How not to change the tax code [Most commented]
How hot is former Godfather's Pizza magnate Herman Cain? For the second day in a row, the new front-runner for the GOP presidential nomination dominated the "most commented" category here at The Times' Opinion Manufacturing Division. More than 100 readers weighed in on Sunday's editorial about Cain's "9-9-9" tax plan, even more than had posted comments about Friday's piece on Cain's views regarding racism.
The Times' editorial board praised Cain for coming up with a plan that would radically simplify the tax code. But it complained that the proposal would shift the tax burden from the wealthy to the middle and lower classes:
The current system gradually increases the tax rate on individuals and businesses the more they earn. Moving to Cain's formula would effectively dun those least able to pay in order to spare those at the other end of the economic ladder, in the hope that the tax cuts for high earners would translate into more jobs, faster growth and higher wages. We tried a less extreme version of that approach in President George W. Bush's first term, and the rising tide that resulted lifted only the yachts.
Commenters were roughly evenly divided between supporters and critics of Cain's plan. What follows is a sampling, edited only to correct the occasional spelling error.
A flat-rate tax system is the way to go
Progressive income tax probably does more to promote class warfare than Karl Marx. If the middle class is disappearing, that plus progressive taxation must mean the country is being divided into a small taxpaying class primed to oppose virtually any public service and a large class that consumes services but is oblivious to their cost. What tends to get lost in this environment is a rational calculus of whether services are being provided efficiently and cost-beneficially.
Flat-rate taxes could put all taxpayers on the same page and direct our discussions toward more substantive questions.
Everyone should pay taxes
Why are only the rich supposed to pay taxes? If this shifts some of the burden to those least able to pay, maybe they'll start to vote for candidates who STOP SPENDING SO MUCH MONEY. When you have skin in the game, the game changes.
Poor people should NOT be exempt from paying taxes. They should pay THEIR FAIR SHARE. If you broaden the base, you can lower the rates. NO FREE RIDES. Cain's plan will lower the price of goods for everyone, including poor people, even including the sales tax. You've never met Herman Cain, you have no clue when you make that ignorant statement that he has "no compassion". The WELFARE STATE HAS FAILED. We can no longer afford to coddle the idiots and morons (like the Wall Street occupiers who should be kissing the ground they are urinating and defecating on!)
The plan would be good for everyone, including the poor
I disagree completely with your assessment of Herman Cain's 9-9-9 plan. I don't think it would raise taxes on the poor since the products that we purchase currently have hidden taxes in their prices. This program would eliminate those hidden taxes and lower prices and stimulate competition. Further, the Cain plan would bring the underground economy into the tax system. Over a trillion dollars is earned from illegal activity in this country annually and virtually all of it goes untaxed. In addition, trillions of dollars are earned annually under the table and these monies go untaxed. It's time to bring these folks into the mix and pony up. Wouldn't it be nice to eliminate the dreaded April 15th?
Jacking up the sales tax is a bad idea
Oh, Boy! I'm ready to pay 17% in sales taxes -- 9% for Cain & 8% for the state. Now, that's what I call a great idea... NOT!
Okay, he'll only tax new items, like new food, new gas, new utilities; instant inflation. Then I need to HOPE that this helps the economy. And when it doesn't, we are stuck with a national sales tax forever. Oh, I'll save on income taxes? That may cover the loss of deductions for owning a home and having children. So I'll HOPE for that also. Any state like mine with income tax and an already high enough sales tax suffers even more. Illinois is in the business of chasing out business so the jobs we HOPE for are out of state. Can't sell the house so I'm stuck. NO THANKS CAIN.
The idea for 9-9-9 came from a computer game
He even used the default SimCity settings? Ha ha ha. Maybe he can develop a foreign policy based on Call of Duty.
Yes Republicans, we really think you are that dumb.
We need another alternative
A better idea for tax reform: The Land Value Tax first proposed by 18th century economist Henry George. No sales or income tax, only a tax on the value of land.
Simple to define and enforce: You can try to hide income, but you can't hide land.
Progressive AND pro-growth: The wealthy own most of the expensive land and would pay most of the taxes, but the marginal tax on both income and consumption would be ZERO - a win-win for liberals and conservatives.
Henry George believed that what you earn from your labor, business or profession is 100% yours, but the value of your land depends on the value of your community and is therefore fair game to be taxed to support that community.
The Land Value Tax sends the message that you make money by creating useful products and services, not by wheeling and dealing in real estate.
With a surplus of pretzels, the pretzel workers are out of work, so they can't buy the pretzels. The relative surplus (supply/effective-demand ratio) thus increases.
Create jobs in a condition of surplus? Why? Ah, the people need money and consumer spending needs a boost, for the sake of the stock market. So, let's raise taxes/debt to create useless jobs and have the "workers" go to "work" together in the rush hour, keeping robots out of work. Have i got this right?
Useless jobs = wage-slavery. Free the wage slaves. Skim at a minute percentage the daily interbank transfer, shunt to grass roots as guaranteed minimum income (GMI). GGMI =global guaranteed minimum income. Purchasing shunts the GGMI back to the banks with profit, increasing interbank transfer, thus increasing next week’s GGMI. Loop it and you have economic nuclear fusion (more energy out than you put in).
Makes the rich richer at the cost of making the peasants affluent, and gets rid of the rush hour.
Start slowly to minimize inflation (too much money chasing too few goods), give producers time to gear up production and give time for interbank transfer to swell.
Randy's proposal seems about as conceptually sound as a perpetual motion machine, but maybe I just don't understand the vision behind it. I am, after all, just a wage slave.
I'll give the last words to Jeff1947, who elegantly summed up the challenge for any tax-code reformer:
What should the goal of the tax system of the United States be? On the one hand, you could say that its goal is to raise revenues in the most efficient manner. On the other hand, you could say that its goal was to not only raise revenues but also to advance certain desired ends, promote society equality, and so forth. Today we have a tax code that is more than 80,000 pages that is written to promote all sorts of policies and to reward all sorts of people. No sane person thinks that a tax code of this length and this complexity makes any rational sense. The trick is to find a simpler tax code that manages to convince anyone/everyone that it is fair and that promotes all the results that people want. Good luck. Any tax plan with create winners and losers,will reward some and penalize others, and will be considered fair by some and unfair by others. These are the unspoken realities this editorial ignores.
-- Jon Healey
Credit: AP Photo / Mark Humphrey