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AdLib On October - 13 - 2011


If this is mid-October, there must be a new GOP frontrunner for the Presidency and if NBC/Wall Street’s latest poll is accurate, the Baggers’ version of the Chuck E. Cheese birthday crown has now been placed on the head of Herman Cain.

It’s not surprising that Cain, who basks in his ignorance, prejudice and intolerance as positive traits has Baggers nodding, “He’s just like me…except how come he’s black?”

With the Mainstream Media chasing conservative attention like a needy best friend, they have swiftly elevated Cain to a position of importance, whether or not he is a babbling fool who thinks that facts are the same as being stubborn and having opinions. Then again…whoever excels most in that might typically be in the lead of the GOP presidential campaign.

As was evidenced in this week’s debate, Herman Cain’s “9-9-9” plan, though he’s produced no economic materials or substantial details, is being viewed by the MSM as a serious plan. It’s as if he’s promised unicorn rides to all American and instead of questioning the existence of unicorns, all the MSM is asking is when they get their turn to ride.

Ever since there have been wealthy people who have wanted to crush the poor and middle class under a regressive tax burden, so they could pay less, there have been flat tax proposals.

The insidious thing about flat tax proposals is how their utter simplicity fools reasonable people. If someone said, “The fairest way to tax people is to get rid of all deductions and make everyone pay exactly the same 9% in income and sales taxes!”, it doesn’t sound terribly unreasonable at first. One has to start looking at specifics as opposed to generalities to truly understand the social disaster such a plan represents.

Let’s begin with the wealthy:

In 2008, the top earning 400 paid an effective federal income tax rate of 18.11%, up from a record low 16.62% in 2007, when an even higher share of their total income came from capital gains.

http://www.forbes.com/sites/janetnovack/2011/05/11/richest-400-took-record-share-of-capital-gains-during-market-meltdown-year/

Now, these whining buckets of greed, who howl at paying the top rate of 34%…but are in fact paying only 18%…want their taxes cut in half to 9%. Imagine the massive loss of revenues to our government that would entail. However could we subsidize this enormous tax cut for the wealthy?

Good question, which brings us to the poor. Here is some info from the National Poverty Center:

2010 Poverty Thresholds, Selected Family Types

  Single Individual Under 65 years  $ 11,344
65 years & older  $ 10,458
  Single Parent One child  $ 15,030
Two children  $ 17,568
  Two Adults No children  $ 14,602
One child  $ 17,552
Two children  $ 22,113
Three children  $ 26,023


SOURCE: U.S. Bureau of the Census, Income, Poverty, and Health Insurance Coverage in the United States: 2010, Report P60, n. 238, p. 61.

Poverty guidelines are a simplified version of poverty thresholds and are issued by the Department of Health and Human Services to determine financial eligibility for certain federal programs.  For more information on these guidelines, see the 2011 Federal Poverty Guidelines.

How many people were poor in 2010?

In 2010, 15.1 percent of all persons lived in poverty. The poverty rate in 2010 was the highest poverty rate since 1993. Between 1993 and 2000, the poverty rate fell each year, reaching 11.3 percent in 2000.

http://www.npc.umich.edu/poverty/

So, out of 309 million Americans, 47 million live in poverty. Unlike the convenient demonizing from the wealthy, these are not just lazy college drop outs and welfare queens, these include senior citizens, the handicapped and severely ill and most of all, children.

Consider the amounts in the chart above that these households bring in. Those who are poor struggle just to pay for food, rent and other necessities. They don’t pay federal income tax…because they’re poor and our government acknowledges that they can’t afford to do so. Many do however pay payroll taxes for Social Security and Medicare, they pay state sales taxes and other fees and taxes.

Under this immoral 999 plan…they would instead have to pay 9% of the money that isn’t enough to lift them out of poverty, in income tax. If that isn’t bad enough, the price of everything they buy, baby formula and baby food, diapers, eggs, milk, butter, bread, etc. suddenly costs them 9% more in federal sales tax (added to the existing state sales tax of course, for example, that would mean that they and everyone in CA would pay 17.75% in tax on everything they buy).

Unlike the wealthy who have plenty of income for investing and saving, the poor spend the money they earn. So a federal sales tax would be applied to most of their income whereas it would only be applied to a fraction of the wealthy’s income.

