Opinion: Campaign 2012: Winners and losers in Cain’s ‘9-9-9’ plan
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Here’s a question that Herman Cain should be asked at Tuesday night’s debate among Republican presidential candidates: Who will be the biggest winners and losers from your ‘9-9-9’ plan?
The nonpartisan Tax Policy Center offered this answer Tuesday: The plan would be a windfall for the top 10% but a tax increase for most of the bottom 90%.
Granted, Cain hasn’t settled on all the details of his plan, so the center’s projections should be taken with a grain of salt. And its analysis is only as good as the model it used to predict the effects of changes in the tax code. That model was developed by tax experts at the left-leaning Urban Institute and the centrist Brookings Institute, the think tanks behind the Tax Policy Center.
Nevertheless, the results aren’t a complete surprise. Cain’s plan would replace the graduated income tax and the flat payroll tax with a 9% flat tax on personal and corporate income and a 9% national sales tax. That suggests a significant cut for households in the higher tax brackets, although those taxpayers would be disproportionately affected by the elimination of many exemptions, deductions and credits.
The center projects that Cain’s proposal would result in tax hikes for the vast majority of people in the bottom 80% of household incomes. More than three-quarters of the households in the top 5%, on the other hand, would see a tax cut of 6.5% of more.
The result, the center projected, would be a shift in the federal tax burden from the 10% to everybody else. The further down the income ladder you go, the bigger the tax increase and the larger the reduction in after-tax income (in percentage terms, not dollars).
Ouch. Does this mean that voting for Cain’s proposal would violate the pledge so many Republicans have taken not to raise taxes?
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-- Jon Healey
