Thursday, October 27, 2011

Funny Argument About 9-9-9 Plan

Regarding Herman Cain's 9-9-9 plan there are four things to remember. First, it is actually more like 9-9-9-9, because one of the 9:s is two 9:s, namely the business tax which is 9% of all value added, both profits and labor cost, meaning it is a combined 9% payroll tax and 9% corporate income tax. Second, because it reduces marginal tax rates it will boost growth. Thirdly, despite the former point it would likely mean lower revenue. And fourth, because it also has the effect of redistributing the tax burden from the rich to the poor and the middle class, it is politically impossible. If Cain became the Republican nominee, the Obama campaign would have a field day pointing to how it would increase the middle class tax burden while reducing taxes for the rich. And even if by some miracle Cain became President, it wouldn't pass Congress.

The funniest (but obviously not valid) argument against the plan was this point from Cain's rival Michelle Bachmann.


Blogger Vegard said...

Remember that he has made some changes to his plan to make it more progressive.

Although, they are not well known right now. They will be if Obama uses 999 as an argument against him.

3:17 AM  

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