Next time you want to make an animated movie to speed us quickly through some complicated ideas:
You might consider hiring someone who’s actually visually clever, like the folks behind the Tale of the Three Brothers:
Or the introduction to Hellboy 2:
That, or having a narrative that actually holds up under scrutiny and has a direct relationship to real American problems. Those tend to pan out better in the long term than Sim City ripoffs and Pokemon soundtracks.
GOP presidential candidate Herman Cain has been in hot water in recent weeks over allegations that he sexually harassed or assaulted at least four women in his employ. But it’s not just Cain’s personal behavior that’s hurting women. According to analysis and expert interviews by the American Independent, the tax plans offered by both Cain and Gov. Rick Perry (R-TX) disproportionately disadvantage women:
Thus far, only Cain and Perry have revealed the most detailed plans, and because women are disproportionately likely to be single parents and to have lower wages, smaller pensions and more medical problems, they are expected to fare worse under these plans than their male counterparts. [...]
Cain’s plan would eliminate the Earned Income Tax Credit (EITC), which is a refundable credit designed to offset federal payroll and income taxes for low- and moderate-income working people…[F]amilies mostly use this tax credit to pay for necessities, home and vehicle repairs and, sometimes, additional education. Cain would also kill the Child Tax Credit (CTC), which helps working families pay for child care costs. [...]
[B]ecause Perry would eliminate the EITC, lower- and middle-income earners would still pay more under his plan than they do now…To pay for the plan, Perry has suggested cuts in education and nutritional programs for poor children.
As ThinkProgress has reported, Cain’s 999 plan is horribly regressive, hiking taxes on lower- and middle class Americans to pay for massive tax cuts for the rich. According to experts, Cain’s plan would affect women worse than the other candidates’ proposals because of its drastic tax hikes on the poor. The American Independent points out that under 999, millionaires would have a 17.9 percent tax rate while a single mother earning between $20,000 and $30,000 would pay a 24.9 percent tax rate.
Terry O’Neill, president of the National Organization for Women, described Cain’s plan as “punishing women who sometimes work two jobs full-time, minimum-wage jobs, just to pay for food and rent.” Joan Entmacher of the National Women’s Law Center added that “the Perry plan is particularly hard on single heads of households. They do worse than the working poor.”
As former pizza magnate Herman Cain has risen to the top of Republican presidential primary polls, his “999″ tax plan has faced increasing scrutiny from Republicans, Democrats, and the media alike. Cain’s plan, in effect, would explode federal deficits while raising taxes on the poor, forcing America’s lowest income-earners to shoulder the cost of huge tax breaks for the rich.
Cain’s plan ends several of the current taxes that help fund federal government programs, including the payroll tax that finances Social Security — one of the most popular government programs there is. That would seem like a political loser, given that Americans of all political stripes oppose cuts to the program. But Sunday, Steve Forbes, a former presidential candidate and long-time proponent of the flat tax, praised Cain’s 999 plan specifically for not funding Social Security and Medicare in an editorial published in the New York Post:
The Cain plan would rid us of not only the federal income tax, but also the Social Security and Medicare payroll taxes.
For someone like Forbes, whose net worth is upwards of $430 million, Social Security and Medicare might not be a necessity. For elderly Americans with much less money, however, the programs are vital. Social Security kept 14 million seniors out of poverty in 2010, after many lost most or all of their retirement savings in the 2008 financial crisis. Since it passed in 1965, meanwhile, Medicare has increased the number of seniors with health coverage, improved life expectancy rates, and reduced poverty among the elderly.
As Congress and presidential candidates have focused on spending cuts over the last two years, Americans continue to opposecuts to both Social Security and Medicare. Apparently, though, ensuring that those programs can’t be funded is something to be celebrated in the Republican presidential primary.
Former pizza magnate and 2012 GOP presidential candidate Herman Cain, when asked about the multiple analyses showing that his 999 tax plan would hammer the poor, simply asserts that those numbers are wrong, alluding to his campaign’s own analysis of the plan (which does not actually include a distributional breakdown). When the heat on Cain got even more intense, he explained that he has a secret plan to protect low-income Americans from 999, but he just hadn’t told anybody about it. “We’ve already made provisions for that, but I just haven’t told the public and my opponents about it yet,” he said on Wednesday.
