Why do citizens support a flat tax?

[Dick Whitman]

This is an analysis of Herman Cain's 9-9-9 plan:

http://taxpolicycenter.org/numbers/displayatab.cfm?Docid=3221&DocTypeID=1The column to look at is near the far right, the change in dollars taxed each year. As you can see, everyone under $200K a year would pay more taxes than they are paying now. Looks like most middle-class people would pay more than $4,000 more dollars per year - almost $100 a week.

And yet, this report taken from the Des Moines Register finds that only 14 percent of voters making less than $50,000 a year thinks that they would be worse off under Cain's 9-9-9 plan:

http://www.slate.com/blogs/weigel/2011/11/04/poll_people_who_d_pay_higher_taxes_under_9_9_9_think_they_d_pay_lower_taxes.html
I guess this is the whole, "What's the Matter With Kansas" thing, but I'm trying to figure out why flat-tax plans are popular among middle-class voters. Possibilities:

(1) They actually feel like they should contribute more, because they aren't contributing their fair share now. But this would not explain the Iowa poll, which indicates that people actually think they will be better off, financially.

(2) They simply don't understand what a flat tax would do. They distrust the government, and in particular feel like the more complex tax code is the government attempting to put one over on them. They false equate simpler with better.

(3) They think that they would be better off because even though they would pay more taxes, they would recoup that money and more because of the tax breaks given to wealthy individuals. I think that this is probably the argument that board conservatives like YankeeFan and Old_Tony would advance.

Thoughts?

 

[Ben_Hecht]

An inability to see beyond their noses.

 

[bydesign77]

You would think libs would love a flat tax cause then everyone is treated as equal.

I'm still a supporter of the FairTax, but if this is as close as we can get, then I'm all for it.

There is no reason our tax code shouldn't be understandable and reasonable.

 

[The Big Ragu]

That 9-9-9 thing is not the traditional flat tax scheme. It is its own mess.

People supporting a flat tax, usually mean a flat INCOME tax. Cain has added a new tax in his 9-9-9 scheme. The third 9 in Cain's 9-9-9 is an introduction of a whole new national sales tax, or something similar to the European VAT taxes. Consumption taxes, such as what he wants to introduce, are regressive, since the people who spend a greater percentage of their income on consumer staples such as milk, bread and toilet paper, end up paying a higher percentage of their income.

The typical "flat tax" scheme has nothing to do with that 9-9-9, and does not include a VAT tax or sales tax component. For example, when Steve Forbes threw out a flat tax scheme, it was a tax on personal and corporate income, and it exempted the first $X of income (presumably, to help keep it from being regressive). The reason those ideas resonate with people are that they are simpler than our current mess of IRS code, which is complicated and creates a lot of inefficiencies because it takes people so long to figure out all the loopholes and do their taxes. A flat tax would be straightforward. Subtract your exemption and then pay X percent on your remaining taxable income.

 

[Tarheel316]

There is no reason our tax code shouldn't be understandable and reasonable.

Yes, there is. The current system keeps a lot of lobbyists and tax attorneys happy. And a lot of politicians fund their campaigns by shaking down lobbyists in exchange for tax breaks.

 

[Baron Scicluna]

An inability to see beyond their noses.

This.

(2) They simply don't understand what a flat tax would do. They distrust the government, and in particular feel like the more complex tax code is the government attempting to put one over on them. They false equate simpler with better.

And this.

People see the tax code as a pain in the ass, and rightfully so. But at the same time, they hear some plan with a little catchphrase like "9-9-9", repeated by the mainstream media which, with rare exceptions, doesn't delve into anything beyond the superficial, and think to themselves, "Oh, goody, a simple plan with a cute name!"

They don't think about how it'll affect them. All they know is, there's a shiny new object in the room, which is really just a polished version of Steve Forbes' tax card.

 

[dixiehack]

I'd bet the mortgage on No. 2.

 

[Starman]

Sheer stupidity.

And the result of 30+ years of corporatist media propaganda.

Want some simple, easy to unnnerstand facts?


I am in the average income bracket.

The 9-9-9 plan by Stepin Fetchit Cain would raise my tax bite over $5,000 a year.


That's $100 bucks a week out of my pocket.



What do I get for this extra $100 a week?

Nothing, nothing, ****ing nothing, that's what I get. In fact Cain and his ilk are furiously working to slash services and chainsaw any government program which might help me or anybody in my income bracket.


So the billionaires can get more tax breaks.


That's simple enough for me.


Back to the kitchen, Herman. The Kochs need their shoes shined.

 

[User 11148]

I'm confused. In earlier threads, broad support for tax increases on "the rich" was put forth as evidence that an increase was a good idea. Now you're saying that hefty proportions of the populace support things that aren't wise because of "sheer stupidity." Did I miss something?

