Cain's 9-9-9 Plan: 84 Percent Would Pay More
Jeanne Sahadi of CNN Money reports that under Herman Cain's 9-9-9 tax reform plan, 84 percent of U.S. households would pay more than they do under current tax policies, according to a report released Tuesday by a nonpartisan research group. The impact would be felt most heavily by the lowest-income groups.
Those are some of the estimates from the Tax Policy Center's analysis of Cain's proposal, which has helped make him a leading contender for the Republican 2012 presidential nomination. While some key questions about the 9-9-9 plan remain unanswered, the Tax Policy Center's analysis is one of the first to take a comprehensive look at its potential impact.
Cain's 9-9-9 plan would replace much of the current tax code with a flat-rate system: a 9 percent individual income tax, a 9 percent corporate income tax and a 9 percent national sales tax. Estate and gift taxes would be eliminated, as would the payroll tax and most tax credits, deductions and exemptions. Capital gains would be tax-free, while dividends would be deductible to businesses paying them out but taxable at 9 percent for investors who receive them.
According to the Tax Policy Center, households with incomes below $30,000 would have, on average, between 16 and 20 percent less in after-tax income than they do today.
By contrast, households making more than $200,000 would see their after-tax income grow by between 5 and 22 percent on average.
The Cain plan doesn't exempt very low incomes from taxation. And while it would eliminate the payroll tax, which is the heaviest tax for low-income families, that tax relief would be offset for many by the elimination of the earned income tax credit and other tax breaks they qualify for now.
The majority of the highest-income households would get a tax cut. For instance, 95 percent of those with more than $1 million in income would receive an average tax cut of $487,300.
When Cain first announced his plan, there was speculation that the plan would help the wealthy and hurt the poor. Now there is proof from a comprehensive analysis by a nonpartisan group. Can you imagine families earning less than $30,000 per year, taking home 16 to 20 percent less than what they take home now?
Cain and other Republicans want to turn the growing chasm between the "haves" and "have-nots" into a gulf. What's up with the wealthy's need to make poor people even poorer? Being less wealthy is a lot different than being more poor. Cain's 9-9-9 tax plan will result in 0-0-0 for the poor and middle class.
Read more at CNN Money.
In other news: VIDEO: Firefighter Catches 6-Year-Old From Burning Building.
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