9 - 9 - 9 for a business owner

alan1

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I was thinking about Mr Cain's 9-9-9 tax plan and had a thought jumped into my head (yeah, me thinking is kinda scary).

Two of the 9's.
9% business tax rate.
9% personal tax rate.

So, lets take a small business owner that pays himself a salary from the company he/she owns.
That business owner will pay the exact same rate of tax regardless of the salary he pays himself. He will pay the 9% as an individual if he draws the profit as a salary or pay the same 9% if he leaves the money as profit for the company and pays himself less in salary.

There is no hiding of money or manipulation of tax code to pay a lesser rate based upon differences between personal or business taxes.
It's brilliant.
 

WatertheTree

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Its really much worse then that. 9-9-9 is a tax plan written by wall street and the federal reserve.

It will shift all corporate taxation to the companies that provide real goods and services while companies that generate huge profits while supplying nothing tangable to the market will pay the least.

And what will change with big business hiding money and beating the system by any means??? Nothing, they will continue to pay very little compared to smaller business without the same resources.
 

Foxfyre

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Profit is profit whether it is based on 'tangibles' or not. The plan is that business will pay 9% of their profit. And because that 9% is lower than or very competitive with overseas markets, it will provide a huge incentive for corporations to bring their operations, and the jobs associated with them, back home. In many cases it would even offset the higher wages that Americans normally earn.
 
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alan1

alan1

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Its really much worse then that. 9-9-9 is a tax plan written by wall street and the federal reserve.

It will shift all corporate taxation to the companies that provide real goods and services while companies that generate huge profits while supplying nothing tangable to the market will pay the least.

And what will change with big business hiding money and beating the system by any means??? Nothing, they will continue to pay very little compared to smaller business without the same resources.
I'm unsure what you mean by "It will shift all corporate taxation....". My understanding is that the 9% business tax rate applies equally to all business's and their profit, incorporated or otherwise.

The part I think is brilliant about Mr Cain's plan is that the 9% tax rate applies to both the business and the business owner, regardless of where that money ends up.
I am very anti-tax, but I am also a realist and understand that some monies need to be paid in order to support the operation of the federal government. 9% income tax seems to be a somewhat reasonable rate for all to pay. The 9% sales tax seems a bit high to me. I currently don't spend 100% of what I earn, but if I did, the combined 9% income tax and 9% sales tax is less than what I currently pay.

Another thing about a federal sales tax (coupled with a reduction in income tax) is that the underground economy will start paying some federal taxes that they currently avoid, because they have no "declared income" or undeclared income. The obvious example is the drug dealer that pays no income tax because his earnings are hidden. Less obvious are people like the guy that mows my yard. I pay him cash, I don't fill out a 1099 form for him and I guarantee you that he doesn't declare that $30 every other week as income on his federal tax return.
 

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Profit is profit whether it is based on 'tangibles' or not. The plan is that business will pay 9% of their profit. And because that 9% is lower than or very competitive with overseas markets, it will provide a huge incentive for corporations to bring their operations, and the jobs associated with them, back home. In many cases it would even offset the higher wages that Americans normally earn.
Actually, you're neglecting something, which is that national sales tax. The concept of a national sales tax is intended to place an increased comparative tax burden on lower and middle class individuals, a comparatively weak tax burden on the wealthy, and especially a negligible tax burden on companies that do not deal in "tangibles."
 

Foxfyre

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Its really much worse then that. 9-9-9 is a tax plan written by wall street and the federal reserve.

It will shift all corporate taxation to the companies that provide real goods and services while companies that generate huge profits while supplying nothing tangable to the market will pay the least.

And what will change with big business hiding money and beating the system by any means??? Nothing, they will continue to pay very little compared to smaller business without the same resources.
I'm unsure what you mean by "It will shift all corporate taxation....". My understanding is that the 9% business tax rate applies equally to all business's and their profit, incorporated or otherwise.

The part I think is brilliant about Mr Cain's plan is that the 9% tax rate applies to both the business and the business owner, regardless of where that money ends up.
I am very anti-tax, but I am also a realist and understand that some monies need to be paid in order to support the operation of the federal government. 9% income tax seems to be a somewhat reasonable rate for all to pay. The 9% sales tax seems a bit high to me. I currently don't spend 100% of what I earn, but if I did, the combined 9% income tax and 9% sales tax is less than what I currently pay.

Another thing about a federal sales tax (coupled with a reduction in income tax) is that the underground economy will start paying some federal taxes that they currently avoid, because they have no "declared income" or undeclared income. The obvious example is the drug dealer that pays no income tax because his earnings are hidden. Less obvious are people like the guy that mows my yard. I pay him cash, I don't fill out a 1099 form for him and I guarantee you that he doesn't declare that $30 every other week as income on his federal tax return.
There have always been two prices with the little guys. The price with tax included if you pay by check or credit card that leaves a paper trail and inspires him to declare the income on his tax return - and -

The price that is less if you pay in cash with no paper trail and that won't make it onto the declared income.

