Herman Cain's tax plan

Just got an email from his campaign. He advocates a "9-9-9 Plan", as follows:

The plan begins with restructuring the tax code to include the broadest possible base at the lowest possible rate. The elements are:
• A 9% corporate flat tax. Businesses would deduct purchases from other businesses and all capital investment. The resulting gross income is taxed at 9%.
• A 9% personal flat tax. Individuals would deduct charitable contributions, then pay 9% on the rest of their income. Capital gains are excluded.
• A 9% national sales tax. This levy would be placed on the consumption of all new goods. Used goods purchased would be excluded.
My plan would also permanently eliminate taxes on repatriated profits, as well as payroll taxes and the estate tax.

 It's a step in the right direction, but ANY corporate or business taxes are simply carried over into the  cost of doing business, and so into the price people pay for goods and services. So, let's remove the 9% corporate flat tax.

A 9% tax on personal income retains the immense, immoral, and intrusive IRS, probably still forces businesses to do payroll deductions, and maintains the government's nose into your bank account, lest your kid's lemonade stand produce an untaxed profit. So, let's really save some gelt and eliminate the IRS along with the 9% personal tax.

This is going to require a Constitutional amendment outlawing any tax except a 10% national sales tax. This directly follows the health of the economy, and rewards government for reducing bad laws and regulations that stifle business and drive it overseas.


To prevent states and localities from adding taxes, the amendment would also require a 90% vote of all ELIGIBLE voters in an area or state to vote to temporarily raise the rate by no more than 5%, with a mandatory sunset date of no later than two years. To raise the federal rate would require a 90% vote of all ELIGIBLE US voters, with similar limits. If the "crisis" is dire enough, it ought to be possible to get the required numbers. No more simple majority or percentage of votes CAST.

To take care of everyday emergencies and "crises" such as hurricanes and earthquakes, 5% of the total tax collected each year would be placed into some sort of national savings account, managed by the same principles as successful large investment funds.

No borrowing allowed at the federal level without the consent of 90% of the eligible voters, as with tax increases. Interest to be paid from the tax income before funds are released to the government for operating expenses, not kicked down the road.

One other issue - revoke the right of public employees to unionize, including the USPS. Let any existing union employee retire with pension limited to a proportional share of whatever actually exists in the pension funds - if they have been raided by unions or governments, the retiree would know exactly where to focus their wrath. If you work for the people, you accept the wage the people are willing to pay you - or learn a valuable skill and get a job elsewhere.

I believe the government - federal, state, and local - should be capable of operating just fine on no more 10% of corporate sales of merchandise in the USA. Have every corporate seller of goods or services add 10% to the price of their product or service, which the purchaser pays. Every seller - wholesalers, retailers, every entity running as a corporate "person". No other taxes at all - no excise taxes, no hazardous waste fees, no surcharges, nothing. For damn sure, no "estate" taxes! Compliance ensured by spot checks of corporate books, with a penalty of 200% for cheating. I suppose we could keep part of the IRS for this purpose. Anyone operating as a sole proprietor would be exempt.

States would receive a 2% share of the federal sales tax based on the amount of tax collected in that state. They could divvy up that income as they and their citizens see fit.

If the citizens of a state or city can muster 90% of the people to support it, they could have a higher rate applied in their area, and the market could decide if whatever they offer is worth the extra tax expense.

The result? Governments forced to live within their means. True emergencies taken care of with a savings account like high school home economics classes used to recommend. An end to the government snooping into the lives of private citizens. Huge savings in government expenses by eliminating the thousands of tax collectors and their bureaucracies.

I'm sure you readers can pick holes in this - comments welcome!