Herman Cain's 9-9-9 Plan

There has been a lot of talk since Herman Cain laid out his new plan for the United States tax system. He calls it his 9-9-9 plan. This plan would wipe out the 80,000 plus pages of the current tax law and replace it with a much simpler and lighter text. His plan is three fold, a 9% income flat tax, a 9% business flat tax and a 9% national sales tax. It has been said that his plan will raise taxes on many American families. Considering the fact that nearly 47% of possible tax payers in this country do not pay taxes at all I am not surprised that this is a possibility.

The flat income tax includes the option of charitable deductions and 'empowerment zones' which are areas of this country where lower income families live and/or work that can receive further deductions. The business tax is based on gross income with deductions on capital investments, purchases from other American based businesses and their net exports. This tax also includes 'empowerment zones' similar to the income tax. Finally the national sales tax is not an add-on tax but a replacement tax. It is based on the idea that because business taxes are considerably less due to one single tax, the price of production will be less which in turn will make the price of the product less. As an end result, Herman Cain plans to do away with the income tax and business tax altogether, plus repeal the 16th amendment. All that will be left is a national sales tax. I have never really been a fan of the 'fair tax', but after reading his proposal it makes sense.

This plan has its merits and possible flaws. The main flaw would be that the national sales tax could be raised again and again by an irresponsible congress. The 'empowerment zones' in the income tax and business tax could be enlarged to include those individuals or companies that do not need any assistance to pay taxes. Members of congress can also use this to reward their contributors. Also, this new income tax will require everyone to pay taxes and as I have stated above, 47% of Americans do not pay taxes at this time. However, this is where the 'empowerment zones' come into effect.

Mr. Cain's plan is bold. I believe that it is a win-win for the American people. This plan will create millions of jobs because businesses have more money. Spending will also increase because the price of products will be less. And in the end you will be able to control your tax burden each year by what you decide to purchase when all we have is a national sales tax left.