Put simply, my issue with Cains 9-9-9 plan and Perrys flat tax is that they would have a devastating impact on the economy, and heres why. Because the entire lower 50% of earners make only 12.7% of the income in America, their budgets are constrained, meaning that there are goods and services they would buy, but dont because they simply dont have the money. As a result any reduction in the income of the lower 50% of earners will result in an immediate point by point reduction in consumer spending. Because consumer spending is 70% of economic activity directly and indirectly impacts all other economic activity, reductions in the income of these earners result in a net loss of economic activity. The upper 50% of earners make 87.3% of the overall income with the top 5% making fully 35% of the income. This means that the budgets of the upper 50% of earners, and the top 5% in particular are bloated, meaning they buy all the goods and services they are going to buy regardless of increases or decreases in their income of less than 90% of their total earnings. The excess of earnings in these categories go into the earners stock portfolios where it artificially inflates the value of the stocks they invest in. Increases in stock prices not related to actual increases in profits from economic activity are whats known as stock bubbles, which have a destabilizing effect on the economy. In short, increasing earnings by decreasing the tax rates of the upper 50% of earners by a few points will not have an impact on consumer spending, but will destabilize the economy by creating more and larger stock bubbles. Whereas the opposite is also true, increasing taxes on the upper 50% of earners will have a stabilizing effect on the economy by reducing the size of stock bubbles and increasing economic activity through increased government spending. However the opposite is also true with regards to the lower 50% of earners, reducing their income hurts the economy by reducing consumer spending and enlarging already existing stock bubbles on Wall Street through the decrease in economic activity. Likewise, increasing their earnings will cause an immediate increase in consumer spending resulting in increased economic activity. This will result in a stabilizing effect on the economy by creating real, sustainable economic growth that will shrink stock bubbles without reducing stock prices by providing real, sustainable increases in corporate profits. Perry and Cain talk about how fair their plans are, and their right, when we all live together in an economically devastated third world country it will be survival of the fittest, and what could be more fair than that?