As a general rule, I’m wary of any plan that claims to have completely solved all of our woes in one manner or another. Especially when that plan is so simple it can be slapped on a two page pamphlet that’s 60% presidential boilerplate.
Herman Cain’s 9-9-9 plan is the latest that seeks to simplify the tax system to the point that we don’t need the IRS any more. As always, it’s a flat tax system, actually similar to the Fair Tax plan, except spread across income, sales, and corporate taxes at (surprise!) 9% each. That’s probably where the 9 came from, it’ll approximate the FT’s 23-26% number.
Given the incredible lack of detail in the plan, there’s not much to say about it without spending a long damn time crunching numbers to see how much actual revenue it’d generate, but I did see something interesting: this all ends up as one gigantic tax gift for corporations and the top percenters again.
The 9-9-9 plan eliminates the payroll tax and estate tax, which brought in a combined $883 billion in 2010, or about 41 percent of the $2.16 trillion collected by the federal government last year. Cain’s proposal also wipes out taxes on capital gains and repatriated corporate profits.
The Tax Policy Center estimates that cutting capital gains taxes alone would allow 23,000 millionaires to pay no income taxes, a move that would add $11 billion to the deficit each year.
Funny, that. “Simplifying” the tax code suddenly makes for a godsend for the wealthy. Meanwhile, those of us who get tax refunds at the end of the year wouldn’t any more. Class warfare indeed.