Herman Cain's 9-9-9

[Teatownclown]

Yes, there is the devil's work here. 9-9-9 upside down.....

[heironymouspasparagus]

I remember Barbara Streisand threatened promised to leave the country if George W got re-elected.  She didn't go.

Seems to me that Carter had some difficulties with the economy and the morale of the voters in the later part of his single term.

What you really mean is when he got elected.

[Conan71]

What you really mean is when he got elected.

No, I believe he's referring to stagflation, 15% mortgage rates, the Iran hostage crisis, etc.

[heironymouspasparagus]

Come on guys!  Don't pretend.  You have to eliminate the uncertainty that the private sector is feeling.

They don't know if their health care expenses are going to rise 7% or 37%.
They don't know if they are going to have to weather another recession, and if so they don't know how long it's going to last.
They don't know if they are going what their taxes are going to be for the next 5 years, but they do know that the government wants to stick it too them.
They don't know how much the energy they need to produce is going to cost, but they do know it will cost more the heat/cool and ship because of new regulations.

They have a president that keeps saying "I'm going to tax you to pay for my spending. . .You are the reason, and I want my pound of flesh! . . .You don't pay your fair share."

You know, it would probably be different if he would actually do something and pull off the band-aid, but instead, he makes 3 years of speeches, and you never know if, or, and when the hammer is going to fall.

He's had 30 campaign fund-raisers and raised more money than God for his 2012 campaign.  The typical president has about 3 to 5 fundraisers by this time in a re-election cycle.

It is obvious that with every fiber of his being he hates the private sector, and with the exception of a few donors willing to pawn their soles for favor, the private sector hates him too.

I don't blame ANYONE for conserving cash, or doing what it takes to hold tight their key employees until the storm passes.  The companies that don't will most likely cease to exist when President Obama blows the seventh horn.

That is such a lame excuse for not buying capital equipment...or any other tool, machine, part or supply needed to run a business.  Does your client actually believe he has it worse than all the wildly successful companies in Europe.  Who operate at a much higher level of taxation/regulation??  If so, then he truly is stupid - not just ignorant!

And yeah, there are many wildly successful companies in the world that are hurting right now due to the economic cycle we are in.  It is NOT going to be permanent.  It will be either slightly shorter or slightly longer than anyone expects.  It will get better.  And anyone who is not looking to get their infrastructure in place now is missing an opportunity they will never see again.  There will be NO better bargains on ANY item for the rest of my expected life time (25 years or so....).  Prices are down, tax breaks are at the best levels they can ever be for many years to come, people to hire can be cherry-picked.  How can there be ANY uncertainty or hesitation to move right now based on future needs.  

The whole RWRE argument about doom and gloom follows the herd mentality we saw with the stock market dump of 2008.  Can't buy enough when the prices are highest, can't stay away enough when the prices are lowest.  Bunch of stupid out there.  When people are wringing hands and moaning and groaning - that is the time to move to position yourself for the better times coming.  And when everyone is jubilant, watch out - it is going into the dumpster!

[heironymouspasparagus]

No, I believe he's referring to stagflation, 15% mortgage rates, the Iran hostage crisis, etc.

I was talking about the part that said George got elected - not re-elected.

[Red Arrow]

What you really mean is when he got elected.

Could have been.  I just remember her making a big deal of it and then not following through.

[heironymouspasparagus]

Could have been.  I just remember her making a big deal of it and then not following through.

Well, she's a pretty good singer, but like so many who play the "I'm not a real <fill in the blank>, but I play one on TV" type, she is welcome to her opinion, but it isn't worth any more than yours or mine.

[sgrizzle]

Whackie tax plan that punishes the saver and taxes what's already been taxed once before when first earned.

Hilarious to me that this guy won the Florida Straw Poll. Go Herman! You're making the GOP/Teabaggers proud.

I believe the plan is to remove federal withholding.

