Anyone watching the debates?

[mrstickball]

Kasz216 said:

mrstickball said:

Actually, the more and more I read it, its pretty freakin' amazing. Its not perfect, but its vastly better than what we have now. Flat tax, sales tax, and business flat tax with very, very few deductions. It gets rid of multiple taxes in the process such as capital gains, death tax, FICA, and other payroll taxes.

Why 9-9-9 though?  It doesn't really make any sense other then the fact that it sounds better then another split.

The current Effective US corporate Tax rate is 27.7%

Versus a europeon average of 22.6% and a world wide average of 19.5%

http://www.scribd.com/doc/52966788/Effective-Tax-Rate-Study

Even trying to lure companies to relocate here due to tax rate, something like 16% should be more then satisfactory.   Heck even 20 would well put us on more then even ground with other countries.   9% just seems pointlessly low.

As it is, the current 27.7% brings in about 12% of our revenue, and 9-9-9 is supposed to bring in the same amount of money. 

Meaning the coproate tax would only bring in ~4% under the new plan.

 

Now a 9% Income tax.... that's inline with what the effective tax rate for a person in the lowest quintile was in the 80's and early 90's.  Interesting actually, if you look at the effective tax rates now vs 1992, every group has seen MASSIVE tax cuts EXCEPT the highest quintile, though anyway...

The average effective Income tax in 2006 was 14.4%

http://www.cbo.gov/publications/collections/tax/2009/effective_rates.pdf

Now Income tax makes up about 45% or our revenue.  Meaning it's now 28%.

So when it comes to revenue we're counting on Sales tax to bring in 68% of the federal budget.

Seems like way too much to me and that it would lead the government to focus even harder on stimulating consumption.

One big note on the corporate tax rate is how it is taxed currently vs. the way it would be under 9-9-9.

Right now, corporations deduct labor costs from their prevailing rates. Under Herman's plan, that is removed. Since labor costs are about 50% of most businesses, the actual drop in effective tax rates is closer to 18% instead of 9%.... Since businesses were already getting deductions.

The way 9/9/9 has been calculated generally has stated that the sales tax and flat tax would bring in about $900 billion each, with the corporate tax bringing in about $150 billion... Equating to total revenues of $2 trillion USD. That is generally similar to what we bring in now in regards to income, FICA and corporate taxes. Of course, the beauty is that there are very few deductions - only charities and being in poverty allow any exemptions.