Today, finally, Cain released the latest tweak of his plan — the creation of what he calls “opportunity zones.” According to Cain, these will be special zones placed in inner cities, and those who work or live in the zones will receive deductions from 999 (which otherwise wipes out all of the traditional tax deductions, including the Earned Income Tax credit, child deduction and the mortgage interest deduction). Evidently believing that all economic analysts are also mind readers, Cain said today that those who criticized his plan simply didn’t read it:
Now, the opportunity zone feature has been in our analysis all along. But just like I accused some of my opponents the other night of not having read the plan, we now have proof they didn’t read it. If their staffs had done the proper job and read it all the way through, they would have discovered what I’m about to share with you.
Two days after admitting that this facet of his plan was secret, Cain now claims that those criticizing his plan “didn’t read it.” In Cain’s original 999 document there is indeed one line saying, “features a platform to launch properly structured Empowerment Zones to renew our inner cities.” Shockingly enough, independent analysts didn’t work out that this meant a bunch of specific business deductions.
Cain hopes to encourage growth in impoverished areas by further lowering the tax burden of residents. But for a jurisdiction to qualify, it would have to adopt a number of conservative policies that may seem unpalatable to liberals, including eliminating the minimum wage, instituting school vouchers, and declaring the area “right-to-work” – or non-union.
Cain, quite literally, only grants deductions to those who are willing to move into these inner city zones where his tax breaks magically apply, and in exchange they have to forego basic economic protections. Everyone else is out of luck.
Cain also laid out his supposed plan to protect low-income Americans from getting slammed by his trio of taxes, saying that those beneath the poverty line would be exempt from his nine percent personal income tax. Leaving aside that he’s still walloping families who are barely above the poverty line with a huge tax increase, those below the poverty line will still be stuck paying a nine percent sales tax, when their current tax rate is closer to 2 percent, if they have federal income tax liability at all.
Finally, Cain claims that the plan would be revenue neutral, and his analysis does indeed show revenue neutrality (if you trust the numbers). However, his analysis clearly states, “We assume no exemptions, deductions or credits” (except for a passing mention of poverty exemptions), whilst Cain laid out a whole host of opportunity zone deductions today. So is 999 now going to create deficits or will he have to morph it into 12-12-12 or 15-15-15 in order to make his numbers add up?
ThinkProgress filed this report from the Western Republican Leadership Conference in Las Vegas, Nevada.
The centerpiece of Herman Cain’s economic agenda, the 999 Plan, has vaulted the former pizza executive to the top of the Republican presidential field. Multipleindependentanalyses of the plan, however, have shown that it will significantly increase taxes on the poor and middle class – 84 percent of households, according to the Tax Policy Center — while giving humongous tax breaks to the wealthiest one percent.
Cain, hammered by economists, budget wonks, and even his Republican opponents for the proposing such a regressive tax plan, told the Western Republican Leadership Conference on Wednesday that his campaign had come up with a “fix” to make 999 more equitable, but he “just [hasn't] told the public and my opponents about it yet.”
CAIN: The other thing that they try to say – “well it’s going to be regressive on the poor.” No it’s not. We anticipated that attack, but I didn’t tell them how I was going to fix it yet. I wanted to wait until I get attacked on that for a while. We already have a plan for that. But I wanted to see if they would come at that. They thought it was going to be dead in the water. We are a compassionate nation. We do want to help those that are doing all they can to help themselves, but they might need a little bit of help. So we’re not going to throw the people at the poverty level under the bus. No, we’re not going to do that. But we’ve already made provisions for that, but I just haven’t told the public and my opponents about it yet.
As it stands currently, Cain’s 999 plan is extraordinarily regressive, resulting in tax increases for everyone making less than $200,000. Millionaires would be far-and-away the biggest beneficiaries under Cain’s plan. And Cain’s remarks Wednesday did little to combat the impression that his campaign is simply making up the plan’s details as they go along. In fact, he openly admitted that 999 was being modified in the face of persistent criticisms.
