Everyone’s gearing up for Election 2012 and recently, there has been a lot of talk and debate about Herman Cain’s 9-9-9 plan. In today’s show, we evaluate Cain’s plan and tell you what we like about it, what hesitations we have, and share some numbers we ran to test it.
What we like:
- It’s seductively easy. Featuring a 9% business flat tax, 9% individual flat tax, and a 9% national sales tax, Cain’s plan is one that anyone can understand. Our current tax system has gotten so incredibly complex, that a plan this simple plan is definitely appealing.
- It eliminates a lot of the current loopholes and the special interest side of things that so many of us are concerned about in our current system.
- It’s outside the box. It’s interesting to see someone propose something so bold and radical. 9-9-9 essentially wipes away our current system and starts over.
What gives us pause:
- Adding new tax (sales tax) while keeping existing tax (income tax).
- It’s hard to trust the government. 9-9-9 might be good for the current time, but what stops them from changing it to 27-27-27 later?
- How does this affect independent contractors? There are many companies who do not hire actual employees, but primarily use independent contractors for their work. How will this be treated?
- How would retirement savings be affected? There are probably many Americans nearing retirement who are living off of savings, which have already been taxed, and would now face a new consumption tax.
To be clear, we are not endorsing Mr. Cain as the next President of the United States. We simply want to educate our listeners on some of the economic aspects surrounding the current debates.