Not that this is any surprise. Usually when flat tax proposals are put out there, this is the common thread. The rich get a massive tax break and the middle class get the shaft.
The old system would be replaced by the nines:
- A flat 9 percent income tax for everyone – no more, no less
- A 9 percent tax on corporations
- A 9 percent national sales tax [...]
If you have a family of four with an income of just under $50,000, they could end up paying more under the Cain plan. Currently, they are taxed around $3,850 in income tax. Under Cain’s plan, they would be taxed at 9 percent or pay $4,500.
That’s $650 more.
Although the family would save almost $4,000 in Social Security taxes, it would have to give up the child tax credit worth the same amount. Furthermore, it would pay an additional national sales tax of 9 percent on everything purchased, including groceries and clothes, which totals about $2,000.
That means under the Cain plan that family could end up paying $2,725 more.
So that family would have a 5.5% tax rate hike. And the folks at the top? Their taxes would be cut in half. And what about those at the bottom, roughly 18% of the population, who don’t pay income taxes because they make so little that they can’t afford to? They’re getting an 18% tax hike? Seriously?
And, by the way, how does Cain fund Social Security or Medicare if those rates are cut? The answer…he doesn’t. They’re defunded. So the middle class and the poor will be paying even more to maintain their current lifestyle.
Long story short, this plan is a joke. Or based on fantasy. Either way, it’s a no go.
This entry was posted on Thursday, October 13th, 2011 and is filed under Money, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.