer with conservatives because it is easy to understand, it would be easy to implement, it would put tens of thousands of tax attorneys/accountants out of work, it would castrate the IRS (not kill them, just take away their assumed power), and it stops the social engineering of the tax code that has brought America to today's ultimate clusterphuck. To hell with tinkering, twisting, tweaking, and modifying a failed system. Let's throw it out and start over so as ALL Americans can pay their fair share.

This. People are sick and damned tired of the federal government trying to engineer our lives and businesses via the tax code. The federal tax code is a 7,500 page behemoth that no one person can decipher without investing countless hours of research. You have to have to hire a legal or accounting firm to wade through the morass for fear you you afoul of it. If you miss something in those 7,500 pages prepare to pay heavy punitive fines. 9-9-9 is so simple. Profits x.09, Income x .09, new purchases x .09. People know what the government is taking from them. No hidden hocus pocus.

Opposition will be fierce. It takes power away from the feds to engineer our lives and businesses. Its so simple Americans that are not mentally challenged can do their own taxes if they want. Cain has far less money than his opponents. His 9-9-9 plan is what has propelled him to front runner status. Average people like it.

BGFalcons82;932816 wrote: Y'all laugh about Cain and his 999 plan, but he's hitting a homer

Fundamentally, I like it. Taxes on production are universally recognized as a drag on growth, and all taxes are bu consumption taxes are considered superior. And there is a tremendous waste of resources to do taxes. It may not be all that significant as a % of GDP, but then there are also all those accountants who had 0 real productive value. Stands to reason with a need for far fewer accountants, the skills and talents of those people could create value in other ways.

Problem is, the tax code didn't start out complicated. It's when the govt decided to get into the business of personal and corporate welfare that things ran afoul. Such social agendas are always going to result in added complexity, to try to right perceived inequalities via the tax code. That was part of the problem with FairTax as they were already starting off with prebates and exclusions.

Doesn't matter how simple or fair a tax system is on the surface, there will always be winners and losers that the do-gooders feel compelled to try to correct. I suppose theoretically you could completely separate welfare and "credits" and just pay it out of a pot (which people would go through another system to file for) collected from all taxes. Question then becomes where such people get the money to pay their annual liability while they wait for their check to come from the gubmit. On the other hand, if it's withheld from paychecks and the consumption tax is taken at the register, then I guess there would be no tax return to file and no liability accumulated (other than capital gains).

gut;932929 wrote:Fundamentally, I like it. Taxes on production are universally recognized as a drag on growth, and all taxes are but consumption taxes are considered superior. And there is a tremendous waste of resources to do taxes. It may not be all that significant as a % of GDP, but then there are also all those accountants who had 0 real productive value. Stands to reason with a need for far fewer accountants, the skills and talents of those people could create value in other ways.

OK, you can probably get me to agree consumption taxes are a larger drag on growth. However, I would only agree if the rates were equal. As we all know, the current corporate tax rate on profits is 35%. Cain is proposing 9%. I'm thinking the corporate income tax being nearly 4 times more punishment than Cain's 9% swings the pendulum of growth inhibitors strongly away from Cain's side.

Additionally, there is a huge new source of revenue with the 9% sales tax. Currently, tourists, illegal aliens (what are the estimates...11,000,000 of them?), and those dealing in illegal transactions (money laundering, drug dealing, embezzling, Wall Street tycoons (sorry...couldn't resist a jab at the loons), and day laborers receiving cash payments for wages) pay $0 to the Treasury. Oh wait...if they declare their illegal activity and pay tax on it, they are good to go. I wonder if there is 1 moron like that, but it's in the tax code. Not to mention the evil rotten scum rich turdsicles that only pay 15% in capital gains taxes...they can't get away with not paying their fair share now.

I'm nervous about the likes of communists like Nancy Pelosi getting their claws on yet another tax that they can raise. Cain sees this as a large issue as well, so he's wanting a 2/3rds majority to pass such changes. At this point I'd like to learn more about the 9-9-9 as I find it a far better solution than the never-ending tweaking, twisting, editting, and amending of the 7500 page albatross known as the tax code and social engineering manifesto.

Cain's plan is really getting picked apart by both Dems and Repubs. Cain is not doing a good job answering some of the questions about the 999 plan.


I think the problem with Cain is that he honestly never thought he would become a mainstream candidate. When I hear him talk, it is usually (Well I don't have facts or I don't know, Ill ask my advisor.)

pmoney25;932950 wrote:Cain's plan is really getting picked apart by both Dems and Repubs. Cain is not doing a good job answering some of the questions about the 999 plan.


