Herman Cain Wants to Raise Your Taxes

Dean Clancy, vice president of FreedomWorks notes that there are some glaring problems that could lay the precendent for bad tax policy in the future:

 “it adds a new tax — a national sales tax — on top of the income tax. “

“The second problem with Cain’s plan is more serious. The plan puts in place the infrastructure for a VAT — a Value Added Tax. That’s bad. Very bad.”

“A VAT is a form of national sales tax that is collected at every stage of the process from the initial gathering of raw materials to the final sale to the end consumer. It is the most insidious of all taxes, because it is built into the price of everything and consumers can’t see how much of the price is due to the tax. So when prices rise due to a tax hike, consumers assume it’s just prices rising due to market forces. Politicians love this about a VAT. They can take more money out of our wallets than with other, more transparent forms of taxation. Taxpayers should hate it for the very same reason.

European countries have much higher overall tax takes than does the United States. Why? Because the Europeans all have VATs, and we do not. Total receipts of the US Government since World War II have averaged about 18 percent of GDP and have never exceeded 20.9 percent (the peak, in 1944). By comparison, the “Big Six” European countries’ total receipts since the early 1970s when VATs became ubiquitous have not been less than 30 percent of GDP and today average a little over 40 percent! Twice as high as in the US.

Well, you say, Cain’s national sales tax isn’t a VAT. Okay, that’s true. But guess what? Europe’s first VATs all started out life as national sales taxes. Sales taxes are relatively easy to evade. VATs are much harder to evade. So sales taxes have a habit of evolving into VATs. That’s what happened in Europe. And it’s what will happen here, if we adopt Cain’s sales tax.”

Dean Clancy obviously understands how the value added tax (VAT) works.  His statement is supported by this quote from Wikipedia: “throughout the world, VAT has been gaining favour over traditional sales taxes. In principle, VAT applies to all provisions of goods and services. VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government.”

A flat rate income tax is fair but a flat rate national sales tax is a tax on the poor who would in many cases have to pay a national and state sales tax with Herman Cain’s proposed plan.  A person making $100 dollars a week should not pay the same amount in taxes as a person money making $1000 a week.  Herman Cain is trying to parade his 666… I mean 999 tax plan as lower taxes for the American people in front of the media when in fact our taxes will be higher and businesses will suffer when consumers cut down on spending to avoid a national sales tax.  Herman Cain seems to have a lack of empathy for the poor.  The following is a Herman Cain quote as only he can get away with saying (because he is black): “if you don't have a job and you are not rich, blame yourself!" 


I wrote another post not to long ago on how ridiculous this tax plan is.  The media seriously needs to read this and stop worshiping every word that comes out of this man's mouth.

Sources:

http://www.unitedliberty.org/articles/8891-another-conservative-criticism-of-herman-cains-9-9-9-plan

Please donate to my grassroots page (any amount will help).