Such practices exist now and will no doubt continue to exist under Cain's plan if it should ever become law.

But no business can afford to hide all its income or else the IRS will declare it a 'hobby' rather than a business and none of the expenses of doing business will be deductible and you won't be able to qualify for a business license, business insurance, bonding, or a loan if you should need one. I believe the current rule is you have to show a profit for three years out of every five. So the barter system will continue but won't be a problem any more than it is now.

What we're shooting for is a tax AND regulatory AND mandate system that allows American businesses to be competitive with everybody else. That gets everybody up and running, provides jobs for anybody who wants one, and the increased business activity plus all those additional tax payers and the reduced strain on social services will net the federal government hundreds of billions if not trillions more than will Obama's solution which is to tax business more and punish the millionaires.
 
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alan1

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Its really much worse then that. 9-9-9 is a tax plan written by wall street and the federal reserve.

It will shift all corporate taxation to the companies that provide real goods and services while companies that generate huge profits while supplying nothing tangable to the market will pay the least.

And what will change with big business hiding money and beating the system by any means??? Nothing, they will continue to pay very little compared to smaller business without the same resources.
I'm unsure what you mean by "It will shift all corporate taxation....". My understanding is that the 9% business tax rate applies equally to all business's and their profit, incorporated or otherwise.

The part I think is brilliant about Mr Cain's plan is that the 9% tax rate applies to both the business and the business owner, regardless of where that money ends up.
I am very anti-tax, but I am also a realist and understand that some monies need to be paid in order to support the operation of the federal government. 9% income tax seems to be a somewhat reasonable rate for all to pay. The 9% sales tax seems a bit high to me. I currently don't spend 100% of what I earn, but if I did, the combined 9% income tax and 9% sales tax is less than what I currently pay.

Another thing about a federal sales tax (coupled with a reduction in income tax) is that the underground economy will start paying some federal taxes that they currently avoid, because they have no "declared income" or undeclared income. The obvious example is the drug dealer that pays no income tax because his earnings are hidden. Less obvious are people like the guy that mows my yard. I pay him cash, I don't fill out a 1099 form for him and I guarantee you that he doesn't declare that $30 every other week as income on his federal tax return.
There have always been two prices with the little guys. The price with tax included if you pay by check or credit card that leaves a paper trail and inspires him to declare the income on his tax return - and -

The price that is less if you pay in cash with no paper trail and that won't make it onto the declared income.

Such practices exist now and will no doubt continue to exist under Cain's plan if it should ever become law.

But no business can afford to hide all its income or else the IRS will declare it a 'hobby' rather than a business and none of the expenses of doing business will be deductible and you won't be able to qualify for a business license, business insurance, bonding, or a loan if you should need one. I believe the current rule is you have to show a profit for three years out of every five. So the barter system will continue but won't be a problem any more than it is now.

What we're shooting for is a tax AND regulatory AND mandate system that allows American businesses to be competitive with everybody else. That gets everybody up and running, provides jobs for anybody who wants one, and the increased business activity plus all those additional tax payers and the reduced strain on social services will net the federal government hundreds of billions if not trillions more than will Obama's solution which is to tax business more and punish the millionaires.
The practice will exist no matter who is president, governor, mayor.
Many states and cities use sales tax as a means to harness the monies from the underground economy. I abhor taxes, but a sales tax does make others help pay for the government they have, even those that have hidden income.

A business will do what is in their best interest (and the best interest of shareholders) to maximize profit. Avoidance of taxes is one of those things. A lower corporate tax rate will keep business's in the US instead of outsourcing. American workers in America pay US taxes, foreign workers in a foreign country don't pay US taxes. Americans spend money in America (thus stimulating the American economy), foreigners spend money in their own country (thus stimulating their country's economy).
It really is that simple.
I fail to understand why some think that punishing others with exorbitant tax rates is the answer. People avoid pain and expense whenever they can. Making it painful or expensive to do business in America is not the solution to growing the economy.
 

WatertheTree

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Profit is profit whether it is based on 'tangibles' or not. The plan is that business will pay 9% of their profit. And because that 9% is lower than or very competitive with overseas markets, it will provide a huge incentive for corporations to bring their operations, and the jobs associated with them, back home. In many cases it would even offset the higher wages that Americans normally earn.
Actually, you're neglecting something, which is that national sales tax. The concept of a national sales tax is intended to place an increased comparative tax burden on lower and middle class individuals, a comparatively weak tax burden on the wealthy, and especially a negligible tax burden on companies that do not deal in "tangibles."
That was my point exactly. A business that pours money into the economy so it can make a profit will be hit harder by this then say jp morgan who essentially does nothing tangible but is one of the most profitable.

