Herman Cain’s flat 9 percent tax rate may sound initially attractive, but appearances are deceptively misleading. The removal of deductions is enough to push the income tax burden of the majority of tax payers to a rate that is higher than at present, especially for families with children. Only the wealthy would benefit, so in this respect Cain is showing his Republican colors.
Worst than increases in income tax, the 9 percent sales tax would be 9 percent only in the few states that at present have no sales tax. But take California, for example. Under Cain’s scheme, sales tax would end up being around 17 percent, once you add on state and local taxes. No only would this be a burden for consumers, but it would discourage sales and ultimately stifle the economy.
Are we back in the Wild West? The 9-9-9 tax proposal is little more than snake oil hawked by a shyster.