Lions and Eagles

Big businesses are just going to take unfair advantage of the new tax code. How do we know Warren Buffet and Wall Street won't just cheat the new system? There will always be people who are trying to game the system. But trying to cheat the system right now is like trying to cheat at a game of Monopoly with real $5000 dollar bills: The stakes are high, and the game is complicated enough that a clever player just might get away with it. Switch to the 9-9-9 plan, and you've lowered the stakes, and made the rules as simple as tic-tac-toe. Sure, you just know someone is going to try to cheat, but it's harder to see how they'll get away with it. You just want to help the rich, and step on the poor. Cut that out, we're trying to have a reasonable conversation here. Nobody sane wants a tax code that helps the rich at the expense of the poor. But that doesn't mean that the only other choice is a system that punishes success. Let's have a simple tax code with a ...

Since I wrote my first article , I've had some questions and concerns posed to me about my example. I like questions and concerns! It gives me a reason to do more writing! My friend John wrote to me: Another problem lies in the sales tax structures of the various states. An erroneous assumption in your calculations is that Georgia does not charge state sales tax on groceries. Only local sales taxes are charged on groceries and I believe pharmaceuticals. Florida has no sales tax charged whatsoever on groceries or prescription drugs. Varying state tax structures, to me, infinitely complicate the whole picture of whether 999 is good or bad when integrated into the existing taxes that will not go away. Here's the good news: Unlike Obamacare, we don't have to pass this bill to know what's in it. We can research, we can calculate, and we can prove whether this undertaking is really complicated beyond measure. My first task will be to research existing sales tax struc...

But aren't all sales taxes regressive?   Funny, I never hear anyone bring this one up when the state or local governments are trying to get us to approve the SPLOST, or penny sales taxes, or any of those other "temporary but somehow never dying" sales taxes to pay for all of those local projects they love. When politicians want to put a new sales tax on us, the word "regressive" is never heard. It's only when someone proposes getting rid of a complicated income tax system that no one likes anyway that this word even comes up. Anyway, I want to be careful with this topic. "Regressive" is a politically-charged word. Let's make sure we establish what it means, first. According to Investopedia , a regressive tax is "a tax that takes a larger percentage from low-income people than high-income people". It may be just me, but that doesn't sound like a very precise definition. A larger percentage of what? Does this mean that, in a...

Test 2: But what about that 9% income tax? Won't that hurt poor people who aren't paying income tax now? One concern raised is that the flat 9% income tax will hurt people who aren't taxed right now. Let's try those numbers out, again keeping the assumptions of the tax calculator intact. Let's take a household of 4 (same as mine), earning and spending at the poverty level. That is, every dollar they earn in a year, they have to spend. Just to make it worst-case-scenario, let's say that everything they buy is new, so everything they buy is taxed. Most sensible families at the real poverty level are buying used wherever they can, which means the tax doesn't touch everything they buy, but let's take this worst case just for the sake of argument. The latest data I have says that in 2005, this family would have earned (and spent) $25,660. Let's say that this family lives in a state with 0% sales tax, just to keep that part of the math simple. Finally,...

By now, most everyone's heard about Herman Cain's 999 Tax Plan. Some love it, some love to bash it. But who can you trust? It seems everyone's got something to gain. A lot of the negative statements about it have come from other candidates who see it as a great target, or from tax lobbying institutes who depend on the complication of the existing system to justify their existence. But then, even though I like Cain, I don't want to risk trusting his math blindly, without checking it out myself. I mean, sure, he's got a degree in math, another in computer science, and he used to calculate rocket trajectories for the Navy, but he could be wrong this time, right? So, here's a little experiment. I ran across a 999 Tax Calculator  web site, not affiliated with or funded by the Cain Campaign, which lets you plug in numbers and see the effect of the new tax plan on prices. The best part is, you can see the calculations and check them for yourself. Will the poor pay mo...