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Herman Cain’s 9-9-9 Plan in Simple Terms

With all the hype about Herman Cain’s 9-9-9 plan, I figured I’d post this simple explanation of his plan.  It comes from his website…

Explaining the “9-9-9 Plan”

The Essentials

9% Business Flat Tax

  • Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports.
  • Empowerment Zones will offer deductions for the payroll of those employed in the zone

9% Individual Flat Tax.

  • Gross income less charitable deductions.
  • Empowerment Zones will offer additional deductions for those living and/or working in the zone.

9% National Sales Tax.

Unlike a state sales tax, which is an add-on tax that increases the price of goods and services, this is a replacement tax. It replaces taxes that are already embedded in selling prices. By replacing higher marginal rates in the production process with lower marginal rates, marginal production costs actually decline, which will lead to prices being the same or lower, not higher.

Economic Impact

According to former Reagan Treasury official Gary Robbins, of Fiscal Associates, the “9-9-9 Plan” will expand GDP by $2 trillion, create 6 million new jobs, increase business investment by one third, and increase wages by 10%.

Key Points of the “9-9-9 Plan”

  • Removes all payroll taxes and unites all tax payers
  • Provides the least incentive to evade taxes and the fewest opportunities to do so
  • Lifts a $430 billion dead-weight burden on the economy due to compliance, enforcement, collection, etc…
  • Is fair, simple, efficient, neutral, and transparent
  • Ends nearly all deductions and special interest favors
  • Features zero tax on capital gains and repatriated profits
  • Exports leave our shores without the Business Tax or the Sales Tax embedded in their cost, making them world class competitive. Imports are subject to the same taxation as domestically produced goods, leveling the playing field.
  • Lowest marginal rates on production
  • Kills the Death Tax
  • Allows immediate expensing of business investments
  • Eliminates double taxation of dividends
  • Increases capital formation which aids capital availability for small businesses
  • Increased capital per worker drives productivity and wage growth
  • Features a platform to launch properly structured Empowerment Zones to renew our inner cities
  • The pro-growth, pro-job, pro-export economic policies of the “9-9-9 PLAN” equals a strong dollar policy

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