- It would substantially increase the take-home pay for American workers from not
only the lowering of the income tax brackets but the elimination
of both the
business side and employee side of payroll taxes.
- Millions of words of complexity in the U.S. Income Tax code would be eliminated,
saving money in tax preparation as well as providing a method of cutting a large
part of government spending (i.e. most of the IRS and the overhead of processing
returns, payments, refunds, audits, compliance checks, etc.).
- Corporations and businesses would have a massive inflow of investment
cash, leading to business expansion and new hiring.
- Personal savings accounts would increase quickly, meaning banks would have more
money to lend to potential homebuyers and other consumers.
- Many intelligent accounting personnel which are currently tied up in tax
preparation would be freed up to shift their services to other sorely-needed
areas--such as cost cutting, efficiency improvement, new
business organization, and Sarbones-Oxley compliance.
- Corporations that have shifted resources oversees would have incentives to move
operations back to the U.S., shifting associated hiring back to Americans.
- Foreign companies would have much greater incentive to move their operations to
the U.S., hiring more Americans in the process.
- Starting or investing in a new business is much less risky since you get to keep
a much greater percentage of the earnings.
- Having more American businesses along with a lower unemployment rate means
the tax base vastly increases, with entitlements such as unemployment
falling, leading to a much-needed drop in the annual deficit.
- Americans wouldn't have to spend so much of their leisure or work time tracking
expenses for tax returns & filling out complicated forms.
- Americans would have much greater incentive to work, invest, and save.
- The massive inflow of new investment cash from the elimination of dividend & investment tax, along
with the greater after-tax profit potential would make it much easier to start new businesses; more
businesses means more competition, leading to lower prices and better quality products and services.
- Many of the rich individuals who can hire the best lawyers & accountants to find
all the tax loopholes would be forced to pay at least 9% on all their earned
- Given the fact we have an unsustainable national debt and annual
deficit with limited ability to cut
entitlements such as social security, drastic action is needed to restructure the economy and tax
- The entire pricing structure of goods and services will change for the better, as lower employment costs,
more competition, and higher after-tax profit rates will lead to lower prices, possibly enough to offset any sales tax addition.
- There is less incentive to cheat on tax returns since only 9 percent is taken, as opposed to the 40+ percent
that may be taken between income tax and payroll taxes.
- The elimination of the death tax allows small and family businesses to remain intact upon the founder's death,
whereas now they often must be sold or broken up to pay estate taxes.
- The elimination of capital gain and dividend taxes means it's much easier for the poor and middle class to
move into the ranks of the rich since it's much easier to build a fortune when the government isn't
picking away from it every year and every transaction.
- American exports would leave our shores without the embedded corporate taxes and higher employment costs,
meaning goods would be much more competitively priced internationally.
- Americans would have a lot more take home pay to spend on consumer goods, offsetting any negative change in the pricing
caused by the sales tax.
- Consumers and free-market capitalism would again be the central focus of the economy, meaning money would get
better allocated to the worthwhile, in-demand areas of our economy, rather than where corrupt, inefficient government
organizations would like to direct the money.
- The stock market would likely skyrocket since untaxed capital gains and dividends would be so much better investments.
- A sales tax is much easier to see and track since an increase appears on every purchase receipt, whereas with an income
tax, increases are usually spread over 24+ pay periods and intermingled with deductions & exemptions.
- People who criticize the 9-9-9 plan and emphasize its riskiness ignore the vast number of problems & riskiness of our
current job-killing, de-motivating, freedom-sapping tax system.
- Congress cannot be trusted to keep future rates at 9-9-9, and it will be much easier to raise a
sales tax or turn it into a value-added tax than it would have been if
it never had been started.
- Congress is likely to create separate rates for various "sin" items such as alcohol, tobacco, and
fatty foods in addition to those items deemed "rich person items" such as luxury cars,
slowing taking away more of our money and freedom.
- Poor and middle class Americans will pay more than the rich on a percentage of income basis.
- It's a potentially risky system since it's impossible to really know if it will generate enough revenue to
cover enough of the $3.7 trillion the federal government spends
annually for defense, social security, Medicare, national debt
- Transition costs would likely be very expensive since so much of the tax
& business transaction recording system would be changed.
- Many accountants and lawyers, especially those who specialize in taxation, would lose their jobs and be forced to
train in new career skills.
- Many of the incentives in the income tax system, such as for education, home ownership, and energy efficiency, would
- Retirees and others who are living off saved income will be paying higher prices, despite the fact they paid
much higher income taxes when they earned the money.
- Black market purchases to avoid sales tax would likely increase a substantial amount.
- There would be less incentive to contribute to retirement accounts since most of the tax advantages would vanish, and given
the dire straits of the social security system, this is definitely not a good thing.
- The higher sales tax will provide a disincentive to consumer purchases, and consumer spending is one of the things
that drives our economy; this is especially true for high sales tax states such as New
York and California.
- Refundable tax credits such as the Earned Income Credit, which function effectively as a free payout to lower income working individuals, would be eliminated;
thus, the poor wouldn't receive the same large tax return many are used to receiving.
- With a divided Congress, it will likely be almost impossible to pass, and even if it does, Congress will hack it up
into a non-sensical mess as it does with most tax changes.
- The likely implementation & phase-in of the tax plan will take several years, and our economy needs a jolt immediately.