Cain’s decision to keep the “fix” a secret for the time being is becoming a recurring theme for his campaign. Cain has repeatedly discussed consulting advisors on various issues, but would not reveal their identities. Many of his staffers’ names have been kept secret. He said he has already identified two people who he could nominate to head the Federal Reserve, but can’t say who they are. And in a move reminiscent of Richard Nixon’s secret plan to end the Vietnam War, even Cain’s energy plan has been kept under wraps because he “doesn’t want to tip anybody off.”
Given the inherently regressive nature of Cain’s tax proposal, nothing short of a massive “fix” would prevent the 999 plan from, in the former pizza executive’s words, “throw[ing] the people at the poverty level under the bus.”
The Tax Policy Center adds that “a taxpayer in the top 0.1% (who makes more than $2.7 million) would enjoy an average tax cut of nearly $1.4 million, increasing his after-tax income by nearly 27 percent” under Cain’s plan.
Billionaire investor Warren Buffett’s push for increasing taxes on the very wealthiest Americans — who, due to the preferential tax treatment of investment income, often pay lower taxes than those in the middle-class — led to the creation of the Obama administration’s “Buffett rule.” The rule is aimed at ensuring that millionaires can’t use special treatment in the tax code to drive their tax rates down below that of their employees.
Republicans have met the Buffett rule with universal derision, calling it “class warfare.” “If it’s not class warfare, it’s highway robbery,” said 2012 GOP presidential candidate Herman Cain. “Pick my pockets, because that’s what he’s doing!” As it turns out, Cain’s much-touted 999 tax plan would basically do the opposite of the Buffett rule, driving Buffett’s already low tax rate down to new depths:
If the “9-9-9″ tax plan promoted by Herman Cain, a leading Republican presidential candidate, had been the law of the land last year, Warren Buffett would very likely have paid no income taxes, according to an analysis prepared for Yahoo News and The Lookout by the American Institute of Certified Public Accountants. At most, Buffett would have paid taxes on just 1 percent of his income.
As Yahoo’s Zachary Roth wrote, “if Buffett thinks he’s getting off easy under the current tax system, he should try life under Cain’s plan. Then he’d really be complaining.” Under 999, Buffett’s taxable income would come to $4.9 million of the $62 million he earned last year. After accounting for charitable deductions — which is one of the few tax preferences Cain says he would preserve — “Buffett would have paid no income taxes at all last year under the plan.”
However, low- and middle-income Americans would pay much more under the 999 plan than they do currently. They will be hammered by Cain’s nine percent sales tax (which Buffett would also pay, though at nowhere near the effective rate of poor Americans, who spend almost all of their income in a given year), while also paying a nine percent income tax.
Cain finally admitted this weekend that “there are some” people who will pay more in taxes under his 999 plan. However, he has yet to fess up to the fact that his plan entails a humongous tax cut for the very wealthiest Americans.
2012 GOP presidential hopeful Herman Cain has risen in the polls recently, and his 999 tax plan was the star of the GOP primary debate last week (with the number nine warranting 85 different mentions). But more and more analysts are pointing out that the plan entails a big tax increase on low- and middle-income Americans, while it would cut taxes for the wealthiest Americans.
Cain has vehemently protested that his plan would raise taxes on the poorest Americans (in part by saying they will just shift their consumption to used goods, which are exempted from his proposed nine percent sales tax). But today, Cain finally admitted to NBC’s David Gregory that some Americans would, in fact, pay more in taxes under his plan due to the sales tax. But Cain think those people will demand that 999 get implemented anyway:
CAIN: There is a huge amount of public support for 999. Just talk to anybody. This is what’s going to help us get it passed. The public support.
GREGORY: I just want to break that down. So you’re acknowledging this morning, which I haven’t heard you do before, that there are individuals who are going to pay more in taxes.
CAIN: There are some, yes.
GREGORY: And you think those people are going to rally around tax reform where the wealthy pay less and middle-class and lower-income folks pay more.
As we’ve noted, because low-income Americans spend almost all of what they earn, while the wealthy do not (and earn a significant amount of their money from investments, the income from which goes untaxed entirely under 999), Cain’s plan will be a massive shift in the tax burden down the income scale. Of course, as Cain has explained, the poor could always just buy used food in order to lower their tax rate. And evidently he believes Americans will be so overjoyed at the prospect of higher taxes that they will flood the streets to demand them.
