Many conservatives have questioned the portion of Herman Cain's 9-9-9 plan that calls for a 9% sales tax. To be sure, there is a danger that a new type of tax can be subject to abuse. But as Cain says, his proposed tax system is so simple that the people can monitor when Congress decides to raise taxes. Now because there are so many hidden taxes and tax loopholes, we cannot discern when are taxes are being raised.
But here is why I think a 9% sales tax is a good idea: As an attorney who has represented thousands of people over the last 32 years, I know that there are many people who do not report all of their income. There is a vast underground economy in this country, if my experience is any guide. The practice is so common that the courts do not even comment on it when the issue is brought up at trial.
I am sympathetic with people who are loathe to pay taxes, but for those who do not report income, there are others--namely wage earners--who have to take up that slack by paying higher taxes. It is not fair to those who do report all of their income, or who are forced to report all of their income because they are W-2 employees.
A 9% sales tax is a simple way to require those who live on unreported income to pay some federal tax.
Barack Obama and the Democratic Congress tried to fix this problem by forcing business owners to file 1099's on most purchases, resulting in a bookkeeping and paperwork nightmare. Public outcry forced the government to rescind that requirement. Similarly, more IRS auditing of individual taxpayers might force more reporting of cash income, but that would require far more IRS agents and more intrusion into our lives. And an IRS audit is expensive for both the government and individual.
So, while a national sales tax may be distasteful to many, it accomplishes one goal in a simple, non-intrusive way: it taxes people who do not report all of their income, without any cumbersome or intrusive mechanisms to force people to report their unreported income.
But here is why I think a 9% sales tax is a good idea: As an attorney who has represented thousands of people over the last 32 years, I know that there are many people who do not report all of their income. There is a vast underground economy in this country, if my experience is any guide. The practice is so common that the courts do not even comment on it when the issue is brought up at trial.
I am sympathetic with people who are loathe to pay taxes, but for those who do not report income, there are others--namely wage earners--who have to take up that slack by paying higher taxes. It is not fair to those who do report all of their income, or who are forced to report all of their income because they are W-2 employees.
A 9% sales tax is a simple way to require those who live on unreported income to pay some federal tax.
Barack Obama and the Democratic Congress tried to fix this problem by forcing business owners to file 1099's on most purchases, resulting in a bookkeeping and paperwork nightmare. Public outcry forced the government to rescind that requirement. Similarly, more IRS auditing of individual taxpayers might force more reporting of cash income, but that would require far more IRS agents and more intrusion into our lives. And an IRS audit is expensive for both the government and individual.
So, while a national sales tax may be distasteful to many, it accomplishes one goal in a simple, non-intrusive way: it taxes people who do not report all of their income, without any cumbersome or intrusive mechanisms to force people to report their unreported income.
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