Analysis of Herman Cain's 9-9-9 Plan

[rambone]

I will not defend the prebate. If I were King, there would be no pre-bate. IMO, it's a dumb idea.

Could you say more about the prebate? I don't know much about it.

Why aren't internet sales reported? There is no Federal law enforcing it, that's why.

This is a point that I hadn't considered. Now the Feds are going to start wanting their cut of everything sold on the internet? Can't say that I'm a fan of more Federal control of the internet.

 

[ATOMonkey]

The pre-bate basically offsets the cost of the sales tax on "necessities".

It's pro-rated based on the size of your family and some other factors.

You could do the exact same thing with MUCH less overhead by exempting certain items.

 

[ATOMonkey]

Yet again, the dearth of understanding anything tax related is apparent, income tax does NOT have a single reporter problem. It's a dual reporter system in which the payee and payer both report the transaction (you know, 1099s and W-2s). Still there is an awful lot of evasion, 15-25%, but, in the single reporter FairTax system, the proponents say there will be....NONE. Even though there is great incentive to evade and difficult to detect evasion, so that 23% tax will now have to be a 30% or 35% tax, and, thanks to the prebate, all the individual reporting and auditing will still have to be done. We're getting, possibly, the worst of all worlds, and a pig in a poke.

Except for all of the deductions that one can report on their taxes, that are basically on the honor system.

I'm sure you've been alive long enough to remember all of the people claiming multiple dependants that didn't exist prior to the requirement that all dependants have SSN.

And why did/do people lie on their taxes? The chances of getting caught are ridiculously low, simply due to the large number of people reporting, and the vast array of taxes, rates, deductions, credits, etc that are available to them.

Once again, a Federal Sales tax is neither difficult to evade nor is it difficult to detect, due to simplicity and the relatively low number of retailers compared to the high number of earners.

 

[CarmelHP]

The pre-bate basically offsets the cost of the sales tax on "necessities".

It's pro-rated based on the size of your family and some other factors.

You could do the exact same thing with MUCH less overhead by exempting certain items.

Sounds kind of innocuous when you say it that way, doesn't it? You left out the part about the federal government having to send checks, large checks, to EVERYONE, EVERY MONTH, FOREVER to cover the prebate.

It's a new federal entitlement to make the tax progressive. It's especially ripe for the kind of fraud that accompanies the earned income credit, but this would be like giving a monthly EIC to everybody.

http://www.fairtax.org/images/content/pagebuilder/18607.jpg

 

[ATOMonkey]

Many of the places I eat at still give you the old handwritten bill. Heck some of them don't even take credit/debit cards. I don't go to chains very often. Just local hole in the walls. I rarely use credit/debit cards. Everything is cash and carry. I stopped going to Radio Shack when they insisted I give them my info when paying cash.

I'm sure they keep records of their transactions. Just because you're doing it by hand does not automatically mean you're not in compliance.

Sure you could do that to avoid paying sales tax, but by the same token you could also report zero profits, and avoid any income tax.

Of course to get away with it, you can't leave any paper trail AND your fake accounting needs to be accurate. That means, no banks, lots of cash transactions and cash on hand. Lots of cash deals with suppliers who are also willing to deal under the table.

Who wants to risk losing their business over that?

 

[88GT]

I'm sure they keep records of their transactions. Just because you're doing it by hand does not automatically mean you're not in compliance.

Sure you could do that to avoid paying sales tax, but by the same token you could also report zero profits, and avoid any income tax.

Of course to get away with it, you can't leave any paper trail AND your fake accounting needs to be accurate. That means, no banks, lots of cash transactions and cash on hand. Lots of cash deals with suppliers who are also willing to deal under the table.

Who wants to risk losing their business over that?

Let's not forget that doing business in cash IS a red flag for some these days.

 

[ATOMonkey]

Sounds kind of innocuous when you say it that way, doesn't it? You left out the part about the federal government having to send checks, large checks, to EVERYONE, EVERY MONTH, FOREVER to cover the prebate.

It's a new federal entitlement to make the tax progressive. It's especially ripe for the kind of fraud that accompanies the earned income credit, but this would be like giving a monthly EIC to everybody.

http://www.fairtax.org/images/content/pagebuilder/18607.jpg

Yes, and I think I made my position clear that I am not in favor of the pre-bate.

I like the idea of a single Federal Sales tax that replaces all other taxes. That's where I stand.

 

[CarmelHP]

Yes, and I think I made my position clear that I am not in favor of the pre-bate.

I like the idea of a single Federal Sales tax that replaces all other taxes. That's where I stand.

Who cares where you stand? We were talking about Cain. He's the guy running for President.

 

[ATOMonkey]

And I'm the guy who gets to call my representative and tell him what kind of legislation I'd like to see.

He's president, not dictator.

 

[CarmelHP]

I'm sure they keep records of their transactions. Just because you're doing it by hand does not automatically mean you're not in compliance.

Sure you could do that to avoid paying sales tax, but by the same token you could also report zero profits, and avoid any income tax.

Of course to get away with it, you can't leave any paper trail AND your fake accounting needs to be accurate. That means, no banks, lots of cash transactions and cash on hand. Lots of cash deals with suppliers who are also willing to deal under the table.

Who wants to risk losing their business over that?

