Truth Before Dishonor

I would rather be right than popular

Just Say No To 9-9-9

Posted by John Hitchcock on 2011/10/07


Robert Stacy McCain has been a strident supporter of Herman Cain for President since essentially the beginning, while I had been a strident supporter of Sarah Palin for President since the 2008 elections. As I said when I reported Palin’s decision to not run for President this cycle, I was going to take a closer look at Cain because Rick Perry was “third of three” for a reason (that being I’m not particularly interested in Big Government or Left-of-80 percent positions), and this is part of my closer look at Cain.

As many people know, Herman Cain has introduced a 9-9-9 tax plan with his candidacy. It is but a first step in his overall plan, to get the ball rolling as it were. It’s a good idea. But it’s a good idea that will fail miserably if implemented. Here’s what it is:

Phase 1 – 9-9-9

  • Current circumstances call for bolder action.
  • The Phase 1 Enhanced Plan incorporates the features of Phase One and gets us a step closer to Phase two.
  • I call on the Super Committee to pass the Phase 1 Enhanced Plan along with their spending cut package.
  • The Phase 1 Enhanced Plan unites Flat Tax supporters with Fair tax supporters.
  • Achieves the broadest possible tax base along with the lowest possible rate of 9%.
  • It ends the Payroll Tax completely – a permanent holiday!
  • Zero capital gains tax
  • Ends the Death Tax.
  • Eliminates double taxation of dividends
  • Business Flat Tax – 9%
    • Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.
    • Empowerment Zones will offer additional deductions for payroll employed in the zone.
  • Individual Flat Tax – 9%.
    • Gross income less charitable deductions.
    • Empowerment Zones will offer additional deductions for those living and/or working in the zone.
  • National Sales Tax – 9%.
    • This gets the Fair Tax off the sidelines and into the game.

9 percent flat income tax
9 percent flat corporate tax
9 percent national sales tax

It is designed to unite those who seek a flat tax and those who seek the “fair tax”. And it is designed as a first step in shifting the tax structure toward something Cain believes is much better. I get that and respect the good intentions of it. But it won’t work. And the reason it won’t work is due to the fallen nature of man.

I will not get on board with any “Fair Tax” plan unless and until the Income Tax Amendment is repealed and the Income Tax (all forms of it) is illegal because, and this is important, any National Sales Tax that is put in place while the Income Tax still exists will grow and the Income Tax will never be repealed. And we’re worse off than when we started. 35 years ago, the sales tax in Ohio was 4.5 percent. Today, the sales tax is 7 percent or above. (I am not delineating between State sales tax and Local sales tax because (aside from the fact I don’t know the numbers) it is irrelevant to the discussion.) In a much shorter time-frame, Mount Vernon income tax rates went from 1 percent to 1.5 percent, a 33 percent climb in the income tax rate. With both forms of taxation on the books, neither form will vanish but both forms will continue to climb.

A National Sales tax would have to be installed by amending the Constitution for it to have any chance of being safe from man’s fallen nature, and then it would have to be written perfectly to prevent Liberal judges and Liberal legislatures from distorting it or ignoring it completely. And even then, there is in all likelihood a guarantee the Liberal judges and legislatures will destroy all meaning of the Amendment.

A National Sales Tax would very quickly become a VAT or excise tax, where a product is taxed at all levels prior to finally being taxed when the consumer actually buys it. For example:

Mining company sells aluminum ingot to widget parts die-cast company.
Federal government adds 9 percent tax to aluminum ingot.
Cost of ingot = 109 percent

Widget parts die-cast company sells die-cast widget parts to widget manufacturing company.
Federal government adds 9 percent tax to die-cast parts.
Cost of ingot ≈ 118.8 percent

Widget manufacturing company sells widgets to widget-using electronics manufacturer.
Federal government adds 9 percent tax to widgets.
Cost of ingot ≈ 129.5 percent

Widget-using electronics manufacturer sells electronics to wholesaler.
Federal government adds 9 percent tax to electronics.
Cost of ingot ≈ 141.2 percent

Wholesaler sells electronics to retailer.
Federal government adds 9 percent tax to electronics.
Cost of ingot ≈ 153.9 percent

Retailer sells electronics to YOU.
Federal government adds 9 percent tax to electronics.
Cost of ingot ≈ 167.7 percent.

As you can see, if a National Sales Tax is added imperfectly, it will necessarily cause a huge cost explosion for everyone who buys anything, and harming the very people the Liberals claim to champion the most. If it is added perfectly, but not by Constitutional Amendment, it can be subsequently destroyed with great ease. And if it is added perfectly by Constitutional Amendment, we’ve all seen how Liberal judges and legislatures destroy what is clearly written in the Constitution.

And the Income Tax will never disappear if it is planned to disappear at a later date after the Sales Tax kicks in. So, there will be all sorts of new levels of hidden tax on top of the tax that is already seen, doing great damage to the economy and society as a whole. And as everyone who is clued in already knows, the Liberals are incapable of accepting a Flat Income Tax because they are incapable of accepting any tax code that is in line with the Tenth Commandment. Liberal tax structure is designed to violate the Tenth Commandment, and always will be.

So, no. No 9-9-9. No National Sales Tax, especially while the Income Tax is still with us. Just say no.

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