Archive for October 19th, 2011

The other 90%

19 October 2011

That’s who loses from Herman Cain’s “9-9-9” tax plan, according to analysts at the nonpartisan Tax Policy Center (jointly run by the Urban Institute and the Brookings Institution). Krugman has a quick synopsis.

Income stratum   Impact on after-tax income

  • Bottom 20%       -18.7%
  • 20th-40th %ile  -15.4%
  • 40th-60th %ile  -10.1%
  • 60th-80th %ile   -6.1%
  • 80th-90th %ile  -2.3%
  • 90th-95th %ile  +0.9%
  • 95th-99th %ile  +6.5%
  • Top 1%  +19.7%
  • Top 0.1%  +26.6%

Howard Gleckman of the Tax Policy Center notes, “In Cain’s world, a typical household making more than $2.7 million would pay a smaller share of its income in federal taxes than one making less than $18,000.”

I wrote before that the Cain tax plan seemed calculated to appeal to Republicans whose idea of economic injustice is poor people not paying income tax (which happens because they earn less than the standard deduction and personal exemption. Never mind that they do pay payroll taxes, sales taxes, and excise taxes). But even if you do think the tax system is too generous to the poor, you probably don’t think we should raise taxes on the middle and upper-middle class while cutting taxes on millionaires. In fact, a poll this month found that 64% of Americans wanted to raise taxes on millionaires, including 83% of Democrats, 65% of independents, and 40% of Republicans.

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