Wow, Herman Cain is moving on up the GOP “wanna-be” polls and has officially become October’s Media darling with all the catchphrase and witty one liners, he’s the male version of Sarah Palin.
You Betcha’ the Media has Palinized Herman Cain.
So why is Herman Cain rising to the top tier? Three simple reasons
The first reason is simple in that people are tired of the bickering between Romney and Perry. Schoolyard antics are tiresome to constituents of “he said he said,” especially in the last few weeks when two prominent Perry-backers have 1) (Rev Jeffries) attack Romney’s religion as a cult and 2) (Al Baldaraso (NH-R}) applauded those that booed a gay soldier during the FOX debate, giving Romney an opening to attack Perry.
Secondly, Cain has the backing of the Koch Bros.
Thirdly, the Media and constituent misconception of the Herman Cain “9-9-9” plan. On paper, sure it sounds wonderful. Economically, it’s a consumer land mine.
The 1/3 of the “9-9-9” plan sounds understandable, that being adjusting corporate tax to 9% in hopes that all Corporations pay their tax and not lobby for loopholes or other forms of "Tax Holidays." There’s really no need to digest more of this part of the plan becasue with the amount Corporations put into Lobbying Congress, it's a pipe dream.
The Second “9” of slashing Personal Income Tax is a hurdle that won’t happen. Income Tax is all about revenue and slashing revenue will not stop Government from spending what is not there.
Those at higher incomes, the Warren Buffets & Bill Gates of the US live off their investments then their paychecks. So it’s more pocketed then spent, since the wealthier aren’t spending as much as in previous decades.
Now the third “9” is what has people all in a rage, a 9% National sales tax. Once again, it’s the misconception of “fair” as the bottom 25% income bracket spends 90% of their paychecks as the top 1% currently spend around 7% of theirs.
Herman Cain said himself, “Look at it this way, once something has been taxed it cannot be taxed again, so it will be easier for someone to buy a used car or used clothes.” That’s true as I’ve blogged prior, Used Car sales have been steadily rising as people find Used Car Lots more accepting then the traditional car dealership.
Simple thought is that New Car sales will continue to drop under the Cain plan, more than presently due to Banks giving out fewer loans.
But there is another thought to Cain’s Nat’l Sales Tax I have yet to read by any so-called expert, something of which I am not but looked into.
No one is talking about how the States will react to such a deal and how current State Sales tax is added into the Nat’l Sales tax proposal.
Cain’s idea of a “9% National Sales Tax” is only fair in term only. Many people believe that’s all they’ll pay, yet they forget that their State & Locality Sales tax will still be accounted for. And don’t think that States and/or Locality will jump at the chance to increase their Sales tax as well.
For example; In Alabama, the current State sales tax is around 4%, but depending upon which city or county you are in, that 4% can rise as high as 12%. So with Cain’s NST, one will pay 21% in total Sales tax on item.
Now in a State such as Alaska which does not have a State sales tax, it’s the municipality (all 62 of them) that imposes a 7% sales tax on item. So with Cain’s NST, one would pay 16% in total Sales tax.
But State sales taxes aren’t that straight forward.
Arkansas’ State sales tax sits at 6%, with an additional 2% for food sales tax, plus an additional 6.5% for locality and that’s a possible 14.5%. Then add in Cain’s NST and the consumer is paying 23.5% total Sales tax.
In the President’s adoptive State of Illinois, there is a State tax of 6.25%, plus certain foods & prescription drugs can add an additional 1% Sales tax. Yet, depending on the Locality would determine another Sales tax which can be as high as 11.5% and all of a sudden you’re paying close to 27% on item.
I’m not going go through the Sales Tax of each State and their localities, however the point being there’s more to Herman Cain’s 9% National Sales Tax then the experts and constituents are thinking about.
It’s easier to be more poor then wealthy in today’s economy, yet it’s ones perception of “wealth” that must be determined. I don’t believe someone making $100K is wealthy, but someone making $1Mil is well off.
What Cain’s NST will affect is those living on fixed incomes, such as Grandma & Grandpa, working college students, the working single parent and so on. Contrary to many beliefs, these groups still pay taxes in one form or another, it’s the Federal income tax they do not.
If you look at South Carolina’s state tax of 6%, plus an additional 1-2% for locality, well that sounds pretty sweet. However I was shocked when I read that Seniors 85 years of age or older pay an additional 5% in Sales tax. The largest group of fixed income Americans living today has to pay more in tax due to age! So with Cain’s NST, that’s 21% a Senior citizen would have to pay Sales tax on item.
It always amazes me how people react to words spoken by someone they love/hate. Take for instance the Payroll tax. Currently employees are paying 2% less in Social Security tax (4.2%) while their employer still pays the normal 6.2%. By the January 2012, unless Congress actually does their job, employees will return to 6.2% tax. That’s a 2% increase; no matter how you look at it, but how many Americans actually saw that 2% increase in their paycheck?
Now, depending on who is speaking, Republicans make it sound like a return to normalcy by letting the payroll tax return. Yet, the Democratic rebuttal floats like a lead balloon.
Now when President Obama talks about ending the Bush Tax Cuts (or are they the Obama tax cuts now?) and a return to Clinton era numbers, Republicans shout “that’s a tax increase,” yet in reality it’s a return to normalcy. But the majority of Americans see it as an increase.
An increase is an increase; there is nothing normal about our federal government.
Until Herman Cain actually divulges the entire “9-9-9” plan with Economic mathematics, everything about the plan is speculation. One thing that is not speculation will be how it affects the American consumer and who spends the most of their paycheck.
We are a Consumer Nation, if someone wants to do something, then let’s have a Consumer Tax Holiday between Thanksgiving and Christmas, then we’ll see consumption grow.
However, if I go by Cain’s earlier statement, well then look for “Big Poppa’s Used Consumer Goods” store in your city under a Herman Cain presidency, I won’t be able to tax you but I can manipulate the price.
**correction: South Carolina state tax for Seniors is listed incorrectly. Seniors 85 or older pay 5% sales tax, not an additional 5% as listed in the article. My apologies, as I was ranting as I was blogging**