ThinkProgress filed this report from the Values Voters Summit in Washington, DC
Former pizza magnate Herman Cain has surged into the top tier of Republican presidential candidates, firing up crowds with news of his “999” tax plan that would lower income and corporate tax rates to 9 percent while levying a 9 percent sales tax on all purchased goods. At the Values Voters Summit in Washington this weekend, attendees were so excited about Cain’s plan that he didn’t even have time to finish saying its name before a raucous audience finished it for him.
But perhaps the crowds would not be so enthusiastic if they knew Cain’s plan would explode the federal deficit to levels unseen since World War II, or if they knew it contained a massive tax increase on the poor. Center for American Progress Director of Tax and Budget Policy Michael Linden detailed both of those results in a study of Cain’s plan, and ThinkProgress asked Cain about that study after his speech at VVS. Claims that “999” would raise taxes on the poor, Cain said, were “erroneous,” and those who make the claims don’t have evidence to back them up:
WALDRON: Could you explain [the CAP study] that says your plan would increase taxes on the poorest Americans?
CAIN: That’s not true. This is what I’m saying. People make these claims. Did they give you any examples? No. I can give you examples that show it doesn’t. So the next time you hear these erroneous attacks, ask for numbers, and I bet they can’t, they can’t present them.
Linden’s study, however, does provide numbers. The poor currently pay roughly 2 percent of their income in taxes and are largely exempt from income taxes because they don’t make enough to qualify for even the lowest tax bracket. But under Cain’s plan, the average low-income American would pay 18 percent of his or her income in taxes — 9 percent on every dollar earned, and 9 percent on every dollar spent. A national sales tax rate like Cain’s primarily affects the poor, who spend all or nearly all of their yearly income.
Sunday, Cain himself provided a specific example of what this increase would look like, telling CNN’s Candy Crowley that food would not be tax-exempt under the plan. Only two states — Mississippi and Alabama — charge full sales taxes on food, and the resulting tax hike on the poor is so obvious that even Tea Party groups assumed Cain’s plan would exempt food from its 9 percent sales tax. But Cain dismissed that yesterday, all but proving that he stood pat with the Republican Party’s desire to force the poor to shoulder the cost of massive tax breaks for the wealthiest Americans.