Ramesh Ponnuru on Cain's imbecilic "9-9-9" tax plan

[Unabogie]

A mathematician isn't an economist. Neither is an accountant (the degree held by the guy who came up with the plan).

However, there has been enough analysis of the plan (by both conservatives and liberals) that Cain should know the implications by now. I'm not sure if politically he can admit that the plan is a bad idea at this point.

-Bri

Neither of us (I assume) are economists. Yet we both know what the plan would do. To assume Cain doesn't is nonsensical to me.

 

[ponderingturtle]

Ideally, yes. Parsing out taxes according to benefits and services received becomes unworkable though, so a good alternative is a flat tax like Cains proposal.

I like it. Remove the child tax credit and institute a child tax.

 

[varwoche]

A mathematician isn't an economist. Neither is an accountant (the degree held by the guy who came up with the plan).

However, there has been enough analysis of the plan (by both conservatives and liberals) that Cain should know the implications by now. I'm not sure if politically he can admit that the plan is a bad idea at this point.

You're cutting him too much slack.

Especially since his final plan consists of a 30% sales tax, period. The average geranium knows this shifts tax burden from rich to poor.

 

[Neally]

Some of the services are for people who would otherwise be destitute. How would people with nothing pay for services that keep them alive?

If they have no income and don't buy anything, they pay no taxes, obviously.

 

[Spindrift]

Ideally, yes. Parsing out taxes according to benefits and services received becomes unworkable though, so a good alternative is a flat tax like Cains proposal.

Why is a flat tax a good alternative? The effect on poor people is much greater than the effect on rich people.

Under Cain's plan he suggested that poor people just buy more used goods. Why don't the rich people just buy smaller homes and cheaper cars? Then they'd have more money for taxes.

 

[Unabogie]

If they have no income and don't buy anything, they pay no taxes, obviously.

Right, but people can work and still not have enough income. This is why why have a sliding scale on taxes and services. If you work, yet don't make enough for food so you need to get food stamps, why is taxing you more money (beyond the state taxes, sales taxes, fees, and payroll taxes you already pay) better than asking someone making millions to pay a tiny fraction more? Why are you for raising taxes, but only on poor people?

 

[Newtons Bit]

Why is a flat tax a good alternative? The effect on poor people is much greater than the effect on rich people.

Under Cain's plan he suggested that poor people just buy more used goods. Why don't the rich people just buy smaller homes and cheaper cars? Then they'd have more money for taxes.

Indeed. Though I'm not sure why buying used goods would help people out under Cain's plan. The sales tax is still there, as is the business tax. People are still being hit by an 18% sales tax.

A marginal flat income tax (weird name, I know) makes sense to me. Huntsman, unsurprisingly, is proposing such a system. Why can't the sane and intelligent Republicans get nominated anymore?

 

[Neally]

Why is a flat tax a good alternative?

Because everyone needs to pay for our government services. Everyone pays the same percentage.

If you work, yet don't make enough for food so you need to get food stamps, why is taxing you more money (beyond the state taxes, sales taxes, fees, and payroll taxes you already pay) better than asking someone making millions to pay a tiny fraction more?

Because it's the fair thing to do. Everyone enjoys the benefits of our government, everyone should pay.

Why are you for raising taxes, but only on poor people?

I'm for everyone paying for the services of the government, including the poor.

 

[Biscuit]

Which is about time the poor start paying more for the government services that they use as much or more of.

Because it's the fair thing to do. Everyone should help pay for the government services that we all enjoy.

So its the fair thing to do when it comes to social services...

So farmers should pay more taxes because of the subsidies they receive?

Ideally, yes. Parsing out taxes according to benefits and services received becomes unworkable though, so a good alternative is a flat tax like Cains proposal.

But it becomes unworkable when it comes to government subsidies. How does a flat tax ensure that farmers or oil companies pay for their government subsidized existence?

Can anyone provide an analysis of the 9-9-9 plan that shows a favorable result to any group other than the top 1 to 2 %?

 

[Spindrift]

Because everyone needs to pay for our government services. Everyone pays the same percentage.

Even if some can afford to pay more and some can't afford to pay any in order to just live?