I think the problem with Cain is that he honestly never thought he would become a mainstream candidate. When I hear him talk, it is usually (Well I don't have facts or I don't know, Ill ask my advisor.)

You are right about your "mainstream candidate" comment. He is NOT a career politician, he's an American citizen that's fed up with the way business is run in DC and he's trying to be different on purpose. By the way, when people like Barry stand up there and claim to know-it-all, they scare me more because nobody knows everything....not even Warren Buffett.

Regarding his plan getting picked apart...what would you expect? New conservative ideas always get shredded by the media and professional politicians when they feel a threat to their honey-pot. Attacking lobbyists' domains, corporate cronys, and business-as-usual types always gets a negative reaction. He has to do what Reagan did...bypass the media/punditry/leeches and speak DIRECTLY to the American people. Reagan was a master at getting the public behind him to get what he wanted. Cain appears to have a gift of gab to get it done as well. Time will tell.

BGFalcons82;932944 wrote:OK, you can probably get me to agree consumption taxes are a larger drag on growth.

Agree with most everything you wrote. Consumption taxes are considered superior, i.e. LESS of a drag, because taxes on production choke growth.

Also, it varies widely but I think the average effective corporate rate is something like 27%?, maybe 22% (it's messy depending on if you include debt interest, S corps, etc...), but the gap is not as large as you think. And with the 9% consumption tax, assuming EVERY transaction is taxed you're already up to 18%. And eventually just going with a 30% sales tax is a recipe for disaster - no economist worth a shit thinks compliance doesn't drop off a cliff at a rate that high, making the revenue neutral rate much higher. It won't work - Europe has VAT's ranging from @15-19% and have found higher rates aren't really effective. Oh, and they all still have income, property and other taxes (including SS). That's why I think something on the order of 9-9-9 could be interesting, but FairTax is DOA.

I think it could be really good for growth, but without reading more it would seem to fall well short of revenue neutrality (not that huge cuts don't need to be made). Letting the govt get their hands on a consumption tax is asking for disaster as well.

gut;932995 wrote:I think it could be really good for growth, but without reading more it would seem to fall well short of revenue neutrality (not that huge cuts don't need to be made). Letting the govt get their hands on a consumption tax is asking for disaster as well.

I agree. Cains 9-9-9 plan does allows the feds to get their hands on a 9% consumption tax in exchange for the feds getting their hands off FICA, capital gains, and the death tax. More transparency for the individual.

Regarding the FICA taxes. Cains plan factors in the tax payers getting the full 15.3% FICA tax into the tax payers pockets. Half of that is employer matched. It will take some kind of federal law to assure all employees get a 7.65% raise upon it becoming law. Employers will be glad to get that albatross of their necks. But like I said a federal law will be needed to keep those that would take advantage of it to put money in their pockets. This would be a good question for Cain. No one has asked it yet.

I appreciate what Cain is trying to do with 9-9-9, and I agree that consumption taxes are better than income taxes because they encourage savings, which our economy desperately needs.

Something like the Fair Tax at least had adjustments in it to try to make it progressive. The fact of the matter is that the federal government is so big that the Fair Tax rate would have to be way so high that we couldn't afford to make it truly progressive because most consumption comes from the lower income levels.

A better solution would be to cut the size of the federal government in half or more and then try a smaller fair tax where you could set it up to ensure it is progressive enough to gain bipartisan support.

Fact is, 9-9-9- will never pass. You think Americans are going to rally behind increasing their taxes while cutting taxes for the rich? It will never happen.

It is funny to watch him squirm when he gets questioned about it, because he has no idea what he is talking about. He is as ignorant as he said the people who question him about the Fed are. All he knows is 9-9-9 and that he is rising in the polls every time he says it. He doesn't know that he is rising in the polls because he is on every TV network every day and he is a very good speaker. People aren't endorsing 9-9-9, they don't even know what it is yet. They are endorsing the guy who is constantly on TV and isn't Mitt Romney.

majorspark;933004 wrote: Regarding the FICA taxes. Cains plan factors in the tax payers getting the full 15.3% FICA tax into the tax payers pockets. Half of that is employer matched. It will take some kind of federal law to assure all employees get a 7.65% raise upon it becoming law. Employers will be glad to get that albatross of their necks. But like I said a federal law will be needed to keep those that would take advantage of it to put money in their pockets. This would be a good question for Cain. No one has asked it yet.

A law to interfere in wages is something I would expect from a guy who has showed his disdain for the free market in the past.

