Herman Cain's 9-9-9 plan, has an Austrian economist adressed it yet?

[John_James]

@danbeaulieu

John: I’m not sure why your approaching this the way a lawyer approaches his enemy. I simply stated my concerns and asked to be informed. In that request - I am admitting ignorance. I know you didn’t mean any harm but I feel attacked for addressing concerns I have.

Apologies if you felt attacked. Not intentional.

With our current tax code we don’t make ends meet with all of our government programs, we’re at a deficit. How would that same government work with lower income taxes? Cain claims both that the plan would be revenue neutral and that the 9% sales tax would make people save more instead of purchasing.

I never heard him say it would be revenue neutral, but even still, a free-er economy is a wealthier economy, which means that current spending could be handled when output increased enough. (Again, I’m not advocating Cain’s plan, I’m just answering the questions.)

Wouldn’t that notion also create “less” taxation through lack of consumerism? Wouldn’t that hurt production?

Quite the opposite actually. Higher taxation does not create more production. Neither does higher consumption. It is increased savings that leads to increased production. See here. (especially the video)

Wouldn’t production move to states with a lower state tax, thus hurting the states who choose to tax?

Is that not what happens now? Sounds like more states should cut taxes.

state sales and utility taxation?

I hear property taxes and income taxes are pretty significant.

they are different obviously, but they could wind up extremely different if one state maintains a large state income tax while another state has a low tax rate.

Is that not the point of having sovereign states? The whole idea of federalism was such that each state would be its own entity, allowed to experiment and set itself up how those local citizens wanted to live.

Once again, I’m here to learn so I don’t see how blatantly twisting what I said by inferring that I think people shouldn’t get to keep their money.

Again, I’m sorry if you felt offended, but I twisted nothing. “Less taxation” = “people keeping more of their own money”…yes? You literally stated “lowering the taxation on capital gains and dividends to 0%” was a “perverse loophole”.

Less taxation = people keeping more of their own money = lowering the taxation = perverse loophole

I don’t see the twist.

Your response blanketed the notion as if it applied to all classes, which it doesn’t.

It doesn’t? One class of people won’t pay taxes on capital gains and dividends, and another class will? I was unaware of that part of the plan.

If by removing both the capital gains and dividend taxes doesn’t that allow rich business men to pay essentially nothing while the middle class consumer pays income and potentially large sales tax?

For one thing, not all businessmen make 100% of their income from capital gains and dividends. In fact, the vast majority take plenty of salary. Buffett is an exception…not a rule. And why wouldn’t rich business men pay large sales taxes?

@danbeaulieu

Herman’s plan outlines a way for the rich to avoid taxation while the lower class pays taxes.

Again, you’re going to have to explain this.

I hate taxes, but if we’re to have them shouldn’t we each pay the same percent? If not, isn’t that once again a form of wealth redistribution?

How is a flat tax not paying the same percent? 9-9-9. For everyone. Period. I don’t understand how you get more “same percent” than “same percent”.

My point is that this loophole that big business enjoys may not be apparent or available at all to smaller companies whose only shareholders are the owners.

a) why is a 0% tax rate a “loophole”?

b) Why would a small business not be able to enjoy the same benefits of 0% taxation?

Not to mention that the exploitation of such a loophole as opposed to paying your tax should be considered immoral. Maybe I am wrong on this… but again that’s why I brought it up. To get your take.

I suppose everyone is entitled to their own idea of morality, but my take is it is immoral to take someone else’s property under threat of force. Your take is it is immoral for the person to try to avoid their stuff being stolen in such a manner. To each his own I guess.

But in this particular case, the person isn’t even doing anything against the law. He would not be doing anything in secret. He wouldn’t even be doing anything against the will of his would-be exploiter. You’re literally saying that if the government mandates “you can keep your money”, and someone in fact does just that, they are being immoral. That is baffling to me.

So Wal-Mart hires 10 more people or builds a new addition with all of their savings through tax avoidance, that should effectively help them to drive the local mom and pop store out of business. Now that the mom and pop store that reinvests their money in the community is out of the way Wal-Mart, now doing more business is free to send our money overseas where their production is.

This touches on a lot of issues and common fallacies that are outside of the scope of this current discussion. If you are truly truly interested in getting into it, we can make another thread and do this, but really the best recommendation I can make is to read at least one of the top 3 books shown at this post. They are all excellent and will get at the heart of concerns like this walmart question as well as many others you probably have. The one on the left and the one on the right are available for free. You can click each one and go to the “links” section for the resources page to download them.

P.S.

This might help too: New member? READ THIS!