I started writing about this in another thread, but I got bogged down debating Perry’s flat tax ( http://www.usmessageboard.com/polit...ry-s-flat-tax-will-devastate-the-economy.html ) , so I thought I would give Cain’s disastrous debacle of a tax plan its own thread. The first obvious problem with Cain’s plan is it’s really just a flat tax in disguise, but his plan combines it with a 9% national sales tax which, all together will spell a triple whammy to consumer sales. First it takes money out of the pockets of the middle class to put it into the pockets of the upper class, the problem with that is the upper class has all kinds of extra money sitting around anyway, they buy all the consumer goods they want or need, and won’t buy any more as a result of a change in income of a few percentage points, so their consumer spending is essentially peaked. The middle class on the other hand have budgets that are constrained, so they will increase or reduce their consumer spending on nearly a point by point basis with changes in their income. As a result retailers can expect a loss to their bottom line of around 7% to 8% as a result of changes to the income tax code. Worse than the flat tax is Cain’s proposed 9% increase to sales tax, because the middle class’s budgets are constrained, that will mean a further 9% reduction in consumer sales. So the result of these two changes in tax code will be a loss in consumer sales of around 15%. That means that every retailer in America can expect to take a hit of around 15% to 16% on their bottom line, when that happens the market will convulse and retailers will start laying off, that’s the third whammy and it’s difficult to say how large the impact on consumer spending from that will be but I consider 5% an extremely conservative estimate. So here’s how it will go down if this plan is implemented. First the sales tax will take 9% from consumer spending, then over the following year as changes in the income tax code impact spending habits, sales will slowly drop another 7% to 8%, during this time and over the course of the following year after that the market will shed jobs resulting in a slow loss of at least another 5%. That’s every retailer in America taking a loss of a bare minimum of 20% or one fifth over the course of two years, and that doesn’t include ancillary losses due to job loss in other impacted industries. Shhhh, no-body tell Wall Mart that Cain plans to screw them.