Does Herman Cain's "9-9-9" plan add up?
WASHINGTON - Herman Cain, former CEO of Godfather's Pizza, touts his own business experience in his quest for the Republican nomination. His calls his fix for the economy his "9-9-9" plan.
Cain's 9-9-9 plan: A solution or slogan?
Huntsman: I thought the Cain 9-9-9 plan was "price of pizza"
The plan would replace the entire tax code and all of its loopholes with a 9 percent corporate tax, 9 percent personal income tax and a 9 percent national sales tax. It raises the same amount in revenue, he says but would be simpler and more fair.
"We must grow the economy with a bold solution," Cain said at the Republican debate Tuesday night.
The idea made Cain a target in the debate, with John Huntsman mocking 9-9-9 as a gimmick. "I thought it was the price of a pizza when I first heard about it," Huntsman said.
If enacted however, 9-9-9 would make filing taxes easy. Most families would pay a flat 9 percent income tax with only one deduction--for charitable contributions. There would be no tax on capital gains or dividends - which also leads to a simple conclusion.
"It will raise taxes on the poor," said Roberton Williams, of the non partisan Tax Policy Center. "It will cut taxes on the rich." Williams calls 9-9-9 a double hit on low income Americans. The 30 million households that now pay no federal taxes would start paying 9 percent - plus the 9 percent sales tax on consumer goods including food, medicine and gas. Upper income Americans meanwhile would see their top 35 percent income tax rate slashed to 9 percent.
"They'd see very, very large tax cuts," Williams said.
"Richer people," Andrews asked.
"Richer people would see tax cuts," Williams replied. "They'd pay absolutely less than they're paying right now."
No one knows the impact of a 9 percent national sales tax imposed on an economy that needs consumers to spend more. 9-9-9 may have won Cain attention, now it's bringing him scrutiny.
Cain's 9 percent plan would be a big cut for corporations, too. Once you consider deductions and loopholes-- the average tax paid by American companies is about 26 percent.
