Herman Cain’s 9-9-9 Plan Raises Taxes on the Poor

GOP Presidential candidate Herman Cain.<a href="http://www.flickr.com/photos/gageskidmore/6183942539/sizes/l/in/photostream/">Gage Skidmore</a>/Flickr

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If you watched Tuesday evenings’ GOP presidential debate, you heard a lot about Herman Cain’s 9-9-9 plan. For the unfamiliar, it’s pretty straightforward: 9 percent corporate tax, 9 percent sales tax, and 9 percent income tax. Win-win-win! Or maybe not. Cain was asked at the debate to explain away the charge that his 9-9-9 plan would effectively raise taxes on low-income workers. (Among other things, Cain’s plan would implement a sales tax on groceries, which only two states currently do.)

Cain rejected the notion, but the facts are pretty clearly not on his side. Don’t take it from me, though. None other than Bruce Bartlett, a former economic adviser to Ronald Reagan and George H.W. Bush, says so. Here’s how he explained it at the New York Times‘ “Economix” blog earlier this week:

It’s important to understand that the 9 percent rates on personal and business income would apply to very different tax bases than now exist. For individuals, the tax would apply to gross income less only the deduction for charitable contributions. No mention is made of a personal exemption.

This means that the 47 percent of tax filers who now pay no federal income taxes will pay 9 percent on their total income. And elimination of the payroll tax won’t even help half of them because the earned income tax credit, which Mr. Cain would abolish, offsets both their income tax liability and their payroll tax payment as well.

Additionally, everyone would now pay a 9 percent sales tax on all purchases. No mention is made of any exemptions from this tax, so we may assume that it will apply to food, medical care, rent, home and auto purchases and a wide variety of other expenditures now exempt from state sales taxes. This would increase their cost of living by 9 percent while, at the same time, the poor would pay income taxes.

Bartlett, no lefty, calls Cain’s plan a “distributional monstrosity.” The Center for American Progress, meanwhile, found that the lowest quintile of earners would pay nine times more under the 9-9-9 plan—18 percent of their total income, versus 2 percent today.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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