Study: Cain tax plan raises taxes on 84 percentBy STEPHEN OHLEMACHER, Associated Press – 2 hrs 56 mins ago
WASHINGTON – Herman Cain's 9-9-9 tax plan would raise taxes on 84 percent of U.S. households, according to an independent analysis released Tuesday, contradicting claims by the Republican presidential candidate that most Americans would see a tax cut.
The Tax Policy Center, a Washington think tank, says low- and middle-income families would be hit hardest, with households making between $10,000 and $20,000 seeing their taxes increase by nearly 950 percent.
"You're talking a $2,700 tax increase for people with incomes between $10,000 and $20,000," said Roberton Williams, a senior fellow at the Tax Policy Center. "That's huge."
Households with the highest incomes, however, would get big tax cuts. Those making more than $1 million a year would see their taxes cut nearly in half, on average, according to the analysis.
Among those in the middle, households making between $40,000 and $50,000 would see their taxes increase by an average of $4,400, the report said. Those making between $50,000 and $75,000 would see their annual tax bill go up by an average of $4,326.
"It's very, very regressive compared to the current system, and that's largely because we're exempting capital gains, and we're taxing your spending with the sales tax," Williams said. "People at the top end don't spend all their money and they get a lot of capital gains, so they are doing pretty well here."
Cain disputed the analysis Tuesday evening during GOP presidential debate in Las Vegas, where the other Republican candidates heaped on criticism. Cain has acknowledged that taxes would increase for some but says taxes would decrease for most.
"It does not raise taxes on those that are making the least," Cain said. "All of those are simply not true."
"The reason that our plan is being attacked so much is because lobbyists, accountants, politicians, they don't want to throw out the current tax code and put in something that's simple and fair," Cain said. "They want to continue to be able to manipulate the American people with a 10 million-word mess."
Cain's plan would scrap current taxes on income, payroll, capital gains and corporate profits. He would replace them with a 9 percent tax on income, a 9 percent business tax and a 9 percent national sales tax.
Cain's campaign has gained momentum largely in response to his tax plan, which is popular in part because of its simplicity. Several polls have the former CEO of Godfather's Pizza at or near the top of the Republican field, vying with former Massachusetts Gov. Mitt Romney.
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