I would have to say that the 999 plan isn’t a jobs plan, it is a tax plan. And I would say that from my experience being in Congress, but also as a federal tax lawyer, when you — the last thing you would do is give Congress another pipeline of a revenue stream. And this gives Congress a pipeline in a sales tax.
A sales tax can also lead to value-added tax. The United States Congress put into place the Spanish-American War tax in 1888. We only partially repealed that in 2006. So once you get a new revenue stream, you are never going to get rid of it.
And the folks at FreedomWorks are knocking it around pretty good, too, particularly the sales tax component:
Now, ask yourself: If you could be relieved of paying income and payroll taxes, would you be willing to pay a roughly 25% sales tax on everything you buy? …The key here is how much you pay in income taxes under the current system. If you’re one of the minority of people — the top 10% of the population — who pay 70% of the income tax revenues, you might see the change as a good deal. But if you’re lower down the income scale, and especially if you’re one of the 50% of Americans who don’t pay any income taxes, then you might not see it as such a good trade. And if you’re poor, you might really hate it.
But as Tim Geithner is fond of saying, plan beats no plan. Among Cain, Mitt Romney, and Rick Perry, Cain is the only one offering a bold reform to the tax code. Perry has no plan yet, and Romney’s is recycled from 2008 and he only hints at more in his recent proposal:
In the long run, Mitt Romney will pursue a conservative overhaul of the tax system that includes lower and flatter rates on a broader tax base. The approach taken by the Bowles-Simpson Commission is a good starting point for the discussion.
I would like to hear more about that addendum, please.