Mortuorum said:
9% for incomes over the poverty level (which is what Cain proposes) is much more reasonable than the present top marginal tax rate. The real kicker is the 9% federal sales tax provision. It's steep and there would need to be exemptions for subsistence items (food, heating oil, etc.) to avoid overtaxing the impoverished.
And for everyone mocking his plan, at least he has a plan, which is more than can be said for hte rest of the slate of Republican hopefuls... or the present Democratic incumbent.
The top marginal income tax rate in the US is 35% but it only apply on incomes higher than $379,150.
The amount of Federal Income Tax that would be paid by someone making $379,150 is $110,016.50 or about 29% of Gross Income. Now any income earned above that is taxed at 35%. So if you maded $379,151 you'd pay $110,016.85
There are deductions, most involve having children or owning a home however to reduce the amount of income that is used to determine how much income tax you own.
Also keep in mind these are just WAGES, Capital Gains which is income taxed from investments is taxed at a much lower rate, about 15%.
Cain's plan essentially turns into a 27% flat tax on wages. All income eventually gets spent in the long run and the corporate tax will be pushed down to comsumers in higher prices. Meanwhile the Captial Gains and Estate taxes (Which only matter to people dying with more than $5 Million in assets) go poof.
The total amount of federal income take you pay depends on how much you make:
8,500 = 10%
34,500 = 13.8%
83,600 = 20.4%
174,400 = 24.3%
Although your paycheck would have less taken out of it, everything would be much more expensive as a result.
Here's the thing about the SimCity tax system: The tax rates in SimCity are PROPERTY taxes not income taxes. The amount of revenue they generates is a function of desirability of a given zone, not the people in it. Residential areas benefit from low pollution and proximity to parks as well as basic services such as power and water. Industrial Zones benefits the most from access to a workforce and a transportation network. Commercial areas require a mix of the two.
So if they did get 9-9-9 from SimCity they didn't understand how to play the game.