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Herman Cain Admits That His 9-9-9 Plan Is A Tax Increase On the 99%
Herman Cain admitted today on Meet The Press that his9-9-9 plan does raise taxes on “some Americans,” a.k.a. the middle class, the poor, the young, the elderly, the people who are the 99%.
Here is the video from NBC News:
Transcript from NBC:
David Gregory: The reality of the 9-9-9 plan is this, I’ll put it up on the screen. It is to have a 9% corporate income tax. 9% personal income tax. 9% sales tax. everything else is gone.
Herman Cain: Yes.
Gregory: The reality of the plan is that some people pay more, some people pay less. This is how “The Washington Post” reported it on Friday, we’ll put it up on the screen. Experts see surprise in Cain’s 9-9-9 plan. The 9-9-9 plan that has helped propel businessman Cain to the front of the GOP presidential field would stick many poor and middle-class people with a hefty tax increase while cutting taxes for those at the top, tax analysts say. Robert Williams, a senior fellow at the nonpartisan Tax Policy Center is working on an analysis of Cain’s signature proposal. Williams said it would increase taxes for the poor and middle class, despite Cain’s statements to the contrary. For starters, about 30 million of the poorest households pay neither income taxes nor Social Security or Medicare levees, so for them, he says, doing away with the payroll tax doesn’t save anything and you’re adding both a 9% sales tax and a 9% income tax, so we know they will be worse off. That’s the reality, Mr. Cain. Without making a judgment about it, why do you think that’s an acceptable reality for the overall goal of reform?
Cain: First, they’re missing one very critical point about sales tax. it wasn’t even mentioned in that analysis that you read. On the price of goods there are invisible taxes that are built into everything we buy. We’ll simply — those invisible taxes are going to go away, and we’re replacing them with a 9% visible tax. For example, take a loaf of bread. The farmer pays taxes on his profits. The company that makes the flour, the baker, the delivery man. By the time that loaf of bread gets to the grocery store, there are a series of invisible taxes, which are also called embedded taxes. So in reality, those taxes go away, and so the price of goods don’t go up.
Gregory: You’re saying they actually go down?
Cain: Yes, they actually go down.
Gregory: Based on what?
Cain: Based upon competition. Competition drives prices down. For example, suppose one bread maker says I’m going to charge $2.20 for a loaf of bread, and the other one says he’s going to charge $2.40 for a loaf of bread. Well, guess which one is going to win out based on the quality of being the same?
Gregory: My question had to do, however, with the reality of this plan. The wealthiest Americans would pay less, the poorest Americans and middle-class would pay more. You don’t dispute that?
Cain: I do dispute that. You and others are making assumptions about what wealthy Americans would do with their money, and you’re making assumptions about what the middle-class and the poor. You can’t predict the behavior. If wealthy Americans–
Gregory: This isn’t about behavior, Mr. Cain, this is about whether you pay — if you don’t pay taxes now, and you now have income tax a sales tax, you pay more in taxes.
Cain: More people will pay less in taxes. More people will pay less in taxes.
Gregory: Mr. Cain, we talked to independent analysts ourselves.
Gregory: We’re not just reading newspaper clips here.
Cain: I understand.
Gregory: They tell us they’ve looked at this based on what’s available and it’s incontrovertible. There are people who will pay more.
Cain: That’s right. Some people will pay more, but most people will pay less is my argument.
Gregory: Who will pay more?
Cain: Who will pay more? The people who spend more money on new goods, the sales tax only applies to people who buy new goods. Not used goods. That’s a big difference that doesn’t come out.
Gregory: For those 30 million Americans who don’t pay income tax, including 16 million elderly Americans, you concede they would, in fact, pay more.
Cain: Not the elderly. That’s two different groups. Let’s talk about the elderly. You don’t pay taxes on your Social Security income. It replaces the capital gains tax. Many of the elderly make money off of their investments, they won’t pay that. Tax on dividends and tax on income generated from investments, you only pay once. So in that sense, it helps the elderly.
If you listened closely, you could almost hear the air leaking out of the Herman Cain bubble while he answered.
Cain is not being honest about the impact his plan would have on the poor and elderly. Most of the Americans who don’t pay taxes are the elderly and the disabled. Those people would be hard hit under Cain’s plan, which would place a 9% on every new good purchased. Food and medicine would be considered new goods, and would be subjected to the 9%.
The 9-9-9 plan would also get rid of valuable tax credits that help the middle class, and would subject students and young people to higher rate of taxation on almost everything they buy. Notice that Cain’s examples of those who benefit included corporations, almost all of American farming is now corporate agribusiness, and people who have substantial investment income. The truth about Cain’s scheme is that behind its catchy name is more Republican wealth redistribution for the richest Americans.
Cain doesn’t need the third nine on the title of his plan. His plan should be called the 99% plan, because he is going to raise taxes on the ninety nine percent in order to lower taxes even more for the one percent.
His plan would raise taxes on the unemployed, the young, the old, the middle class, and the poor. The only people who benefit from a flat tax are the wealthy. The 9-9-9 plan is a regressive tax that would take the GOP of concentrating wealth at the top to a new level.
When Cain admitted that some people will pay more he was speaking a bit of truth, but the fact is that a lot of people who can least afford it will pay more, so that the wealthy can pay less.
Let’s call Herman Cain’s plan what it really is, a tax hike on the 99%.