Rob Port
Say Anything
10/13/2011
There are some good questions to be asked about Herman Cain’s 9-9-9 plan. For instance, what part of the Constitution gives the federal government the right to tax sales transactions which take place within the borders of one state? Conservatives are against that sort of stretching of the interstate commerce clause.
But today ABC News claims that Cain’s plan would drastically increase federal taxation on a household with the national average income level. Except they did the calculation wrong…
…The problem with this analysis is that the author apparently doesn’t understand how the child tax credit works. It’s a reduction in taxable income, not a reduction in taxes paid. Losing the tax credit doesn’t mean Americans will pay $4,000 more in taxes. It means their taxable income will go up by $4,000.
Under Cain’s plan income would be taxed at a flat rate of 9%, meaning this $4,000 increase in taxable income would be a $360 increase in taxes paid.
The reduction in Social Security taxes means $4,000 back in our pockets. The elimination of the child tax credit means a roughly $360 in taxes paid.
Add all that up, and Cain’s plan would reduce the federal tax burden of the average middle-class home by about $500, not increase it by thousands as ABC is claiming…
Read the entire article at Say Anything.
