(10-13-2011 10:59 AM)Rebel Wrote:  

(10-13-2011 10:53 AM)Bearcat_Bounce Wrote:  Cain has no chance btw.

Says who, you? I say he does. I guess that tells you one thing, opinions are like a**holes.

Says America. If you can say Paul (or any other candidate) can't win than I can say it about a guy who blatantly lied during a debate.

(10-14-2011 11:36 AM)Bearcat_Bounce Wrote:  

(10-13-2011 10:59 AM)Rebel Wrote:  

(10-13-2011 10:53 AM)Bearcat_Bounce Wrote:  Cain has no chance btw.

Says who, you? I say he does. I guess that tells you one thing, opinions are like a**holes.

Says America. If you can say Paul (or any other candidate) can't win than I can say it about a guy who blatantly lied during a debate.

Thats funny! Its not us who says Paul can't win. Its the Polls. He's polling lower because he CRAZY! Finalists will be Cain, Romney and Newt.

(10-12-2011 01:16 PM)Redwingtom Wrote:  

(10-12-2011 12:47 PM)Rebel Wrote:  https://www.hermancain.com/999plan
The 9-9-9 plan is a transition to the Fair Tax.

Where are the specifics of how much money this will bring into the treasury compared to our current receipts?

OK, let's run the numbers. They're easy to find, and the math's not hard.

9-9-9 replaces the individual and corporate income taxes, social security taxes, and the estate tax. Let's look at 2005, because of quirks in some tax laws ofter that. Per the historical tables in the 2012 budget request prepared by Obama's OMB, receipts for 2005 were $927 billion from individual income taxes, $278 billion for corporate taxes, $794 billion for social security, and $27 billion for estate and gift taxes, total $2.026 trillion.

For the same year, per the IRS, individual AGI was $7.422 trillion, less $166 billion in dividends and $20 billion in partnership/S Corp income (taxed elsewhere under 9-9-9) for a net of $7.236 trillion. Business income was $3.346 trillion. GDP was $12.398 trillion, and the studies that I've seen have indicated a consumption tax base would range from 80-85% of GDP, so let's say $10 trillion. That makes a total 9-9-9 tax base of $20.582 trillion, and 9% of that is $1.852 trillion.

That's an apparent shortfall of $174 billion, except that we have run these calculations with income defined under current tax law, including loopholes variously estimated as having a tax effect approximating $1 trillion, and those loopholes are to be eliminated under 9-9-9. You wouldn't pick up the full $1 trillion in tax effect, because the additional income would be subjected to lower marginal rates. Assume half the loopholes are outright credits (no impact on this analysis) and half are from deductions defining taxable income. So you have $500 billion in additional tax at existing rates, say 30% on average, or approximately $1.7 trillion in additional taxable income. At 9% that gives another $150 billion in revenues, essentially closing the gap. $24 billion is about as close as you can get to revenue neutral in this kind of analysis.

My 15-15-15 approach works similarly but at a higher rate because I want to incorporate the Boortz-Linder prefund at 30% and I also want to narrow the budget deficit. So I take the $22.3 trillion tax base ($20.582 trillion plus $1.7 trillion) times 15% to give me $3.345 trillion in revenues. The Boortz-Linder prefund costs about $700 billion, so I'm at $2.6 trillion net, a $600 billion increase over the current system. I also want to do French health care which costs $900 billion. The combination of the prefund and French health care means that nobody, not a single person, is more than a minimum wage job away from being above the poverty line. That's about as good a welfare safety net as we want or need, comparable to Europe and way better than what we have now. I fund that by ending Medicaid (now redundant) to save $350 billion, offsetting $150 billion of Medicare cost (the first $3,000 for each of 50 million seniors), and getting $300 billion of the rest from cuts in "means tested" social welfare programs that would become redundant because the prefund essentially disqualifies everyone. That leaves $100 billion to come from the $600 billion increase in tax revenues, with the remaining $500 billion to go to deficit reduction.

Now I have to chop $500 billion off the spending side to balance the budget. I get $100 billion by bringing the troops home from Germany and Japan, and converting the majority of those slots to reserve billets (save 80% of personnel costs associated). Cato, Rand Paul, Tom Coburn, and CBO have all identified cost savings well in excess of the remaining $400 billion. Pick and choose the best from their offerings. It would not surprise me to find that we can get rid of that much just by eliminating unnecessary paper-pushers across the top of all government programs, without sacrificing so much as a dime of effectiveness.

I ran this before with slightly different numbers for a different base year, but it pretty much always falls in this range. There are a lot more sophisticated analytical techniques to try to nail down the numbers more precisely, but this approach is close enough--and good enough--for a discussion board or a political campaign. The one thing that those more sophisticated analyses typically show is that this sort of tax structure will generate something on the order of a 1-2% uptick in economic growth, and that solves a LOT of problems--and solves them pretty quickly.

Owl, I'm hearing that Cain's plan basically allows zero deductions to corporations. The only ones I have heard are for equipment purchases of only American made goods...of which Cain can't even answer how it handles purchases of equipment that is made up of products made from parts from many countries, like computers and vehicles.

Bottom line, if Cain's plan gets rid of all the deductions for things like payroll, I can easily see many corporations paying more in taxes under a 9% plan than under the current 35% rate which has all those deductions and credits.

And does Cain's plan even allow any credits?

(10-17-2011 01:36 PM)Redwingtom Wrote:  Owl, I'm hearing that Cain's plan basically allows zero deductions to corporations. The only ones I have heard are for equipment purchases of only American made goods...of which Cain can't even answer how it handles purchases of equipment that is made up of products made from parts from many countries, like computers and vehicles.
Bottom line, if Cain's plan gets rid of all the deductions for things like payroll, I can easily see many corporations paying more in taxes under a 9% plan than under the current 35% rate which has all those deductions and credits.
And does Cain's plan even allow any credits?

The company tax is a tax on net income, so the legitimate expenses can be deducted. What is out is all the special-interest deductions for things that really don't have any bearing on GAAP net income. I can't really quantify the impact, but with all the talk about a trillion dollars of corporate benefits, I'm guessing under 9-9-9 that would produce at least the $175 billion in additional revenues needed to make it revenue neutral. I've used a best guess in making my calculations above.