[sgrizzle]

This looks good on the surface, but inacting a 9% Federal Sales Tax would add $.09 on every dollar that you spend on top of city, county, and state sales tax already in place. So in most states, the sales tax when people go to the store to buy groceries will double. So people on fixed incomes would lose what they can purchase because the tax would be close to $.20 for every dollar they spend. It sounds like a small amount, but it adds up quickly. Not to mention, that would add 9% if you buy a car, home appliance, have someone do work on your home, etc etc. Yeah, the 9% flat income tax would offset the 9% Fed sales tax to an extent, but you would pay more in the Fed sales tax at the end of the year then you saved in the income tax.

Doesn't this tax exclude groceries?

[dbacks fan]

^^^ Without knowing the details, it 'sounds' like a 9% tax on everything for his federal sales tax. That's why I said it would be on top of whatever tax you pay at the register.

[Gaspar]

Doesn't this tax exclude groceries?

Yes.  It excludes food, and basic necessities.  

He is correct though. Initially it would look and feel like you were paying more for goods and services, however you would be taking far more home, and the prices on goods and services would come down accordingly because the costs of raw materials, production, distribution and the over-all cost of doing business would decrease significantly, not to mention the labor costs of managing the current complex business tax system.

So if you were to go out and buy that $1,500 upright washer you saw advertised last week before the new tax structure took effect, you would pay about $1,722 for it, however your paycheck that was $800 last week would end up being about $950.  But. . .that's not all. . . now that it costs the less to assemble, ship, merchandise, advertise, and sell that washer, and because the effective tax rates on those services are always passed down to the consumer, the price on that washer would be forced down by competition at or even below the $1,500 level.

So, by eliminating burden along the production, supply, distribution, and merchandising lines and shifting that burden to consumption, you get efficiency that saves the consumer money, and increases revenue to the government by eliminating thousands of layers of bureaucratic waste.  These dollars are still dollars by the time they are counted as revenue rather than fractions of dollars.

It helps everyone.  Conservatives can rejoice in the fact that it spurs economic growth and job creation, and Liberals can rejoice that it provides more revenue for funding social programs, enrichment initiatives, environmental stewardship, and condoms in elementary schools.

The only threat it does pose is to the 10 billion dollar tax preparation industry.

Eventually when this becomes the standard 23% Fair tax most of the tax prep industry will have shifted into other accounting niches.

[AquaMan]

Ceteris Paribus.

That's an interesting analysis of the effects of the plan. It is a logical, if not a bit optimistic, projection of both consumer and business behaviors. I just don't see either actually behaving that way in reality. When prices go up due to increasing fuel costs, shortage of materials etc., the general rule is that they never go back down when those cost elements decrease. Just like government, businesses prefer to keep that largesse and spread it around to other needs (like salaries, dividends, other less profitable areas). Also of note is the marketing rule that it is much harder to raise prices than it is to cut them, therefore once you suffer the results of raising a price the manufacturer is hesitant to lower that price lest he get stung again by increasing costs.

The consumer on the other hand is likely over time to accept the newer price as acceptable. There was a huge outcry when gasoline hit a $1. Then it creeped up to 1.39, 1.59, 1.79 then another outcry at $2.00 a gallon. I made plans in 2005 for my fuel costs with a 33% increase over what I thought it would be. The price hit that point and didn't stop. Consumers now are planning for fuel costs in whole dollar budgets. $30 per week for fuel regardless of the cost per gallon. So, there is little incentive for the marketer to lower his price just because his costs have decreased. Especially during a fairly non-competitive business environment.

Here is an example of assumptions that go wrong in the real world. You would expect that demand for durable goods would stay predictable and constant. So, that upright washer at a reduced retail price would not stimulate more sales of washers because such durable goods are more dependent on population growth or decline. People don't trade in a frig or washer that is still working well without huge changes in the product. That is until around the mid nineties. At that point the manufacturing of those durable goods was coalesced into just a couple of large manufacturers who were unhappy with that durable goods model. They started to reduce warranties, reduce lifespans, reduce quality....and increase the "sexiness" of the products by making them a status/fashion item. They could do that because of the lack of competition in that market. Hence there will be no decrease in the price of that washer. The sales will increase however because of the manipulation of the product and its marketing. So any increase in income to the consumer evaporates because of the new model.

