Here’s the video:
The video is full of unsubstantiated claims, many of which are easily debunked by anyone with a high school education. It offers very specific numbers, for example, $2 trillion added to GDP and create 6 million jobs. It says that investments would increase by a third and wages would go up 10% (how would people invest 33% more when their wages only increase by 10%?). It also alleges that federal income would increase by 15% (not sure how that would happen if people are paying less in taxes).
One of the most misleading parts of the video is when it uses an example of a loaf of bread. According to the video, the bread is taxed multiple times as it goes from wheat grower to the baker to the distributer to the store, etc. This is true. It’s not clear how his 9-9-9 plan would be any different. Unless the grower/baker/distributer/retailer are all one company, each company will be paying 9% on any profit generated from that bread. Under the current plan, each company would be able to deduct expenses used in generating that loaf of bread. Under Cain’s plan, they wouldn’t be able to deduct expenses. Tax deductions incentivize business owners to reinvest in their business by hiring and by spending money, thereby adding to the economy. Without deductions, that incentive disappears.
Even in the movie, Cain says that the current added tax could be 30-40% for that loaf of bread. Under his plan, it would be 36%, with no opportunity for deductions, despite the claim that it would only be 9%. Then, of course, consumers would need to pay an additional 9% sales tax on the loaf of bread, on top of any existing sales taxes. That loaf of 9-9-9 bread is starting to get really expensive. Actually, maybe not, because supply and demand have a much bigger impact on pricing than tax rate.
The video also makes the long-debunked assertion that it would force the sale of American made products, which is unconstitutional, but why let that pesky piece of paper get in the way? Current manufacturing is very complicated. Most American companies do their manufacturing outside the US. Is Cain saying that American companies would not be able to sell their goods? What about foreign companies, like Toyota, who manufacture in the US? What about items that have some foreign components in an American made product? We do need to encourage American manufacturing, but a simple 9-9-9 plan won’t do it.
It makes mention of the payroll tax without actually telling Americans what the payroll tax is. It is for Social Security and Medicare. It says that the payroll tax is 15%, but it neglects to mention that only half that comes out of workers pockets, and only up to the first $106,000 in income. People who make $1 million a year barely pay any payroll tax. The only way Cain could eliminate the payroll tax would be to eliminate Social Security and Medicare.
The video admits that corporations will pay less under Cain’s plan. It makes the dubious argument that they will pass the savings on to the consumer. Unfortunately, recent history has proven otherwise.
In a segment called, “What about the poor?” they contradict their own claims of simplicity and transparency by saying that there will be across the board exemptions for the poor.
Apparently, the genre is ‘mystery.’