We’ve been reporting on the shortcomings of Herman Cain’s 9-9-9 tax plan since before it was cool. The plan wipes out the current code and creates, in effect, a nine percent flat income tax, a nine percent value added tax, and (somewhat redundantly) a nine percent national sales tax. Even generous assumptions suggest it would leave the government short of the revenue it will need to fund key government services and programs like Medicare and Social Security. And, by dramatically lowering income taxes, and replacing them with taxes that hit consumers, it’s regressive.
But we didn’t know just how regressive until now.
The Tax Policy Center — a joint project of the Brookings and Urban Institutes — has calculated in detail the impact Cain’s plain will have on a people in several different income brackets. What they found is that 9-9-9 translates essentially into a significant tax increase for the vast, vast majority of Americans, and a tax cut — in some cases a massive one — for people making over $200,000 annually.
Under the 9-9-9 plan, everyone with income below $200,000 will pay a significantly higher share of federal taxes than they do right now, while everyone with income above $200,000 will contribute less overall to federal revenues. People making over $1 million would ultimately pay a 174 percent smaller share of federal taxes than they do now.
Tax Policy Center’s raw numbers are below. Here they are in handy chart form. Click to enlarge.
To whittle this down, everyone who’s not already rich gets poorer. Everyone who’s already rich gets richer. And if you’re really rich, you’ll get to pay hundreds of thousands of dollars a year less in taxes than you do right now.
Charts by Brian Fung.