I have often heard that the real reason we don't have tax reform that establishes simple taxation is the resulting chaos it would cause in employment for the tax accounting and law professions. If so then there would be resolute opposition to such a plan by the congressmen, lobbyists and associations that represent these functions. They would also make a strong argument that tax law is used to generally encourage/discourage the business community whose excesses have historically caused havoc on the populace. Both sides, government and business, share the same human resources and seem to understand that.

The assumptions you have made are logical and support the plan. As long as it all takes place on a computer model.

[heironymouspasparagus]

Here is an example of assumptions that go wrong in the real world. You would expect that demand for durable goods would stay predictable and constant. So, that upright washer at a reduced retail price would not stimulate more sales of washers because such durable goods are more dependent on population growth or decline. People don't trade in a frig or washer that is still working well without huge changes in the product. That is until around the mid nineties. At that point the manufacturing of those durable goods was coalesced into just a couple of large manufacturers who were unhappy with that durable goods model. They started to reduce warranties, reduce lifespans, reduce quality....and increase the "sexiness" of the products by making them a status/fashion item. They could do that because of the lack of competition in that market. Hence there will be no decrease in the price of that washer. The sales will increase however because of the manipulation of the product and its marketing. So any increase in income to the consumer evaporates because of the new model.

That's why I have acquired a couple of sets of older Maytag washer/dryers (washer with the simple gear box design), and plan to keep them forever.  Repair every 5 or 10 years will always be cheaper than buying new anything.  And since Maytag is really now just another Whirlpool, I would not buy the new ones.

Same thing with vehicles.  I have settled on a transportation platform that works extremely well for me and am looking for at least 2 or maybe 3 more identical to add to fleet.  These 3 or 4 will last me basically forever (barring wrecks).  Rebuilding everything in them forever will still be hundreds of dollars a month cheaper than any other vehicle procurement plan available.

It's people like me that are bringing the economy down - I make do and only buy new/replacement when absolutely mandatory.  Like a water heater that crapped out last weekend (GE old - Whirlpool new - still won't last.) after only about 10 years.  No excuse for that nonsense, but hey, what can ya do?  Yeah, I can, and probably will, design/build my own water heater, but will wait until I can integrate a solar panel accessory to go along with that.  Stainless steel tank.  Adequate insulation - 6 or 7" versus 1.5".  Solar boost.  Extremely low operating cost, but will cost me about $900 to install.  Will last my lifetime.

[Gaspar]

Yeah, I can, and probably will, design/build my own water heater, but will wait until I can integrate a solar panel accessory to go along with that.  Stainless steel tank.  Adequate insulation - 6 or 7" versus 1.5".  Solar boost.  Extremely low operating cost, but will cost me about $900 to install.  Will last my lifetime.

Water heaters are killed by two things, neither of which you will be able to avoid with your design.

1. Dissolved solids like calcium and iron solidify in the tank and impede energy transfer, coat the thermostat, or in some cases just fill it up!

2. Softened water or low ph water actually eats the elements or in a gas tank, erodes the thermostat sensor (usually copper) or any other metal parts that come in contact with the water inside (a problem we don't have in Tulsa unless we have a water softener or RO system).

Stainless tanks will leach chromium oxide, a flavor that we admire in some wines and beers, but rather off-putting in water, it will also be harder to insulate effectively.

I'm just sayin. . .

[we vs us]

What I don't understand is, if we reset the entire tax environment -- which is essentially what the Fair Tax movement is advocating -- why the value of a dollar itself wouldn't also reset.  It stands to reason that if tens of billions more dollars become available to consumers and to corporations, wouldn't that essentially equal a huge inflationary push downwards on the value of the dollar?  And wouldn't that mean, as Aquaman suggests, that prices would find a sort of value equilibrium?  Just because the dollar price of a washer would change doesn't mean the value proposition would change.  It also doesn't mean that, even if I have $800 more in my pocket every month, that prices wouldn't take that into consideration and adjust accordingly.

In general, I don't understand what the "fair" part of the Fair Tax movement is there to remedy. To whom will this be more fair?