Cain tax plan would benefit wealthy, hurt poor
Those are some of the estimates from the Tax Policy Center’s analysis of Cain’s proposal, which has helped make him a leading contender for the Republican 2012 presidential nomination.
Though some key questions about the 9-9-9 plan remain unanswered, the Tax Policy Center’s analysis is one of the first attempts to take a comprehensive look at its potential impact.
Cain’s 9-9-9 plan would replace much of the current tax code with a flat-rate system: a 9 percent individual income tax, a 9 percent corporate income tax and a 9 percent national sales tax. Estate and gift taxes would be eliminated, as would the payroll tax and most tax credits, deductions and exemptions.
In terms of investment taxes, capital gains would be tax-free, and dividends would be deductible for businesses paying them but taxable at 9 percent for investors who receive them.
According to the Tax Policy Center, households with incomes below $30,000 would have, on average, between 16 and 20 percent less in after-tax income than they do today.
By contrast, households making more than $200,000 would see their after-tax income grow by between 5 percent and 22 percent on average.