Businessman Herman Cain, one of the front runners for the Republican nomination for President of the United States, has a simple formula for success. He wants to reform the country’s complex taxation system by replacing it with what he calls his 9-9-9 plan.

The 9-9-9 Plan, he argues, gets Washington D.C. out of the business of picking winners and losers, using the tax code to dole out favors, and dividing the country with class warfare. It is fair, simple, transparent and efficient. It taxes everything once and nothing twice. It taxes the broadest possible base at the lowest possible rates. It is neutral with respect to savings and consumption,capital and labor, imports and exports and whether companies pay dividends or retain earnings.

9% Business Flat Tax

Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports.

Empowerment Zones will offer deductions for the payroll of those employed in the zone

9% Individual Flat Tax.

Gross income less charitable deductions.

Empowerment Zones will offer additional deductions for those living and/or working in the zone.

9% National Sales Tax.

Unlike a state sales tax, which is an add-on tax that increases the price of goods and services, this is a replacement tax. It replaces taxes that are already embedded in selling prices. By replacing higher marginal rates in the production process with lower marginal rates, marginal production costs actually decline, which will lead to prices being the same or lower, not higher.

And who would be the biggest beneficiaries from this new and simplified approach? Well the US Tax Policy Center did the calculations and came up with this rather unsettling graph:

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