 

[YankeeFan]

So, Starman's biggest problem with the 9-9-9 plan is that Starman pays more?

And, that's a legitimate objection in his case, but is illegitimate when others make the same case?

Higher taxes on other people = good thing.

Higher taxes on Starman ≠ good thing.

 

[Baron Scicluna]

So, Starman's biggest problem with the 9-9-9 plan is that Starman pays more?

And, that's a legitimate objection in his case, but is illegitimate when others make the same case?

Higher taxes on other people = good thing.

Higher taxes on Starman ≠ good thing.

Depends on how much Starman makes. $5 grand a year out of $50 grand (or whatever he's making) is a much bigger chunk than $5 grand out of $250 grand. The $5K out of $50K goes towards food and housing. The $5K out of $250K goes for hookers and poltical donations.

 

[YankeeFan]

I think I need Baron's help in making out my budget.

I have nothing allocated to hookers or political donations.

 

[Starman]

So, Starman's biggest problem with the 9-9-9 plan is that Starman pays more?

And, that's a legitimate objection in his case, but is illegitimate when others make the same case?

Higher taxes on other people = good thing.

Higher taxes on Starman ≠ good thing.

You got it, bucko.

I'm in the average income bracket.

Cain's dumb**** ****ed-up tax plan would dramatically raise taxes on ME. Me, myself, I. And the large large majority of taxpayers.

Anybody who isn't a billionaire who supports it is a ****ing idiot.

 

[Baron Scicluna]

I think I need Baron's help in making out my budget.

I have nothing allocated to hookers or political donations.

You live a deprived life.

 

[bydesign77]

I was curious, so I pulled up my tax return from last year.

My wife and I grossed $58,223. After deductions, my AGI was $31,305. We had to pay $3,864 in taxes.

On our gross, the rate was 6.64%. On my AGI it was 12.34% So the 9% would fall in between the two.

So for me, on gross, it would increase my liability by 2.36% or $1376. That's $26.46 a week.

Now, the theory behind the 9-9-9, which is similar to the FairTax, is the the lower liability of higher income earners and corporations would result in lower prices, meaning that it my cost of living would decrease.

But, for me, if that means everyone pays an equal percentage of taxes, then I'm OK with the extra $100 a month. But that's just me.

 

[deskslave]

Um, about that: One of those 9s is a 9% national sales tax. So if you think prices are going to be LOWER as a result, you got another think coming, especially if you think that those higher income earners and corporations are actually going to share those savings around.

 

[bydesign77]

I realize that.

But, as long as there isn't further regulation, the lower tax brackets should equal higher competition, meaning lower prices.

It's not perfect, but I think it's a start in the right direction to a lower overall income burden and a higher consumption burden.

 

[Baron Scicluna]

I realize that.

But, as long as there isn't further regulation, the lower tax brackets should equal higher competition, meaning lower prices.

It's not perfect, but I think it's a start in the right direction to a lower overall income burden and a higher consumption burden.

Not if they're all raising prices to meet the 9 percent tax. Things will get more expensive, or stay the same.

Meanwhile, poor people would now be paying an extra 9 percent on food and clothing and utilities. 9 percent that they do not have. The rich people do have the 9 percent.

 

[deskslave]

Given the number of corporations that seem to get away with paying no tax, I can't imagine that a 9% corporate tax rate would lead to a lower tax burden.

Of course, I also can't imagine that anyone would enforce said corporate tax rate. Nor, of course, that Cain's stupid idea would get past step one of the legislative process.

 

[Starman]

Oh and when you bring up the minor detail of, "a 9% national sales tax?!? WTF? My home state already charges a 6% sales tax (insert your own figure as applicable), so I'd be paying 15% sales tax on everything," the 9-9-9 pumpers reflexively respond, "Oh don't worry, part of the plan assumes the states are going to abolish those sales taxes." (Some versions of the plan even say this explicitly.)



Oh really? What states are going to do that? The states that are already fighting with cataclysmic budget deficits? They are going to just give up a huge chunk of their revenue streams?

"Well they will just have to cut their budgets so they can do it," comes the 999 retort.

Ah yes. Cut out all that silly **** like road maintenance, parks, colleges, state police, all that silly worthless **** state governments waste money on. Who needs it. Cut it all out. It'll be a snap. No problem whatsoever.


These ****ers are just ****ing idiots. This isn't high-school economics, this isn't junior-high school economics, this is barely counting-on-your-fingers stuff.



Oh and another little tidbit -- my state's 6% sales tax specifically exempts food items, so as not to be blatantly regressive against the poorest citizens who pay the largest percentage of their total income on foodstuffs to stay alive.

None of the 999 plans I have seen say a word about that. They want the mook making minimum wage and taking home $15,000 a year to pay 9% on a pound of bargain-store hamburger just like the Koch Bros. drowning in billions of cash pay 9% on their filet mignons served on platinum table settings.