Cleveland Buck;933013 wrote:A law to interfere in wages is something I would expect from a guy who has showed his disdain for the free market in the past.

Cleveland buck you know better than this. It is not a law interfering in wages. Wages do not change. It is merely correcting the hidden tax that most Americans have no idea they are paying. A tax I might add forced by federal legislation. It only makes sense that federal legislation corrects it. Americans need to see first hand the taxes they are paying. With transparency changes will follow.

majorspark;933004 wrote: Regarding the FICA taxes. Cains plan factors in the tax payers getting the full 15.3% FICA tax into the tax payers pockets. Half of that is employer matched. It will take some kind of federal law to assure all employees get a 7.65% raise upon it becoming law.

FairTax is DOA for a variety of reasons. It's just putting new clothes on the emperor. It's appeal of simplicity goes out the window as soon as you start talking prebates and exclusions.

The FICA is a very dodgy question and only part of wage increases that would be necessary not to adversely hurt the average Joe. I forget the exact arguments because it's relatively complex, but essentially either wages have to rise or prices have to fall for the worker to see no real loss of purchasing power. Reality is pricing and wage power are not uniform, and companies will have varying degrees of market power to keep wages steady or hold/raise prices. This will create winners and losers which, of course, the do-gooders will seek to redress with further complications of the prebates and exclusions.

Economists make their share of mistakes, are prone to play politics, and are known to have been bought...yet practically no heavyweight economist considers FairTax to even be worthy of commenting on, beyond a handful who have more or less said revenue neutrality at 30% is a pipe dream...the real revenue neutral rate is much higher. Imagine having to pay a 50% sales tax on that new car you want to buy. It's simply not feasible. Even the proposed 30% would cause a huge retraction in the purchase of new goods, hence the necessity of those corporate tax savings to be passed on to the worker either via higher wages or lower prices.

Cleveland Buck;933006 wrote:Fact is, 9-9-9- will never pass. You think Americans are going to rally behind increasing their taxes while cutting taxes for the rich? It will never happen.

You could say the same for Paul. If Cain were elected president mainly on his 9-9-9 plan he would have one hell of a mandate. If Paul won the presidency he would have a hell of a mandate as well. Paul is just not gaining any traction. Hell Newt is surpassing him in some polls.

Cleveland Buck;933006 wrote:It is funny to watch him squirm when he gets questioned about it, because he has no idea what he is talking about.

I don't see him squirming. The voters don't see it that way either. If they did he would not be rising in the polls. Cain appears bold and confident.

Cleveland Buck;933006 wrote:He doesn't know that he is rising in the polls because he is on every TV network every day and he is a very good speaker.

Cain is not a good speaker. He has a backwoods southern accent. Negro dialect if you will for the Harry Reid type democrats. What propels him is his unwavering passion and a simple idea. One even the masses can understand.

Cleveland Buck;933006 wrote:People aren't endorsing 9-9-9, they don't even know what it is yet. They are endorsing the guy who is constantly on TV and isn't Mitt Romney.

You just don't get it. You and I are very educated. We keep up on politics, history etc. This is anecdotal but I have had many "uneducated" for lack of a better term, not idiots. Just people who did not pursue a formal education and pay scant attention to politics singing Cain's praises. When I engage them with a few questions they tell me I get this. I understand this and It makes sense. I have guys on the production floor TIVOing the debate. In my opinion they see the passion Cain has and its simple enough that they understand it.

The only reason Cain is on TV is people are gravitating to the simplicity of his plan. They are tired of the bullshit. Be transparent and put it out there. The Ronulans are upset because their candidate is not connecting with people. So they claim people are to dense to get the 9-9-9 plan and the press just is not giving Paul a fair shake. Paul is a free market guy. He should come up with a bold simple plan to rival Cain's. The Ronulans should be pushing Paul to come up with a competitive simple plan that the average American can wrap his brain around and Paul could passionately defend. Instead they whine about press coverage.

I have issues with every candidate. I would likely vote for Paul if he became a viable candidate. There is a lot of time left. You Ronulans need to quit whining and press Paul to come up with a simple plan that he can passionately defend. Paul is out there trying to shove porter house steaks down the throats of babes. Use a little innovation without compromising your principals. It can be done.

pmoney25;932950 wrote:Cain's plan is really getting picked apart by both Dems and Repubs. Cain is not doing a good job answering some of the questions about the 999 plan.


I think the problem with Cain is that he honestly never thought he would become a mainstream candidate. When I hear him talk, it is usually (Well I don't have facts or I don't know, Ill ask my advisor.)

