Cain’s tax plan consists of three different 9 percent taxes — one on wage income (investment income is exempt), one on sales of goods and services (including food, housing, and medicine), and one on business income (investments and purchases from other businesses are deductible; wages, however, are not). But most Americans will end up paying all three of those taxes, for a combined tax rate of 27 percent of their income.
That’s because middle and low-income Americans get all, or nearly all, of their income from ordinary wages — all of which would be subject to Cain’s 9 percent wage tax — and then they spend all of their income, which means it would be taxed again by the 9 percent sales tax. Finally, the burden of the 9 percent business income tax would be passed on to them as well, either in the form of lower wages — since wages are not deductible — or in the form of higher prices for goods and services.
The bottom line is that most Americans will pay all three of Cain’s taxes, making their real federal tax rate 27 percent. Compare that to the current tax code, under which someone in the bottom quintile pays two percent of their income in federal taxes and someone in the middle quintile pays 15 percent. The fact is that pretty much everyone making up to around $100,000 a year would pay more under Cain’s plan than they do now.
So it will be a substantial tax increase for middle class Americans and a massive tax increase for the poorest Americans. And how will the rich fare? Guess.
“Where are the jobs? Where are the jobs?” That used to be the Teabilly siren song.
For two years, John Boehner couldn’t stop whining about jobs. “Where are they? Where are they?” he cried, orange tears plopping down his face:1
So much did our Republican compatriots love the idea of giving a job to every man, woman, and child (yes, I said child) that they ran on a platform of OMG JOBZ!! even though they have a provably craptastic record of job creation.
As the Wall Street Journal noted in the last month of Bush’s term, the former president had the “worst track record for job creation since the government began keeping records.” And job creation under Bush was anemic long before the recession began. Bush’s supply-side economics “fostered the weakest jobs and income growth in more than six decades,” along with “sluggish business investment and weak gross domestic product growth,” the Center for American Progress’ Joshua Picker explained. “On every major measurement” of income and employment, “the country lost ground during Bush’s two terms,” the National Journal’s Ron Brownstein observed, parsing Census data.
Obama, by contrast — even with a too-small stimulus — created hella jobs: Continue reading →
This infographic is circling the web. I know exactly jack and shit about budgets and deficits and free markets and tax breaks and 10 year costs versus yearly costs and wow — my head already hurts. Economics and I don’t get along, you see. But you are an intelligent lot, so I’m hoping to learn something from you, or at least, get some insight into what I should be reading in order to learn about this stuff. I don’t even know if this chart is accurate.
Help me, help you, help me learn some shit, won’t you please?1