Intermarkets' Privacy Policy
Support
Slow Joe Biden Now Pitching Obama's Dead "Jobs" Bill To 4th Grade Class | Main | Herman Cain Really Doesn't Know A Damn Thing About Foreign or Military Policy, Does He?
October 19, 2011

Herman Cain's Website: The 9-9-9 Business Flat Tax Is a Modified VAT

This should put the argument to bed once and for all.

From page 7 of the Fiscal Associates report (PDF) linked to Cain's website:

A business transactions tax would radically broaden the base for businesses. Each business would pay tax on gross receipts less payments to other businesses. Allowing the subtraction of payments for intermediate goods yields the value added by the company. Subtracting investment as well yields a subtraction method value-added tax.

In keeping with the basic value-added structure, the tax is treated as border adjustable. That is, the tax is on a territorial basis and applies only to sales in the U.S. rather than the worldwide treatment under the current tax system. This approach exempts exports while subjecting imports to the tax. (emphasis and color coding added)

From Cain's description of the business flat tax on his website.

Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports. (color coding added)

Differences:

  • Receipts versus gross income. Receipts implies cash-basis, while gross income implies accrual. There could be other differences as well.

  • Payments to other businesses versus purchases from other U.S. located businesses. The same cash versus accrual question plus a little protectionism thrown in.

So according to Cain's own experts, his business flat tax is a modified VAT.

Also, there's an old but good piece at Forbes where Bruce Bartlett explains what a subtraction-method VAT is and how it is different than a Flat Tax.

The flat tax, originally devised by Hoover Institution scholars Robert Hall and Alvin Rabushka, is a subtraction-method VAT with one twist. Businesses are permitted to deduct cash wages paid from the base on which they calculate the VAT.

... a point which has been made countless times here at the HQ.

In summary, Cain's business flat tax and a VAT are like apples and apples.

I encourage you to read the full report (PDF). It doesn't specifically support 9-9-9 as much as it does list several alternatives and say choosing one would be nice.


digg this
posted by Andy at 12:19 PM

| Access Comments




Recent Comments
Tammy al-Thor: "Posey is older than he looks, but that rookie.... ..."

TomG: "Hockey, true. Anyone who hasn't seen Jim Corneliso ..."

Vendette: "I mean, thank you, vendette. Posted by: Tammy ..."

BCochran1981 - Tatted, Rested and Ready: "Oh. I forgot to ask. We piss anyone off today ..."

Tobacco Road, occasional Terminator: "So many people, so many needs. The beautiful teach ..."

eman: "So, basically, the Biden's are gangsters. They ..."

Seamus M: ""Treated a patient today who was alive at the time ..."

Tammy al-Thor: "*Hands Tammy a fan* Posted by: Vendette at Octobe ..."

jewells45Loves her Royals: "Vertov.. that was right before I started watching ..."

BCochran1981 - Tatted, Rested and Ready: "[i]Posted by: Polliwog the 'Ette at October 22, 20 ..."

EC: "I said earlier today that Kevin Vickers told Vic t ..."

kbdabear: "Today's entertainment is chock full of sex yet the ..."

Recent Entries
Search


MuNuvians
Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
News/Chat
Archives
Powered by
Movable Type 2.64