As we’ve been reporting, GOP 2012 presidential candidate Herman Cain’s “999” tax plan — which would eliminate all taxes in favor of a 9 percent income tax, 9 percent corporate income tax, and 9 percent national sales tax — would wallop low-income Americans (all of the candidate’s protestations notwithstanding). On average, the lowest-income Americans would see their tax rate multiplies nine times, from about 2 percent to about 18 percent, under Cain’s plan.
But according to Rich Lowrie, the Wells Fargo wealth manager who helped Cain craft the plan, it’s just “Washington thinking” to try and deduce how hard Cain’s plan will hammer those who can least afford it:
Lowrie says it’s just “Washington thinking” to look at whether modest-income Americans will wind up shouldering much more of the tax burden. He repeatedly refused to say how much more of the tax burden would be borne by the poor and middle class than under the current system. But he implicitly acknowledged the problem by saying that the campaign would “fix this” with a new empowerment-zone plan that would be laid on top of the 9-9-9 plan and would presumably lower taxes in inner cities.
Cain’s sales tax would be levied on just about everything, including food and housing (which have traditionally been exempted from sales taxes), pounding low-income Americans, who spend nearly all of what they earn in a given year on necessities. At the same time, Cain would eliminate investment taxes which, along with lowering the income tax rate all the way down to nine percent, would result in a massive tax windfall for the wealthy.
As Center for American Progress Vice President for Economic Policy Michael Ettlinger put it, the plan “would be the biggest tax shift from the wealthy to the middle-class in the history of taxation, ever, anywhere, and it would bankrupt the country.” But Lowrie “acknowledged that Cain didn’t care about progressivity,” which perhaps explains why he is so nonchalant about a plan that would unabashedly give poor Americans the short end of the stick.