Now that Cain leads in both Southern States (S.C. and Fl.) it is time to read his website – where we find the 9-9-9 personal income tax that ignores investment income/ plus corporate tax that ignores earnings from overseas/ plus a national sales tax on food/everything is – but we also find that 9-9-9 a stepping stone to world of no income tax (personal or corporate) – the world of the “Fair Tax” – the Federal Government funded in the main by a national sales tax.

Now the far-right swears by sales tax funded government as a sales tax minimizes the tax on the rich as it shifts the prior burden on the rich to the poor and middle class. The Fair Tax is a straightforward tax on consumption that spares savings from any taxation, making some economists assert it is “efficient and growth producing”. The Fair Tax seems in my memory to have been introduced as legislation in Congress every year since the late 1990’s (with 66 co-sponsors in the House including one Democrat on the current bill and eight co-sponsors in the Senate).

While 9-9-9 has folks noting that it would raise the tax burden on the lowest-earning workers while cutting the burden on the highest earners, if passed the move to the Fair Tax – sales tax only – will be sold as not being as harsh on the poor as 9-9-9. Heck, once we stop taxing investment income we have effectively stopped taxing most of the income of the rich, especially in the case of the “idle rich”, who live off their wealth. The argument for the move from 9-9-9 to the sales tax only “Fair Tax” is that the sales tax hit to the consumption of the rich, even after the rich move their purchases off-shore as they did with Clinton’s luxury sales tax of 1994, would be made much larger by going from the 9% sales tax of 9-9-9 to the 40% sales tax (they claim 30% but that doesn’t produce enough tax) that is the Fair Tax.

Cain will be able to put before the media conservative economists like Nobel laureate Vernon L. Smith and former Federal Reserve Governor Wayne Angell to sell his sales tax. And a Mr. Linbeck has a group, Americans for Fair Taxation, that pushes the Fair Tax.

And there is already a minor “compassionate conservative fix” to the Fair Tax massive screwing of the poor and middle class – a proposal for flat guaranteed income check that is paid at the start of the year to partially offset the sales tax you will pay during the year – with Boston University’s conservative economist Laurence J. Kotlikoff getting media attention as he explains how the “prebate,” which Kotlikoff calls a “demogrant”, makes things fairer. Americans for Fair Taxation seems to feel the prebate eliminates the excessive regressive nature of 9-9-9.

We can not tell if Cain wants only a pure sales tax “Fair Tax” or one with a prebate – but there is no prebate in 9-9-9. The right is sucking in the Democratic Blue Dogs via the prebate and perhaps other Kotlikoff ideas like including in the sales tax/Fair Tax an application of the tax to the consumption of the “benefits” that homeowners get from living in their own homes (homeowners being richer than renters whose rent would be taxed), applying the Fair Tax to ones consumption abroad (how is this reported and paid?), and applying it somehow to what you inherit, coupled with a payroll tax that exempts the first $40,000 of income and has no ceiling. The rich really, really want this change to a sales tax world if they are sending signals of an acceptance of a small “payroll” tax as long as it excludes investment income.

Because high sales taxes can lead to barter and underground economy tax evasion, some (but not Kotlikoff who does not see tax evasion developing) want the “Fair Tax” to be implemented as a valued added tax (VAT), as the rich have managed to impose in over a 100 countries. A value added tax is effectively a sales tax (Fair Tax) of say 40% (proponents say only 30% but current budget would need around 50% so I use 40% to anticipate a smaller budget) on the final sales price of all things consumed, but is collected at each stage in the making of the product with a credit for the tax already paid on the items used in the making of the product by the merchant owning that stage – hence it is a tax on the “value added” at each stage.

If you watched the long Cain interview on CNN with the powder puff questions on 9-9-9, you saw none of the above and might have concluded that corporate media is trying to sell his tax plan. Well, that at least was my conclusion also.

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