Monday, October 10, 2011

Pull the band aid off quickly and get to the gangrene

Tuesday’s Republican debate promises to feature Herman Cain front and center since he now is contending for the lead in some polls. His 666 economic plan, (I’m sorry, the 999 plan, its truly evil aspects get me confused) is popular with about 25% of Republicans which is driving his poll numbers.

Even Chris Wallace on Fox News Sunday questioned the wisdom of taxing poor peoples’ food and clothing at 9%. Cain’s retort was that he wouldn’t tax big ticket items like cars so they would get a break there. Okay that would be a huge break for the poor when the go down to the Mercedes dealer where Herman Cain shops. On a $200,000 sport coupe they could enjoy an $18,000 tax windfall, which about the same as the income of a family of four that are living slightly below the poverty line.

The fact is that the average adult in the bottom 90% of the population makes less than $30,000/year. That’s why the corporate press always quotes family income instead to make the number sound more palatable at around $51,000/yr as the average family has 1.8 workers. This is up from 1.1 workers pre-Reagan. Even at that, family income has slipped about $3000 since the current Depression started, or probably even lower by now as the data isn’t that up to date.

The working poor would also pay a flat income tax of 9% with no deductions instead of the zero they pay now if they are in the bottom half of earners. Cain counters that he would do away with the Fica tax of 14% so they would really pay less. This would be true for the self employed, but not for the working poor whose employers would gain the windfall on their half of the tax while workers’ taxes increased.

The 999 plan claims to increase government revenue and Herman Cain has a panel of economists that tell him so. He won’t name any of these experts however, but he says they are names you would know. (are they the same as names of Communists in the State Dept? [Ancient history reference]) But, Michael Linden, an actual expert on taxes and budget at the Center for American Progress plugged the triple 9 into the 2007 Federal Budget, and he determined that Federal revenue would have been half as much under the pizza mogul’s plan.

The symmetry of the nines would have increased taxes on the middle class by about a third, and the top one percent would have enjoyed a 60% tax cut. Total revenue would have only been about 1.3 trillion or just enough to fund the Pentagon, the interest on the debt and little or nothing else. Not a problem if you don’t mind the government borrowing money, as the rich are happy to buy Treasury Bonds that pay nearly zero interest. That’s what happens when you let the Rich make all the money they want, by any means they want, and then don’t tax them, the money just piles up. Sort of a King Midas parable here, all that the rich touch turns to gold but they can’t spend it. They can however buy a democratic republic and turn it into a kingdom.

I’m really not sure what would happen if you did do something as stupid as this plan, but hey, what we’re doing now isn’t really any different. The bottom half of the country can’t live on what they make, the 40% above them only get by on two jobs per family. The rich buy 1.5 trillion in bonds every year and more trillions pile up corporate coffers unspent. The country isn’t broke, the one percent have all the money.

We might as well go with the 999 plan, it would get it all over sooner. Democracy was fun while it lasted. Oligarchy will be even more fun for the 1%. Get used to the oligarchy or fight back.


Anonymous said...

Occupy Wall Street crowd is barking up wrong tree. Wall Street plays by the rules set by The Fed, Congress with White House approval. ..Protest/vote them out them if you don't like the situation.

John said...

It's possible to bark up different trees simultaneously.

Is there ANY evidence to assume that the "Occupy" "crowd" is advocating that Americans stay away from the polls?

John Puma