The true impact on the poor would be explosive and devastating. Already barely able or not fully able to make ends meet, the poor would have up to 18% more of the already minimal income they bring in, taken away from them. Millions will simply not be able to afford food and shelter anymore, let alone medical and child care expenses.

Meanwhile, someone in the top 1% making a billion dollars a year saves $900,000 in income tax. Oh, and the Cain plan also eliminates the Capital Gains tax which is how many of the wealthiest people receive much of their income…meaning they will pay 0% income tax on what, for many of them, is most of their income. And what’s that you say, at least when they die they’ll have to pay an Inheritance Tax? Nope, Cain’s flat tax also eliminates that tax so a wall is built around the wealthy to cement their towering wealth in place.

Welcome to the 1%’s America.

As we’ve heard from the GOP Meme Machine, 47% of Americans don’t pay federal income tax. Though the poor will be the hardest hit victims of such a scheme, even those making around the median household income in America will be hammered.

The average U.S. household income in 2010 was $49,445 (typically the combined income of two adults). A majority of households making that amount or less pay little or no federal taxes but as described above, they pay state taxes, property taxes, payroll taxes, etc..

So, all of those Americans whose income has stagnated under the corporate class warfare of the past decades, which in fact means that due to inflation most Americans are making less each year, would also be hit by a 9% rise in everything they buy and a 9% loss of their current earnings.

As if this is not bad enough, consider what happens if the only taxes being paid are sales and income taxes. No more payroll taxes mean no more Social Security and Medicare for Americans. Not even a privatization of the safety net, Herman Cain’s flat tax eliminates the social safety nets completely.

As Lawrence O’Donnell pointed out yesterday, Herman Cain’s website actually states that he would end Social Security and Medicare:

For the generations or workers who have paid into Social Security and Medicare, the federal government’s inevitable failure to pay them as they retire is undeniably stealing. These are generations who have worked and sacrificed to leave this country a better place for their children and grand children as they retire. The current behavior of an out of control federal government does little to ease their minds.

The federal government has imposed expensive and often counter-productive social and welfare programs on the states and the people. It is time to admit the mistakes, and get the federal government out of the way. This will allow states, cities, churches, charities and businesses to offer a helping hand instead of a handout where they live. People closest to the problems are the best ones to solve the problems effectively.

https://www.hermancain.com/the-issues (click the Entitlements tab).

Yep, that’s right. Not only would everything that seniors buy cost 9% more, including medicine, health care, food, etc…but they wouldn’t even have any money to pay for anything anyway since they wouldn’t get Social Security checks anymore.

When future seniors need heart surgery or cancer treatment, well, according to Cain, the local church or hardware store will surely be happy to take care of that for them.

Lastly, as was explained in the debate, Bloomberg did an analysis on Cain’s plan and concluded that it would bring in 10% less than the $2.2 trillion in taxes brought in last year. So, under Cain’s plan, another $200 billion would need to be chopped out of the budget…and without Social Security to borrow from anymore, a greater amount more would have to be cut.

America would be torn apart at the seams with privation and desperation on every street in America.

It is literally insane that the arguable GOP front runner for President of the United States wants to wreak such havoc on America and the MSM just gives him a nod.

Indie Voters were swayed by the hysteria of the right over the Affordable Care Act that was actually about insuring many people who couldn’t get coverage. And yet, now when there’s a plan being floated that would destroy Social Security and Medicare, crush the poor, plunge most Americans deeper in debt so that the wealthy can keep more of their money and underfund the US which would send our economy into a disastrous Depression…the perpetrator is treated with greater respect.

The bright spot to all of this is that Herman Cain will never be elected President. He hasn’t the smarts or philosophies that would appeal to anyone outside of the hateful, pro-greed base in the Republican party.

However, attention should be paid to this flat tax plan, if at least to enlighten and educate people as to the threat a flat tax poses, the ruthlessness of the GOP and the top 1%, how openly brutal they want to be towards the majority of Americans and how callously they would destroy the lives of millions of Americans once again, out of their insatiable greed.

Written by AdLib

My motto is, "It is better to have blogged and lost hours of your day, than never to have blogged at all."

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