“When you take the 999 plan and turn it upside down (666); the devil’s in the details.”—Michele Bachmann.
Here’s Bachmann’s brilliant quip in it entirety, excerpted from “The Hanover Economic Debate.” [YouTube of the beautiful Minnesota Congresswoman follows.]
BACHMANN: “I would have to say that the 999 plan isn’t a jobs plan, it is a tax plan. And I would say that from my experience being in Congress, but also as a federal tax lawyer, when you — the last thing you would do is give Congress another pipeline of a revenue stream. And this gives Congress a pipeline in a sales tax. A sales tax can also lead to value-added tax. The United States Congress put into place the Spanish-American War tax in 1888. We only partially repealed that in 2006. So once you get a new revenue stream, you are never going to get rid of it.
And one thing I would say is, when you take the 999 plan and you turn it upside down, I think the devil is in the details.”
UPDATE I (Oct. 15): Peter Schiff says 999 offers a substantial reduction in the corporate rate of income tax which is a positive thing (naturally). Schiff also credits Cain with intending to move toward the abolition of tax on income and toward replacing the income tax with some tariff-like national sales tax. So far so good, says Schiff. However, corporations will have to pay a 9 percent tax on profits as well as on their payroll. 999 is a hidden payroll tax. That’s a new thing. And it’s bad, says Schiff.
UPDATE II (Oct. 16): More about the 9-9-9 plan from Bruce Bartlett (whom I once praised for aiming a shot across the bows of Bush’s bastardized “conservatism” before it was allowable).
No mention is made on the site of a tax cut for those now in the 10 percent, 15 percent or 25 percent brackets. This means that the only people who would get a tax rate cut are those now in the 28 percent, 33 percent or 35 percent brackets. According to the Joint Committee on Taxation, only 4 percent of taxpayers pay any taxes at those rates.
As for corporations, Mr. Cain’s proposal is primarily going to benefit those with revenues of more than $1 million a year, because they account for 98.7 percent of all receipts by C corporations. (A C corporation is a legal entity separate and distinct from its owners that is taxed as a corporation; its shareholders pay taxes individually on their gains.) Those companies with receipts over $50 million account for 88.8 percent of total receipts.
Other business entities — sole proprietorships, S corporations (which have between 1 and 100 shareholders and pass through net income or losses to shareholders) and partnerships — would not benefit because they are not taxed on the corporate schedule. But they represent 92 percent of all businesses.
Second, Mr. Cain would eliminate all taxes on profits earned by multinational corporations outside the United States. It’s hard to know the impact of this provision, but according to Martin Sullivan, an economist with Tax Analysts, the 50 largest corporations in the United States generated half of their profits in other countries.
Read the rest of Bartlett’s substantive analysis of 999.