The Observation Deck

Brian Pedaci wrote:Have you only considered the Federal income tax you'd pay, or have you also factored in the added 9% sales tax on everything you buy?

Trust me, if this ever became reality, the devastating effect on the lower and middle class, and the accompanying increase in the misery index in this country would drive "Occupy"-style protests through the roof.

999 might also be how many billions are added to the deficit each year.

But hey, as long as the rich are paying lower taxes, it must be good, right? Like so many of Cain's positions, this was devised in order to get attention, not as a serious policy proposal.

Brian

It is far harder to do the math then just go yeah.

No wonder we are living in the largest transfer of wealth ever.

The USA has become Magic Mountain, everything trickles up!


.

I get at least 6% more in my paycheck... and that is transferring wealth from who to who?

Jim O'Bryan wrote:

Stephen Eisel wrote:http://www.hermancain.com/999plan
Very interesting

Stephen / Roy
I see you hate paying more taxes, so why back a plan that would see your taxes double?
Just curious.
.

Stephen Eisel wrote:I get at least 6% more in my paycheck...

My net will increase approximately 4.4%.

Brian Pedaci wrote:Have you only considered the Federal income tax you'd pay, or have you also factored in the added 9% sales tax on everything you buy?

Brian, what is the corporate tax rate right now?
The Corporate tax rate ranges from 15% to 35% depending on taxable income. Corporations, then, pass that on to the consumers.
The third (or first or second) 9 in the 999 proposal reduces the corporate tax to 9%. Corporations can then pass that savings on to the consumers, lowering prices and, thus, counteracting some or all of the 9% sales tax.

Brian Pedaci wrote:But hey, as long as the rich are paying lower taxes, it must be good, right? Like so many of Cain's positions, this was devised in order to get attention, not as a serious policy proposal.

Yes, it is good.


I don't know one single poor person that ever hired someone for a job, do you?

Roy Pitchford wrote:The third (or first or second) 9 in the 999 proposal reduces the corporate tax to 9%. Corporations can then pass that savings on to the consumers, lowering prices and, thus, counteracting some or all of the 9% sales tax.

Do you really believe the corporations will lower prices? If so I want to live in your dream world.

That said I am glad to see someone like Cain thinking outside of the box, even though I don't think it will be good for the middle class, I am still glad to see a politician thinking something other than the status quo.

Like so many of Cain's positions, this was devised in order to get attention, not as a serious policy proposal.

Unlike Obama? Hype and Change? Reduce the deficit by half by the end of his first term, get us out of the war in Iraq within 18 months of his election and the war in Afghanistan, the sunlight signing promise, Capital gains tax elimination, New American jobs tax credit, Hiatus on 401(k) penalties, No jobs for lobbyists, earmark reform and how about transparency?? Obama had absolutely no executive or management experience before taking office. He ran on nothing more than hype and all of the Liberal kool-aid drinkers sucked it down without a second thought. Herman Cain is not running on hype but is running on his real world experience / resume. He is applying what he has learned in the real world to his platform. He has been a very successful executive that has taken a company on the brink of Bankruptcy to profitable in just 14 months.. Unlike Obama, he has real world experience and understands how to run a succesful company. Also, he is not a career politician.

Danielle Masters wrote:

Roy Pitchford wrote:The third (or first or second) 9 in the 999 proposal reduces the corporate tax to 9%. Corporations can then pass that savings on to the consumers, lowering prices and, thus, counteracting some or all of the 9% sales tax.

Do you really believe the corporations will lower prices? If so I want to live in your dream world.

Well, its a basic economic principle that lower prices sell more goods. Not a bad thing.

But, I'll play devil's advocate for a second.
Let's say they don't and it leads to record profits for hundreds of publicly-traded corporations. Those companies now turn around and pay out better dividends to their shareholders, which will include millions of people with 401(k)s, IRAs and pension funds. Look at that! The money is still finding its way to the people, and not necessarily the rich ones. Not a bad thing.

Or...
Let's say its a private corporation, no shareholders. That company, with its increased profits, can now expand, hire more people and/or pay its workers better. Not a bad thing.

Or...
Assuming the absolute worst in a private corporation...the CEO of the company is evil-incarnate and every added cent of profit goes directly into his pocket. To paraphrase Han Solo, "What good is money if you're not going to spend it?" and the YouTube video I posted above applies. He spends the additional money, it helps someone below him/her on the totem pole that normally wouldn't have that added business. Still not a bad thing.

Stephen Eisel wrote:I will pay less under Herman's plan..

Most of us don't actually know what percentage of our income is paid in federal income taxes. I would be very surprised if you in fact knew. One of the attractions of Cain's plan is that it would greatly simplify the tax code so we could do our own returns.

Will Brown wrote:

Stephen Eisel wrote:I will pay less under Herman's plan..