Yet, one-eight to one-quarter are doing it to some extant now, when the benefits are much lower. The Joint Commission on Taxation found that evasion increases exponentially when sales tax rates exceed 10%. Why do the FairTax people say none? The effect of evasion will be substantial and you already have an embedded effective tax rate of 30% in the FairTax proposal. Rates of evasion even at the 15% level would mean the tax would go up a lot the first year to cover the shortfall and increases are programmed in. The FairTax is a solution that's easy, simple and wrong.

 

[ATOMonkey]

Did they also study what the evasion rate is when all other rates are zero?

 

[CarmelHP]

And I'm the guy who gets to call my representative and tell him what kind of legislation I'd like to see.

He's president, not dictator.

You may have a lot of influence, but Cain isn't pushing YOUR proposal. You and 100 million other people calling and you're seriously telling me that this won't be loaded down with exemptions, back-doors, and little treats? By your one phone call, you're going to get YOUR way, but everyone else isn't? Oh well, I believe the plan is perfect now.

 

[ATOMonkey]

You may have a lot of influence, but Cain isn't pushing YOUR proposal. You and 100 million other people calling and you're seriously telling me that this won't be loaded down with exemptions, back-doors, and little treats? By your one phone call, you're going to get YOUR way, but everyone else isn't? Oh well, I believe the plan is perfect now.

Your statement cuts both ways. If you can predict that the legislation will be full of corruption, then a prediction that it will be utopian carrys equal weight.

The truth is that it will fall in the middle, of that I have no doubt. There will be exemptions, and rightly so. There will be changes made for compromise.

However, the basic structure of the National Sales Tax is still inherriently more efficient, and will produce greater economic growth, with less room for cronyism, than the current National Income Tax system.

It is an improvement. Of that, there can be no doubt, as the current system sets the bar pretty low.

 

[CarmelHP]

Your statement cuts both ways. If you can predict that the legislation will be full of corruption, then a prediction that it will be utopian carrys equal weight.

What preventative is there, none? So no, it cuts only one way, in favor of history and human nature.

The truth is that it will fall in the middle, of that I have no doubt. There will be exemptions, and rightly so. There will be changes made for compromise.

Well, as long as you have no doubt, that's good as gold.

However, the basic structure of the National Sales Tax is still inherriently more efficient, and will produce greater economic growth, with less room for cronyism, than the current National Income Tax system.

And you know this, how? It's ripe for gross corruption, and will accrue all manner of appendages as it creeps ever upward. You seem to love big government solutions.

It is an improvement. Of that, there can be no doubt, as the current system sets the bar pretty low.

They said the same thing about Prohibition.

 

[ATOMonkey]

What preventative? So, the only variety of people in the world are the corrupt? Your world is a sad place.

Your postulation of corruption being man's nature is valid, but mine being that man compromises is false? Interesting logic...

Yes, one tax at one rate is ripe for corruption. Much more so than a progressively scaled income tax with 1900 pages of deduction, defition, credit, and exemption. Let's not forget all the other taxes aside from the income tax that are heaped upon us.

Perhaps it's you that is the statist.

 

[CarmelHP]

What preventative? So, the only variety of people in the world are the corrupt? Your world is a sad place.

Your postulation of corruption being man's nature is valid, but mine being that man compromises is false? Interesting logic...

What? Have you been drinking? You made my unicorn cry. I deal only in reality, not fantasy.

Yes, one tax at one rate is ripe for corruption. Much more so than a progressively scaled income tax with 1900 pages of deduction, defition, credit, and exemption. Let's not forget all the other taxes aside from the income tax that are heaped upon us.

Attached to a huge entitlement at the CORE of the proposal but you say it will be "compromised" away. Similar entitlements, throughout history, have been hotbeds of fraud. It will take a huge new bureaucracy to administer that one component alone.

Perhaps it's you that is the statist.

Nope, pretty sure it's you. You want big government, big entitlements, big taxes, big Nanny state. We don't need to keep thinking up better ways to feed federal power.

 

[Prometheus]

Your statement cuts both ways. If you can predict that the legislation will be full of corruption, then a prediction that it will be utopian carrys equal weight.

We haven't seen a piece of federal legislation in a century that hasn't been rife with corruption and backroom deals.

Carmel is correct.

Look man, the only to help people and save the economy is not to just put more money back in their pockets, but to not take that money in the first place.

Of the many evils of a federal sales tax on everything, you would have to pay 9% to live. Think about it, you either pay the taxman 9% or YOU DIE. Milk for your kids? Pay the 9% or they die. You want to have a slice of bread for dinner? Sorry buddy, cough up your 9% or you don't get to feed yourself.

You talk in other posts about people dying if social programs are cut, that's just liberal hype and mantra.

People WILL go actually have to go without if there is a national sales tax. It's evil.

 

[Hotdoger]

Link? Or is this just speculation?

Real world experience.

Are you saying you have never seen cheating on sales tax?

 

[Hotdoger]

Why aren't internet sales reported? There is no Federal law enforcing it, that's why. Internet sales made within state are reported and collected. At least they are every time I do it. Now, do they remit to the State? I would think they put themselves at quite a risk if they don't.

If they don't ring it up, I don't pay. Where do you eat and drink where you don't get a bill?

Also, I pay for everything with either my debit or cc. I haven't made a cash transaction in years. I think the majority of the population falls into this category as well.

Amazon won't pay: Connecticut Pushes Amazon to Pay Taxes

 

[Hotdoger]

Link? Or is this just speculation?

Google :

sales tax fraud


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