Herman Cain’s rise to the top of the Republican presidential candidate heap has led to heavy scrutiny of his so-called 9-9-9 tax plan.
The centerpiece of Cain’s campaign is a plan to scrap the tax code and replace it flat tax rates of 9 percent on personal income and 9 percent on business income, as well as a 9 percent national sales tax. In a later phase, the plan would eliminate income taxes completely in favor of the “fair tax,” a more far-reaching national sales tax.
Cain’s plan would raise revenue by “drastically increasing taxes on the working poor and middle class, and reducing income taxes going forward on the rich,” according to Edward Kleinbard, a University of Southern California law school professor and former chief of staff of the congressional Joint Committee on Taxation.
Critics say the plan’s national sales tax would hurt the poor and middle class more than the rich, since those groups earn less and spend a greater percentage of their income.
Some conservatives have lauded the plan for getting rid of many income tax deductions, ending capital gains and estate taxes as well as payroll deductions that fund Medicare and Social Security.
“The plan thus has three major virtues: It’s bold, it’s simple, and it’s fair,” Dean Clancy, legislative counsel at FreedomWorks, wrote recently.
Josh Barro, researcher with the free market-oriented Manhattan Institute, wrote in the National Review Online that the business portion of Cain’s plan more closely resembles a value-added tax than a traditional corporate income tax because it taxes businesses on gross income, minus investments, purchases from other businesses and dividends paid to shareholders.
Still, a new poll indicates voters are responding to Cain’s message. A Wall Street Journal/NBC News poll found that 27 percent of Republican voters said they would support the former Godfather’s Pizza executive.
The centerpiece of Cain’s campaign is a plan to scrap the tax code and replace it flat tax rates of 9 percent on personal income and 9 percent on business income, as well as a 9 percent national sales tax. In a later phase, the plan would eliminate income taxes completely in favor of the “fair tax,” a more far-reaching national sales tax.
Cain’s plan would raise revenue by “drastically increasing taxes on the working poor and middle class, and reducing income taxes going forward on the rich,” according to Edward Kleinbard, a University of Southern California law school professor and former chief of staff of the congressional Joint Committee on Taxation.
Critics say the plan’s national sales tax would hurt the poor and middle class more than the rich, since those groups earn less and spend a greater percentage of their income.
Some conservatives have lauded the plan for getting rid of many income tax deductions, ending capital gains and estate taxes as well as payroll deductions that fund Medicare and Social Security.
“The plan thus has three major virtues: It’s bold, it’s simple, and it’s fair,” Dean Clancy, legislative counsel at FreedomWorks, wrote recently.
Josh Barro, researcher with the free market-oriented Manhattan Institute, wrote in the National Review Online that the business portion of Cain’s plan more closely resembles a value-added tax than a traditional corporate income tax because it taxes businesses on gross income, minus investments, purchases from other businesses and dividends paid to shareholders.
Still, a new poll indicates voters are responding to Cain’s message. A Wall Street Journal/NBC News poll found that 27 percent of Republican voters said they would support the former Godfather’s Pizza executive.