Most of us don't actually know what percentage of our income is paid in federal income taxes. I would be very surprised if you in fact knew. One of the attractions of Cain's plan is that it would greatly simplify the tax code so we could do our own returns.

Turbo Tax gives me a percentage every year...

Roy,

As a CURRENT economics student I feel the need to point out that you are making a TON of assumptions with your conclusions.

Roy Pitchford wrote:Well, its a basic economic principle that lower prices sell more goods. Not a bad thing.

Not necessarily. It depends on if the good is a normal good or an inferior good. It is not as cut and dry as you present it. So yes, it is a basic principle, but we don't have a basic economy so we need more advanced ideas.

Let's say they don't and it leads to record profits for hundreds of publicly-traded corporations. Those companies now turn around and pay out better dividends to their shareholders, which will include millions of people with 401(k)s, IRAs and pension funds. Look at that! The money is still finding its way to the people, and not necessarily the rich ones. Not a bad thing.

Certainly it would be possible for a company to pay more dividends to shareholders. But just because it is possible does not necessarily mean that they will put that into practice. It is often the case that companies in more mature economies and certainly more mature companies would prefer higher retained earnings as opposed to dividends. So, really, what you should be concluding is that a company with lower taxes would be reinvesting in the company, which, although admittedly not a bad thing, is not the same thing as what you are saying. The money does not directly make its way to the people in the manner you describe.

Assuming the absolute worst in a private corporation...the CEO of the company is evil-incarnate and every added cent of profit goes directly into his pocket. To paraphrase Han Solo, "What good is money if you're not going to spend it?" and the YouTube video I posted above applies. He spends the additional money, it helps someone below him/her on the totem pole that normally wouldn't have that added business. Still not a bad thing.

This one is pretty funny. Not only because it is not as realistic as people want to believe, but because you are assuming that CEOs are going to invest the money into places that will help the average American. If the CEO were evil, do you think he is going to reinvest his wealth in something useful? No, he's probably going to buy a private jet, which is not that big a boost to the economy.

Also, I don't think the money can go directly to the CEO. How would that work? I mean CEOs get a salary, which might increase with productivity, but there is no way all the extra money would make it into his pocket without some kind of illegal activity. Besides, usually the higher paid CEOs are given stock options, which means that it is in the best interest of the CEO to increase the value of the company and NOT pocket that extra cash.

On a general note about Mr. Cain: I like the idea of simplifying things. I don't think the way that he is presenting it is going to go over well. He is a little too flip in my opinion about his whole campaign. Clearly he expresses a sentiment that many of us feel, things are too complicated. His manner of presentation could use work though.

In related news, Bank of America posted a 6.2B profit in the third quarter, after firing 30,000 people and 'passing along the savings' by instituting a $5/month debit card fee.

Seriously, I have no problem with some people earning a lot of money, but do they need ALL the money?

Brian Pedaci wrote:In related news, Bank of America posted a 6.2B profit in the third quarter, after firing 30,000 people and 'passing along the savings' by instituting a $5/month debit card fee.

Seriously, I have no problem with some people earning a lot of money, but do they need ALL the money?

But what was the cause of the $5 fee???? C'mon... And I will give you a clue.. it was not the bank..

The new regulations were the excuse for the charge, not the cause. Obviously, the new regulations didn't put them in a position where they were going to be unprofitable.

As of this post, Bank of America stock is up 51 cents per share. That’s an 8.46% increase today. The top 10 institutional and top 10 mutual fund holders own 2.76 billion shares worth over 30.1 billion dollars. If you own BAC through an institution, mutual fund, 401k, directly, etc....congrats, your capital is working for you!

Top Institutional Holders
STATE STREET CORPORATION
VANGUARD GROUP, INC. (THE)
BlackRock Institutional Trust Company, N.A.
JP MORGAN CHASE & COMPANY
WELLINGTON MANAGEMENT COMPANY, LLP
Capital Research Global Investors
Bank of New York Mellon Corporation
Capital World Investors
NORTHERN TRUST CORPORATION
FRANKLIN RESOURCES, INC

Top Mutual Fund Holders
VANGUARD TOTAL STOCK MARKET INDEX FUND
VANGUARD 500 INDEX FUND
VANGUARD INSTITUTIONAL INDEX FUND-INSTITUTIONAL INDEX FD
SPDR S&P 500 ETF Trust
FAIRHOLME FUND
GROWTH FUND OF AMERICA INC
INVESTMENT COMPANY OF AMERICA
JANUS OVERSEAS FUND
VANGUARD/WINDSOR II
COLLEGE RETIREMENT EQUITIES FUND-STOCK ACCOUNT


BTW, you can thank the Dodd Frank Act for the $5 debit card fee

Gee, how could I afford to get a new banjo? (adding the state and local sales taxes to a new 9 % Federal sales tax...)

Banjos aren't cheap y'know...

Better keep my old one in good shape.

At least they really do make great collection baskets.