Herman Cain's 9-9-9 Plan

This plan so far, has been Herman Cain's claim to fame and because of this he has recently exploded in the republican nomination polls. For those of you who haven't heard of it, I'll explain what it means. He believes that the current tax code is unfair and should be completely eliminated. In this plan he wants to institute a simple flat tax. A 9% tax on household income, a 9% corporate tax and a 9% national sales tax. I am very intrigued by this and appreciate it for several reasons.

The major reason is that it simplifies the tax code tremendously and would basically eliminate the IRS as we know it, making April 15th no longer a major deal. This is because filing would become incredibly simple. The simplification of the tax code is also appealing to the voters, its something they can easily understand, which increases its popularity. Another reason I like the idea is because it lowers the emphasis on taxing income and increases the emphasis on taxing consumption. Hence it encourages you to save your money, which as you already know I believe is a key to wealthiness.

Some people who oppose the plan say that it will increase the tax on the poor, which is somewhat true BECAUSE many of the low income people don't pay taxes at all!! To suggest a flat tax where everyone has to pay the same percentage is a ridiculous thought because these low income families are used to the government not taking any money from them at all. And everyone continually talks about how the rich aren't doing "their fair share." As it is right now 45% of Americans don't pay any income tax at all! How can you expect to run a prosperous country with almost half of the people not supporting it?

Critics also dislike that it taxes consumption so heavily. They translate this as an extra tax on the poor. Why? Well because the poor spend more of their income. "Low income people tend to spend about 98 percent of their income, middle income people spend 97 percent and high income people spend 90 percent."(Source) So let me get this straight high income people don't spend all there money?? DUH! That's because chances are high income people are smarter with their money and actually save some of it! I personally think that to spend 90% of your income is too high even for those with a substantial income. You should give away at least 10% and then save another 15%. This would set the max income I would spend at 75% and perhaps more people would follow this if this tax code was passed.

In the end this is all preliminary banter by all the so called great "economists" and no one can truly predict what will happen when put into practice. What we do know is that the current tax code is confusing, it sucks, it's not working and needs to be changed completely. But with that said, I am still not going to look to Washington to fix all of our problems. We need to take responsibility for our own lives, get our own jobs, save our own money and support our own families. Nobody can do it as well as we can.

--A Future Millionaire