Clearly written by wall street and endorsed by the federal reserve. And dumb-dumb republicans are bying into because 'its gonna make the poor people pay taxes to'.

Were the country not permiated with the stupid the neocon movement would never have started.
 

Foxfyre

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I know of no state or municipality that assesses tax to any bonafide business on any item that will be resold. That means that all inputs, raw materials, or outsourced activities that result in a product or service that will be resold to others should be exempt from sales tax and business tax. Coffee for the coffee pot, toilet paper, cleaning supplies, printer ink etc. to be consumed and not resold would not be exempt from sales tax but would continue to be exempt from the business tax.

But the 9% sales tax on some items would still be so much less than one of the world's highest corporate taxes on profits that we currently have that it would still be a positive and not negative impact on the economy.
 

LoneLaugher

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Why would a corporation be expected to pay a higher tax on profits in this country than other places? Any thoughts?
 

WatertheTree

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I know of no state or municipality that assesses tax to any bonafide business on any item that will be resold. That means that all inputs, raw materials, or outsourced activities that result in a product or service that will be resold to others should be exempt from sales tax and business tax. Coffee for the coffee pot, toilet paper, cleaning supplies, printer ink etc. to be consumed and not resold would not be exempt from sales tax but would continue to be exempt from the business tax.

But the 9% sales tax on some items would still be so much less than one of the world's highest corporate taxes on profits that we currently have that it would still be a positive and not negative impact on the economy.
So now were talking about exceptions, were talking regulating every business. Were creating a huge loophole for everyone to walk through.

That doesnt really help the case.
 

WatertheTree

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Why would a corporation be expected to pay a higher tax on profits in this country than other places? Any thoughts?
Well we could get by with a higher tax if we had more to offer then the competition. For example, if we had a better educated workforce. Better cleaner cities etc.

But we have nothing because we would rather go to war. So we must race to the bottom on taxing to keep all business here.
 

Foxfyre

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I know of no state or municipality that assesses tax to any bonafide business on any item that will be resold. That means that all inputs, raw materials, or outsourced activities that result in a product or service that will be resold to others should be exempt from sales tax and business tax. Coffee for the coffee pot, toilet paper, cleaning supplies, printer ink etc. to be consumed and not resold would not be exempt from sales tax but would continue to be exempt from the business tax.

But the 9% sales tax on some items would still be so much less than one of the world's highest corporate taxes on profits that we currently have that it would still be a positive and not negative impact on the economy.
So now were talking about exceptions, were talking regulating every business. Were creating a huge loophole for everyone to walk through.

That doesnt really help the case.
No, we are talking about applying taxes to business as they are now applied but at a 9% rate rather than the second highest corporate tax rate in the world. (And that is only a fraction of a percentage below the highest corporate tax rate in the world.)
 

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Oh.....you mean if this place was the best, most free place on earth with the most wonderful, get r' done population......they might be expected to pay a higher price to operate here?
 

LoneLaugher

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I know of no state or municipality that assesses tax to any bonafide business on any item that will be resold. That means that all inputs, raw materials, or outsourced activities that result in a product or service that will be resold to others should be exempt from sales tax and business tax. Coffee for the coffee pot, toilet paper, cleaning supplies, printer ink etc. to be consumed and not resold would not be exempt from sales tax but would continue to be exempt from the business tax.

But the 9% sales tax on some items would still be so much less than one of the world's highest corporate taxes on profits that we currently have that it would still be a positive and not negative impact on the economy.
So now were talking about exceptions, were talking regulating every business. Were creating a huge loophole for everyone to walk through.

That doesnt really help the case.
No, we are talking about applying taxes to business as they are now applied but at a 9% rate rather than the second highest corporate tax rate in the world. (And that is only a fraction of a percentage below the highest corporate tax rate in the world.)
you really like that talking point, don't you? Wouldn't it be nice if you could add the facts regarding the rate that is actually paid by US corporations. But...then it wouldn't be as much fun.
 

WatertheTree

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I know of no state or municipality that assesses tax to any bonafide business on any item that will be resold. That means that all inputs, raw materials, or outsourced activities that result in a product or service that will be resold to others should be exempt from sales tax and business tax. Coffee for the coffee pot, toilet paper, cleaning supplies, printer ink etc. to be consumed and not resold would not be exempt from sales tax but would continue to be exempt from the business tax.

