Commonalities and Differences in the Three Plans
Before we look at these plans, it is important to note both the Fair Tax and the Flat Tax are bills in the legislative process. The 9-9-9 plan is a proposal by presidential candidate, Herman Cain. Cain's idea is to implement the 9-9-9 plan as a specific, credible plan that creates a great first step toward reforming the current tax system and ushering in the implementation of the Fair Tax.
Richard Michael, a common law tax advocate, who collaborated with us to delineate the similarities and differences in the various alternative tax plans such as Cain's 999 plan explained this distinction to us in his interview.
Flat Tax versus Fair Tax
The two plans are alike in that both are flat rate taxes based on consumption. They both are revenue/price neutral when it comes to investments and savings. Both are tax replacement bills rather than tax reform bills. Deductions are eliminated to reduce the complexity of the tax code.
Let’s look a few ways these two differ:
- The Flat Tax would keep the IRS as the administrative oversight of the program, while the Fair Tax would abolish it.
- The Flat Tax contains hidden corporate and compliance taxes whereas the Fair Tax is transparent and free of any additional, undisclosed taxes or fees.
- The Flat Tax would retain the income tax system; the Fair Tax would abolish it.
- The Flat Tax retains payroll taxes and income tax withholding; the Fair Tax eliminates these.
- The Flat Tax would have more than one tax rate because it retains the income tax system; the Fair Tax has one tax rate.
What about the 999 Economic Plan?
It is a little tricky to compare the 999 Economic Plan to these two since the second phase of 999 is the implementation of the Fair Tax. A major component of the Fair Tax is eliminating the income tax; the 999 plan retains it but it is taxed at a single, flat rate. Given that, here we look at a few key elements of the first phase of the 999 plan, which is simple and straightforward.
- It's similar to the Flat Tax plan because there is one rate: nine percent. This single rate applies to corporate, personal and a national sales tax.
- It's comparable to the other two in that it replaces specified taxes with a flat rate tax. However, the 999 plan does retain the income tax, whereas the Fair Tax would eliminate it.
- The role of the IRS is impacted because of the lower 9 percent flat tax rate.
What does all this mean to the American taxpayer?
Regardless of which plan you favor, there are some areas of common agreement among most individuals. Number one, the tax code is flawed and onerous and needs reform or replacement. Number two, no matter which plan is implemented either in its entirety or in a modified version, the result is economic growth, job creation, an explosive infusion of cash into the marketplace, and a better quality of life for the American taxpayer. The economy ignites and our country thrives. The parasitic nature of government is eliminated and control reverts to—we, the people—as was intended by our founding fathers.