There's been a lot of talk about Herman Cain lately, mostly because of his famous (or infamous) 9-9-9 tax plan. Today I will say this about Herman Cain but rest assured I will blog more generally about politics in the near future.
A friend of mine the other day mentioned that Herman Cain was his favorite candidate for president because of the flat tax plan which would simplify the tax code as well as encourage "equality." I have lots of compassion for this friend because he is a friend of mine and I intend to keep it that way. Nothing political is big enough to ruin a relationship unless you want it to.
For those of you who don't know, Herman Cain's 9-9-9 plan removes the current federal tax code altogether and installs a 9% tax each for business, sales, and income. The exceptions for this include deductions for charitable giving and a 0% income tax for those below the poverty level.
It should be noted right away that this is far simpler than the tax plan we have today. Currently the corporate tax is 35% with several hundred possibilities for deductions or exemptions. This problem exists to a lesser degree with our federal income tax system. I think it is also important to recognize that even if Herman Cain was elected president, it is remarkably unlikely that this plan would ever surface in the form of a law. American's have this interesting habit of talking about presidential candidates like they are voting for king.
My own opinion on the matter is based on the following facts. Middle classed and under classed American's would be paying more than they are now. Nobody is sure just how much, but any way you spin it, it is more. Conversely, and in the same way, the wealthiest Americans will be paying less. I will back this up momentarily.
I will begin however by addressing the concept of equality. On the surface, asking those who pay nothing to pay their fare share and asking those who pay most to pay less seems like a step towards equality. I want to evaluate this through a quote that I took from a very wise man named Richard Stearns in his book entitled The Hole in our Gospel, "it is not that the poor are lazier, less intelligent, or unwilling to make efforts to change their condition. Rather, it is that they are trapped by circumstances beyond their power to change" Stearns (118). Consider the notion for a second that those who aren't paying taxes (nearly 40% of American households) aren't being asked because it is somewhat rightly assumed that they can't.
I myself am a college student in Michigan. I work fifteen hours a week and have about 4.7% withheld from my paycheck. I pay most of my tuition by selling stock that my parents invested when I was between the ages of birth and sixteen. I also pay a capital gains tax on these. At the end of the year I file a federal and state return. My state tax is a couple hundred dollars and my federal tax is about a thousand dollar refund (yes, I gain a thousand dollars, roughly equal to what was withheld). In essence, I am a household that does not pay taxes and I am above the poverty line. But I will say that if I was filing taxes under the 9-9-9 plan, it might bleed me dry. I legitimately believe I would not be able to go to college. My opinion on this plan is simple: it is not a good plan.
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