They Think You're Stupid, by Herman Cain: on Tax Reform
Herman Cain:
FactCheck: No, middle-earners pay more than 20% of taxes
Cain states that "Facts Don't Lie" (p.78) but SELECTING facts do! Cain states, accurately, that the top 20% of earners pay nearly 80% of all income taxes. That's misleading because it's only about the FEDERAL INCOME TAX, ignoring all other taxes. When
accounting for payroll tax, sales tax, property tax, and state taxes, the top earners don't pay nearly as much as Cain indicates. One purpose of the federal income tax's "progressivity" (that high earners pay a lot more) is to make up the "regressive"
nature of all of the other taxes (that low earners pay relatively more).The most important example is FICA, the payroll tax withholding for Social Security. Cain himself calls that tax "highly regressive" (p. 83). Employees pay for FICA at 6.2% on the
first $106,800 of taxable earnings, and 0% above that earning level. That means low- and middle-earners actually pay towards FICA a HIGHER percentage of their income than do high-earners. Cain misleads readers by citing only the federal income tax totals
Source: OnTheIssues FactCheck on H.Cain's "They Think You're Stupid"
Jun 14, 2005
Herman Cain:
FairTax will cause the US economy to skyrocket
Passage of HR 25 will replace the outdated mess that is the federal tax code with the national retail sales tax, also known as the FairTax. The FairTax will remove the current onerous tax burden from the backs of citizens and businesses and cause the
economy to sky rocket. Passage of the FairTax will dramatically benefit all citizens, especially the lowest wage earners. Why don't more members of Congress support the FairTax? Most are waiting to trade their vote for some "pork" to be sent back home.
Source: They Think You're Stupid, by Herman Cain, p. 11
Jun 14, 2005
Herman Cain:
Estate tax causes farmers to have to sell the farm
If voters do not see how an issue personally affects them and their families, they will not feel connected to the message or the messenger. The debate surrounding repeal of the estate tax, until recently, most African
Americans felt no connection to this debate because they did not have any estates to pass on to their heirs. A large and growing percentage of African
Americans have achieved some financial success, which has produced a personal connection to arguments for eliminating the estate tax. The current estate tax does not merely "tax the rich" as the Democratic Party has argued for years. It causes farmers to
have to sell the farm to try to save the farm and unfairly diminish the ability to pass first-generation success on to the next generation in a family. A lifetime of hard work and risk-taking should not go to the government, but to one's family.
Source: They Think You're Stupid, by Herman Cain, p. 4
Jun 14, 2005
Herman Cain:
Top 20% of earners pay nearly 80% of all income taxes
Liberal politicians have misled people about who actually pays most of the taxes in this country. One of their favorite promises is to provide a tax cut for the middle class. I have a breaking announcement--There is no middle class!Who pays
taxes in the US?- Top 1% of income earners pay 32% of all income taxes
- Top 5% of income earners pay 51% of all income taxes
- Top 10% of income earners pay 64% of all income taxes
- Top 20% of income earners pay 78% of all income taxes
-
Bottom 80% of income earners pay 20% of all income taxes
The statistics above show that 20% of the income earners in the nation pay nearly 80% of all income taxes.. Where is this middle class the Democrats keep talking about?
Yet we never hear an end to the liberal chorus that cuts in the tax rate are "tax cuts for the rich." Liberals believe that the amount of control they can exert over your life is directly related to the amount of taxes they can take from your paycheck.
Source: They Think You're Stupid, by Herman Cain, p. 49
Jun 14, 2005
Herman Cain:
1990s: chaired Tax Leadership Council, promoting FairTax
In the 1990s I became chairman of the Tax Leadership Council for an organization called Americans for Fair Taxation. AFFT promotes replacement of the current federal tax code with a national retail sales tax, also known as FairTax. The idea of replacing
the federal income tax with the FairTax is gaining grassroots support and momentum across the country. The FairTax will result in an immediate increase in take-home pay for all wage earners and effectively "untax" the poor.
Source: They Think You're Stupid, by Herman Cain, p. 82
Jun 14, 2005
Herman Cain:
Public doesn't understand elementary economics of tax cuts
Republicans have done a poor job communicating the effects of cutting or eliminating income, dividend, and estate tax rates on producing economic growth, job creation, and individual prosperity. They mistakenly assume that most of the public understands
elementary economics. They do not. Instead of framing the issue of tax cuts around the personal benefits available to individual taxpayers, such as more money in their pockets and their companies will be less likely to lay people off from their jobs,
Republicans defend tax rate reductions by arguing that federal coffers will swell and business will grow and hire more employees. Individuals care more about not being laid off than they do about a businesses growing. While the Republicans are technicall
correct, Republicans must remember that businesses do not vote in elections. Leroy and Bessie Public vote in elections and in the back of their minds is the thought that the Democrats might be right when they charge that tax cuts only benefit the rich.
Source: They Think You're Stupid, by Herman Cain, p.103-104
Jun 14, 2005
Herman Cain:
IRS automatic withholding is immoral taxation
In 1943, the federal government began an immoral program that would forever change the way that Americans think (or in this case, don't think) about taxation. The federal government enacted what we know of as "automatic withholding." [Before
1943] people were responsible for sending the IRS a check by April 15 each year for the amount of taxes owed on their prior year's income. People knew exactly how much they were paying for government services. Automatic withholding was designed as a
way to fill the federal coffers every month and to mask the true cost of ever-escalating federal spending. Congress promised the public that automatic withholding would end as soon as the war was over. That war ended 60 years ago.
Of course, taxes are still automatically withheld from your paycheck. Automatic withholding is nothing short of immoral on the basis that it keeps people ignorant of the true cost of government and the amount of taxes they actually pay.
Source: They Think You're Stupid, by Herman Cain, p.136-137
Jun 14, 2005
Herman Cain:
1995: Served on Commission on Economic Growth & Tax Reform
Several commissions over the last 20 years, including the one I served on in 1995 (the National Commission on Economic Growth and Tax Reform), have all concluded that a replacement tax system should satisfy six principles:- Promote economic growth
by reducing marginal tax rates and eliminating the tax bias against savings & investments
- Promote fairness by having one tax rate and eliminating all loopholes and exclusions
- Be simple and understandable. Simplicity would dramatically reduce
compliance costs and allow comprehending actual tax burdens
- Be neutral rather than allowing misguided officials to manipulate and micromanage our economy by favoring some of the expense of others
- Be visible so it clearly conveys the true cost
of government and so people would not be subjected to hidden changes in the tax law
- Be stable rather than changing every year or two so people can better plan their businesses and their lives.
The FairTax satisfies all six criteria.
Source: They Think You're Stupid, by Herman Cain, p.137-138
Jun 14, 2005
Page last updated: Feb 25, 2019