Herman Cain's 9-9-9 Does NOT Add Up to Savings!
Let me start with a simple question.
Whatever happened to journalism?
Herman Cain was just on "The Morning Rundown" with Chuck Todd, defending his "9-9-9" program. Nine percent income tax, nine percent sales tax, nine percent corporate tax. Todd, to his credit, challenged Cain on his claim that this would save the average taxpayer thousands of dollars.
Paraphrasing, Cain said something like, "Say you're an average family of 4 making $50,000, taking standard deductions and whatnot — you pay something like $10,000 in taxes, right?"
That remark went unchallenged. Until now.
I dug out the old 1040A, and I figured out just what this family of 4 making $50,000 a year would pay in income taxes.
And it wasn't $10,000. It wasn't even 30% of $10,000.
You're married, filing jointly. You claim two kids as dependents. Your adjusted gross income is $50,000. The standard deduction for a couple filing jointly is $11,400. Look it up yourself. Subtract that. Your taxable income is now $38,600. Then, you multiply $3,600 by the number of total exemptions, which in your case is four. Subtract that $14,600 from your taxable income. You are now left with a taxable income of $24,000.
The 1040A Tax Tables show the tax for that $24,000 of taxable income is $2,786. Not $10,000. $2,786.
Now, say Cain is somehow elected and his 9-9-9 comes to pass.
Nine percent of $50,000 is $4,500.
Now, I never hear Cain saying that you would get to claim all the deductions you currently get to claim.
If you DO, then your $24,000 of taxable income drops to $2,160. That's a savings of $626. So, if that is true, Yay for Herman!Continued on the next page