Tuesday, October 18, 2011

Further on 9/9/9

Today the Tax Policy Center released its analysis of Mr. Cain's 9/9/9 proposal.

As analyzed by that group, adoption of the plan would result in lowered after-tax income (due to increased taxes) for all groups making less than $200,000 per year in income.  Taxpayers above $200,000 in income would actually see an increase in their after-tax income, due to lowered taxes.

For example, a household with $20,000 to $30,000 would see their taxes increase and an income drop of over 16%, a household with $40,000 to $50,000 would see an income drop of over 11% and a household with $200,000 to $500,000 would see an income increase of about 5%, all making the tax structure less progressive than it is today.

As noted before, this may be good or bad policy depending on your political and economic viewpoint, but is unlikely to attract the majority of voters in an economy where many people are already struggling.  

Tax the rich may sell politically; tax the poor never does.

The relevant analysis is at http://taxpolicycenter.org/numbers/displayatab.cfm?Docid=3221&DocTypeID=1

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