Agreed. I like him a lot, but you can tell he never once dreamed he'd get this far. He needs to sit down and start coming up with solid answers to some of these questions if he wants to be a player going forward.

Once people realize that 999 does nothing to fund social security/medicare, he is done. He cant even answer questions about if items like milk,bread, beer etc will be taxed like that.

Dont get me wrong I like Cain. Im just saying that the more people find out about 999, the quicker he will slide down the polls.

Cleveland Buck;933006 wrote: All he knows is 9-9-9 and that he is rising in the polls every time he says it.

I remember a guy rising in the polls and all he said was "hope and change".

Perhaps the biggest issue with 999 is how you transition to it, as we are all 'hooked' to the existing system in very big ways.

I don't think you look at 9-9-9 as a finished product, but as a framework for a change(sorry to use that word) to the better. Even if Cain were to get elected, 9-9-9 would not pass congress verbatim, line for line. While the devil may be in the details, I don't think that is as important as getting the mandate to make the change to that type of system. I think that is what a lot of people are looking for. They know what we have is not working, and they like the framework Cain is proposing.

I have absolutely no problem with a candidate saying he doesn't know, wants to study it more, or defers to an advisor. That is the mark of a thoughtful man. I for one, don't want another demagogue.

http://online.wsj.com/article/SB10001424052970203499704576625370854781778.html


[h=1]The Panhandler and the President [/h][h=2]I do not recall another president whose negative drumbeat about large segments of the population has been so relentless.[/h]

[h=3]By DAVID MOORE [/h]Walking down New York's 55th Street near Park Avenue last Friday evening, our group of seven men in suits and ties was approached by a panhandler asking for money.
"Here are a bunch of Wall Street guys," he said, straight out. "Give me some money."
Although we were not all "Wall Street guys," all except one kept walking, ignoring the panhandler as we typically do, as instructed by "experts." Yet over the past 30 years of living in the city, I often have disregarded this advice, and so once more I gave instinctively. I pulled out a dollar, handed it to the man, smiled, and resumed walking.
But next came a revelation.
"A dollar?" the man shouted. "You Wall Street fat cats! This is what the problem is with this country. Take your damn dollar." With that, he threw it on the sidewalk.
Apparently, street charity now has a minimum.
Not only have I never had anyone refuse my donation under such circumstances, but recipients are generally quite appreciative regardless of the amount. Not this time. It was as if the class-warfare rhetoric of the left had surfaced on 55th Street, while I was just trying to show some goodwill and help a guy out. He didn't even ask for a little more, as sometimes happens. ("How about $5 for a meal? . . . $20 for a bus ticket?") He simply judged that my $1 gift was not sufficient and threw it on the ground. I had not given my "fair share."
Where did this script—and its concomitant anger—come from?
Like most people I know, I think President Obama's tax increases on the wealthy would make sense if we believed he was sincere about—and could be successful at—reforming Washington's overspending, out-of-control entitlements and regulation. Instead, his attacks on Wall Street bankers ("fat cats," a phrase Mr. Obama now owns and was eloquently repeated by the panhandler on Friday night), Las Vegas, oil companies, jet manufacturers and "millionaires and billionaires" are inflaming both sides and placating no one. They seriously undermine the chances for reasonable compromise.
The president's incendiary message has now reached the streets. His complaints that rich people must "pay their fair share" have now goaded some of our society's most unfortunate, including one who felt compelled to refuse money because it was not enough. President Obama has become the "Great Divider" instead of the "Great Unifier" that we all hoped he would be.
I do not recall another president in my lifetime whose negative drumbeat about large segments of the population has been so relentless. I do not recall another president (even those similarly frustrated by congressional gridlock and the stifling of their agendas) repeatedly targeting a specific economic class, complaining as loudly and using his bully pulpit so consistently for bashing those who disagree with him.
Presidents, once elected, instantly become president of all the people. They are the ultimate parental figures who should show no favoritism while always reaching across the dinner table to keep the family together. Even when they are confident their plan is the right one, they must communicate it such that everyone in the family knows they care equally about each of them. Painting important parts of our economy and population with such a negative brush is not only un-presidential, it is destructive to the fabric of our nation.
An isolated incident on 55th Street? Perhaps. But in a sample of more than a dozen people I know who have collectively given money to panhandlers well over 1,000 times in New York during the past few decades, not one could recall ever being turned down, much less having their money tossed away as insufficient. The rhetoric of class warfare has now invaded spontaneous charity.
Mr. Moore, chairman and CEO of Moore Holdings, is a trustee of several New York City charities.

pmoney25;933128 wrote:He cant even answer questions about if items like milk,bread, beer etc will be taxed like that.