Herman Cain economic adviser Rich Lowrie — who helped the presidential candidate write his “999″ economic plan despite having no formal training in economics — appeared on Fox News today where he made some pretty optimistic promises about Cain’s tax scheme:
LOWRIE: What will happen, economically, is that the economy will expand by two trillion dollars. Six million jobs are going to be created, bringing the unemployment rate back down to a more typical or natural rate of four, four and a half percent. Wages are going to go up by 10 percent. Business investment will go up by a third.
Lowrie — who is an investment adviser at Wells Fargo, not a macroeconomist — offers nothing to back up these rosy assertions, which sound almost too good to be true. The unemployment rate has dropped to levels Lowrie promises just a handful of times in last 100 years, and only during the most robust periods of economic growth. Moreover, wages for most Americans have fallen or stagnated in recent years, making his claim of 10 percent increases sound idealistic at best and naive at worst.
Our guest blogger is Michael Linden, Director of Tax and Budget Policy at the Center for American Progress Action Fund.
Herman Cain’s 999 plan was the star of the GOP’s primary debate this week, and with the increased attention has come increased scrutiny. Cain has been slow to let the details of his plan dribble out, but in an attempt to back up his claims that the plan is revenue-neutral and notregressive, his campaign finally revealed some specifics yesterday. With those new details, here is an updated analysis, with the three main things you need to know about 999:
1) 999 Will Raise Taxes On Middle- And Low-Income Americans, By A Lot:
Cain’s tax plan consists of three different 9 percent taxes — one on wage income (investment income is exempt), one on sales of goods and services (including food, housing, and medicine), and one on business income (investments and purchases from other businesses are deductible; wages, however, are not). But most Americans will end up paying all three of those taxes, for a combined tax rate of 27 percent of their income.
That’s because middle and low-income Americans get all, or nearly all, of their income from ordinary wages — all of which would be subject to Cain’s 9 percent wage tax — and then they spend all of their income, which means it would be taxed again by the 9 percent sales tax. Finally, the burden of the 9 percent business income tax would be passed on to them as well, either in the form of lower wages — since wages are not deductible — or in the form of higher prices for goods and services.
The bottom line is that most Americans will pay all three of Cain’s taxes, making their real federal tax rate 27 percent. Compare that to the current tax code, under which someone in the bottom quintile pays two percent of their income in federal taxes and someone in the middle quintile pays 15 percent. The fact is that pretty much everyone making up to around $100,000 a year would pay more under Cain’s plan than they do now.
2) 999 Will Give The Rich A HUGE Tax Cut:
Because the 999 plan will operate, in practice, as a 9 percent tax on wages, and an 18 percent tax on goods and services, only a fraction of a wealthy household’s income will end up subject to these taxes. That’s because wealthy people get a lot of their income from capital gains — which are exempt from the wage tax — and they don’t spend all of their income, so anything they save won’t be subject to taxes either.
Today, someone in the richest 1 percent typically pays about 30 percent of his or her income in federal taxes. Since people at the top of the income ladder make about half of their income from capital gains, and only spend about half of their income in a given year, their tax rate would drop all the way down to 13.5 percent. That’s even lower than what middle-income people pay today.
3) 999 Would Cause Massive Deficits, Enormous Amounts Of New Debt:
Despite the Cain campaign’s claims to the contrary, 999 would not raise nearly enough revenue to close the budget deficit. In an earlier analysis that mistakenly assumed his 9 percent business tax would operate like our current corporate income tax, we underestimated how much revenue it would raise. But even accounting for the new specifics, the 999 plan would still only generate around 14 percent of GDP in revenue. That’s even less than we are collecting now, when revenue levels are at historic lows. Even if Cain adopted all of the draconian spending cuts contained in the House Republican Budget, 14 percent of GDP in revenue would still result in $11.5 trillion in added debt from 2013 through 2021.
Hopefully Cain will spend a few minutes giving this analysis a read, since he has “no idea” how his plan would actually work.