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


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.

THANK YOU.

We recently wrapped up the crowdfunding campaign for our ambitious Mother Jones Corruption Project, and it was a smashing success. About 10,364 readers pitched in with donations averaging $45, and together they contributed about $467,374 toward our $500,000 goal.

That's amazing. We still have donations from letters we sent in the mail coming back to us, so we're on pace to hit—if not exceed—that goal. Thank you so much. We'll keep you posted here as the project ramps up, and you can join the hundreds of readers who have alerted us to corruption to dig into.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

Share your feedback: We’re planning to launch a new version of the comments section. Help us test it.