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Herman Cain’s 9-9-9 Plan Is Very Regressive

By Matthew Yglesias on October 18, 2011 at 5:31 pm

"Herman Cain’s 9-9-9 Plan Is Very Regressive"

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One thing that happens when a longshot candidate skyrockets in the polls is his policy proposals start getting more scrutiny. The Tax Policy Center, for example, has a new analysis out of the distributive consequences of Herman Cain’s 9-9-9 tax plan. The Tax Policy Center models 9-9-9 as catchy new slogan for a de facto national consumption tax*, and consequently constitutes a tax increase on most Americans but a tax cut for high income people who engage in a lot of savings and investment. I converted their table into two charts:

As you can see, you actually need two charts to illustrate this properly because the magnitude of the tax change for the highest income segments is very large. But basically you’re talking about a nice tax cut for the $200k-$500k crowd and a really big tax cut for people who earn more than that, plus mid-sized tax hikes for everyone else.

* I should note that CAP’s tax guy doesn’t like the way TPC models this, since their analysis really only works in the infinite horizon. The short-term distributional consequences would be even more regressive.

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