Source: The Washington Post
Herman Cain has modified a key part of his tax plan, appearing to concede to criticism that his 9-9-9 plan would unduly punish the poorest Americans. Cain suggested today that poor families would be exempt from the individual 9 percent flat tax that in his plan. “Say amen, y’all. If you are at or below the poverty line…then you don’t pay that middle 9,” he said at a Friday speech in Detroit. “Your plan isn’t 9-9-9, it’s 9-0-9.” But both liberal critics and non-partisan policy analysts say that the changes are unlikely to eliminate the plan’s unequal treatment of rich and poor.
According to the Tax Policy Center, Cain’s “9-0-9”plan would still raise taxes on the poorest Americans—if to a lesser degree —based on his remarks today. “Poor families would see a smaller tax increase than they otherwise would see, but they will still see a tax increase,” says Roberton Williams, senior fellow at the Tax Policy Center, whose widely-cited analysis concluded that Cain’s 9-9-9 plan would raise taxes for 84 percent of Americans and lower them for the richest households. The Tax Policy Center has yet to do a quantitative analysis of Cain’s “9-0-9” adjustment, but policy analysts like Williams come to firm conclusions about its impact. Currently the bottom 20 percent of Americans actually pay a negative tax rate, receiving credits from the federal government, says Williams. So even if poor Americans were to pay zero federal income taxes, they would still experience what is in effect a tax hike.
What’s more, Williams adds, “those folks are still going to be left with a sales tax” under Cain’s plan, which would disproportionately affect the poor who often having to consume most of their income instead of saving it. So even with the “9-0-9” tweaks, “you still have the fact that poor people will bear a higher tax liability, and rich people will bear a much, much lower one,” he concludes.
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