9-9-9-ZERO

Herman Cain's "9-9-9" plan would cut corporate income taxes to 9%, cut personal income taxes to 9%, and create a federal sales tax at a 9% rate. So far, so simple. Winners and losers:

Anyone who pays more than 9% in federal income taxes should be a winner, right? Because of the graduated brackets in federal income taxes, with all the deductions and exemptions, nobody pays the nominal marginal rate for his or her income level.

However, Cain's plan would eliminate all deductions and exemptions, including home mortgage interest, which means that the 9% could apply to a much larger proportion of your actual income. Like all of it!

The sales tax, on top of state and local sales taxes, would be sharply regressive, and could discourage the recovery in retail sales. Moreover, unlike many state sales taxes, Cain's program would not exempt food or medicine from taxation. 9% on everything you buy, across the board. That adds up.

Cain's plan eliminates deductions and exemptions, but it drops income tax on capital gains from speculation in stocks and real estate altogether. That's a big exemption for the finance capitalists and the rentier class. (Those are the people who don't need exemptions.)