But the 9% sales tax on some items would still be so much less than one of the world's highest corporate taxes on profits that we currently have that it would still be a positive and not negative impact on the economy.
So now were talking about exceptions, were talking regulating every business. Were creating a huge loophole for everyone to walk through.

That doesnt really help the case.
No, we are talking about applying taxes to business as they are now applied but at a 9% rate rather than the second highest corporate tax rate in the world. (And that is only a fraction of a percentage below the highest corporate tax rate in the world.)
No your not. There is currently no paperwork or anything to file with the federal government about sales, and taxes and who is not paying for why. Your putting that regulation on them, your giving business a reason to cheat. Owners would put cars under the business name etc. Same as is done now. Large corporations will cheat like crazy, cause in order to get the reciept or proof of business asset you have to go through an army of attorneys.

No thats not a good idea at all.
 

Foxfyre

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So now were talking about exceptions, were talking regulating every business. Were creating a huge loophole for everyone to walk through.

That doesnt really help the case.
No, we are talking about applying taxes to business as they are now applied but at a 9% rate rather than the second highest corporate tax rate in the world. (And that is only a fraction of a percentage below the highest corporate tax rate in the world.)
No your not. There is currently no paperwork or anything to file with the federal government about sales, and taxes and who is not paying for why. Your putting that regulation on them, your giving business a reason to cheat. Owners would put cars under the business name etc. Same as is done now. Large corporations will cheat like crazy, cause in order to get the reciept or proof of business asset you have to go through an army of attorneys.

No thats not a good idea at all.
They already have a reason to cheat. That was discussed earlier in the thread. There are also reasons that cheating is kept within reasonable boundaries which has also been discussed in the thread. Only five of the fifty states do not have a state sales tax so most businesses are subject to a sales tax. A federal sales tax would almost certainly work similarly to the state taxes and even if there were no exemptions for resale purchases, it would still be less onerous on the individual business than the current corporate tax. It would however raise the costs of everything else people buy, so I'm pretty darn sure it would not apply to materials and processes necessary for a business to produce its product.

For the life of me, I can't see how people would want to continue the current destructive regulation, mandates, and oppressive taxation that is driving millions of our jobs overseas. Maybe the 9-9-9 plan isn't the way to go and that will be shown, but how can you be so partisan to not want to look for a better way to do it?
 

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Why would a corporation be expected to pay a higher tax on profits in this country than other places? Any thoughts?
Because you're doing business in the USA. Should we tell corporations you don't have to pay workers here any higher than you would elsewhere? You make money here, you pay our taxes. You don't want to make money here, go about your business. Someone else will gladly make money here.
 

Foxfyre

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Why would a corporation be expected to pay a higher tax on profits in this country than other places? Any thoughts?
Because you're doing business in the USA. Should we tell corporations you don't have to pay workers here any higher than you would elsewhere? You make money here, you pay our taxes. You don't want to make money here, go about your business. Someone else will gladly make money here.
But when it becomes far more profitable to do business elsewhere than it is to do business here, the companies, both those American born and everybody else, will go about their business elsewhere.

So ask yourself. Which is more important? The government imposing ever more expensive taxes, mandates, and regulation on American business? Or for American business to have as much freedom as possible to make profits and therefore hire and pay people here?

The political class answers that question much differently than does mainstream America. You call yourself inthemiddle. Are you really?
 

Charles_Main

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The concept of a national sales tax is intended to place an increased comparative tax burden on lower and middle class individuals, a comparatively weak tax burden on the wealthy, and especially a negligible tax burden on companies that do not deal in "tangibles."
No, that is the Inaccurate Liberal propaganda about a National Sales Tax. The Truth is most National Sales tax plans that have been discussed. Exempt Things like basic Groceries, and house Hold goods. It will be people who have money to spend, to eat out, buy large ticket Items, and Buy the stuff that is not a Necessity of life and there for is not Exempt from the Tax, that will pay the lions share of the Tax.

It's a consumption tax, and simple math tells you those who consume less, will pay less of it. especially when your Basic Necessities of life like Unprepared Food are Exempt from the Tax.

It also has another big benefit that no other tax plan has. A national Sales tax would be paid by everyone who buys items in the US. All the 50 Million Tourists who come here each year, All the Illegal Aliens, anyone who who lives abroad buy buys stuff in the US. All would pay the 9% national Sales Tax.

The Real Reason so man Oppose the 999 plan is that the 49% Of americans that current pay 0 Federal Income tax after all Deductions, and Credits, will actually have to pay a small % of their income in Taxes.

Now they libs can explain to us all how everyone paying their Fair share jives with 49% of all workers paying 0 or actually getting more back than they paid in, when it comes to federal Income tax Withholding.
 

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