Trick question. Yes, the plan requires that they be taxed. No, in reality, they will be excluded or prebates will be provided.

gut;933198 wrote:Trick question. Yes, the plan requires that they be taxed. No, in reality, they will be excluded or prebates will be provided.

Regarding groceries and staples to live on: It is indeed a trap question to make Cain look like a big mean Republican...taxing food for the poor while giving tax breaks to the rich. Off with his head they say!

The real answer is that people are currently purchasing bread, milk, food, etc. with money that was ALREADY taxed. Even if they have have a minimum wage job, the 15.3% FICA tax was withheld from their paycheck prior to them cashing it. I can't remember who said it first (maybe Wm F. Buckley?), but they claimed the real devil in the tax code is the employer's mandatory withholding of taxes from worker's paychecks. This way, the confiscation appears normal, customary, and the worker won't miss what they never had. If people were given their full amount of pay and then asked to write checks to the feds, the state, the locals, etc., that there would be far more outcry about where their tax money goes and what it pays for. Mandatory withholding is like oxycontin...it takes the pain away as the patient gets reamed.

In order to balance the budget under 9-9-9, we would have to cut $1.5 trillion in federal outlays, an amount equal to social security and the defense budget, combined. We can't even get cuts of $1 trillion over a decade let alone for a single year. Also, the effect on GDP of such cuts would be phenomenal. Additionally, the sales tax that will largely be absorbed by the middle class will have harmful effects on economic growth given that demand for products, goods and services is already depressed.

John Huntsman's "8-14-23" plan is much better and more closely mirrors what was proposed in Bowles-Simpson eliminating many deductions and credits to make the code more "simple." Nobody conservative will vote for him though.

As an aside, Here's a link to Herman Cain's article supporting TARP: http://hermancaintarp.com/2011/09/cain-far-from-nationalization-purchase-of-bank-stocks-is-a-win-win-for-taxpayers/

^^^agreed that transparency is a big issue. I used to say "well, when I do my taxes every year I see a big number knowing what I pay to the federal govt"....Of course, that was before I realized some 40% pay no federal income taxes.

Just be VERY WARY of economic theory arguing magical and quick adjustments to wages and prices. The real world has frictions and imbalances that can affect a very different outcome than imperfect models predict. Sure, you can take home your 15.3% FICA, that one is fairly easy. But FairTax calls for 23% tax, so you have an 8% shortfall that requires either higher wages or lower prices....and this is before we complicate matters with prebates and exclusions.

The best argument I've seen is that EVERYONE should pay SOMETHING to the federal govt, even if only 1-2% because we all need to have a stake in bloated govt. When 47% of people pay no federal income tax, they have no skin in the game regarding a bloated and inefficient govt.

Bill Maher the other day is arguing "vote for your economic interest....I can't understand why 99% of people don't vote Democrat". Because some people actually understand economics, Bill, and steaming ahead toward European-style socialism will only further weaken the economy and leave EVERYONE worse off. Of course, that may be a preferable outcome in the warped mind of some liberals because what really pisses them off is the gap between rich and poor, not how truly bad off the poor and middle class are.

Liberals hate the big, evil and greedy corporations...why then do they look to the largest, most ineffective, inefficient and poorly run "corporation" in the world - the US govt - to fix the inequities? They are only exacerbating the problem by looking to big govt for a solution and are too ignorant and naive to realize it.

BoatShoes;933226 wrote:Also, the effect on GDP of such cuts would be phenomenal.

While I mostly agree with what you wrote, I'd challenge the above assumption. Middle men (which the US govt is basically) always extract non-value added wealth. The sheer amount of waste and inefficiency could probably remove 100's of billions of govt spending with no adverse impacts on the economy. And only deficit spending is accretive to GDP, which itself is a bit misleading because, in fact, taxes are dilutive to GDP. Technically, deficit spending is not "stimulus" but just deferred future taxes. We need to be careful about a shock adjustment to the economy, but it is always better for the economy to leave $1B in the hands of consumers and business than for the govt to confiscate it to spend on pet projects.

Basically what I would argue is that while a meat-cleaver approach to cut $1T would negatively impact the economy, a calculated approach would offset a significant amount of the impact by cutting waste and inefficiency. I think there's easily more than 20% waste and inefficiency, which would be something like $750B. Getting the economy healthy and getting back to a historical 18.2% revenue as a % of GDP would easily close the remainder of the gap.