The Brookings Institution and the Urban Institute today released their analysis of Herman Cain’s 9-9-9 plan. He will have some explaining to do. It also seems that I was a lot kinder to him than Brookings and the Urban Institute when it comes to the impact of 9-9-9 on lower income individuals.
For individuals with an income in the $20,000 to $30,000 range, 97.3% will experience an increase in their taxes. Average tax increases in this income range was determined at $3,980, with after tax income falling by 16.2%. The average tax rate for this income range will be 22.1%.
Like I said in my Politic365.com article, the tax base and burden is broadened. It would be up to the poor to increase their incomes, or invest in productive and profit seeking endeavors to reduce their burden.
There is another way the burden could be reduced; one that only requires a tweak to the 9-9-9 plan. I’ll have that for you next time.