Because it's the fair thing to do. Everyone enjoys the benefits of our government, everyone should pay.

That's not how it works. There is the common good.

I'm for everyone paying for the services of the government, including the poor.

So the people who need the service because they don't have enough money should be made to pay for that service?

 

[Bri]

Neither of us (I assume) are economists. Yet we both know what the plan would do. To assume Cain doesn't is nonsensical to me.

I guess I meant that Cain probably didn't know the implications when his accountant dreamed the plan up. I don't even think the accountant knew.

I only know what the implications of the plan are because of what I've read. Not being an economist, I'm not sure I have the knowledge myself to tell just from reading the plan what the implications would be.

But you have a point -- I know now what the consequences would likely be, and so should Cain.

-Bri

 

[Bri]

You're cutting him too much slack.

Especially since his final plan consists of a 30% sales tax, period. The average geranium knows this shifts tax burden from rich to poor.

Maybe you give him too much credit in assuming he knows more about the economy than a geranium.

-Bri

 

[Neally]

So its the fair thing to do when it comes to social services...

But it becomes unworkable when it comes to government subsidies. How does a flat tax ensure that farmers or oil companies pay for their government subsidized existence?

All other tax breaks and loopholes are eliminated with Cains plan.

A direct payment type of subsidy is a different story. That's something that needs to be addressed through the legislature, not the tax code.

Even if some can afford to pay more and some can't afford to pay any in order to just live?

The government doesn't stop needing to be funded just because someone is poor. Everyone needs to pay up.

So the people who need the service because they don't have enough money should be made to pay for that service?

Clearly they don't pay a dollar for dollar, but everyone has to help pay for the government.

 

[eeyore1954]

Then there's the question of what happens to the manufacturing sector when poor people are all buying used stuff....

They have to manufacture used items?

On the oft chance that he was elected I cannot see the 9-9-9 plan becoming law.

 

[Spindrift]

All other tax breaks and loopholes are eliminated with Cains plan.

A direct payment type of subsidy is a different story. That's something that needs to be addressed through the legislature, not the tax code.

The government doesn't stop needing to be funded just because someone is poor. Everyone needs to pay up.

Clearly they don't pay a dollar for dollar, but everyone has to help pay for the government.

They do help. What amount is enough if not dollar for dollar?

 

[ponderingturtle]

They do help. What amount is enough if not dollar for dollar?

A bit more than dollar for dollar to cover administrative overhead.

 

[mhaze]

They do help. What amount is enough if not dollar for dollar?

Well, SS and medicare total 15.3% AND everyone pays these amounts that has income. For 2011, there is a 2% discount but let's use the traditional numbers.

Assume that an individual makes so little that he isn't subject to IRS income tax, only the above 15.3%.

Cain would tax him 9% income tax flat rate, and 9% on consumption.

IF he spent every last dime on consumed items, he'd pay 18%, slightly more than the 15.3%. It's unlikely that would be the case, though.

You pay someone in cash, or buy something used, or give some money to a dependant, or donate to the church...

I suspect the amount actually paid is about the same.

 

[Spindrift]

A bit more than dollar for dollar to cover administrative overhead.

So you want poor people who need help to pay more than dollar for dollar for the assistance they get?

 

[Spindrift]

Well, SS and medicare total 15.3% AND everyone pays these amounts that has income. For 2011, there is a 2% discount but let's use the traditional numbers.

Assume that an individual makes so little that he isn't subject to IRS income tax, only the above 15.3%.

Cain would tax him 9% income tax flat rate, and 9% on consumption.

IF he spent every last dime on consumed items, he'd pay 18%, slightly more than the 15.3%. It's unlikely that would be the case, though.

You pay someone in cash, or buy something used, or give some money to a dependant, or donate to the church...

I suspect the amount actually paid is about the same.

SS and medicare total 7.45% for the employee. (except this year, it's 5.45%)

 

[AlBell]

Because it's the fair thing to do. Everyone should help pay for the government services that we all enjoy.

So farmers should pay more taxes because of the subsidies they receive?

Subsidy payments increase taxable income.

And there is no good reason nearly half of the US taxpayer base should pay no tax.