Here’s the headline as read on Yahoo’s front page:

Is Hermain Cain’s 9-9-9 tax plan fair?

The candidate’s radical idea is simpler for taxpayers, but critics say it unfairly favors the rich

^^

OH MY GOD.  You mean that changing our current tax code at all would favor the rich?  The current code already abhors and punishes the rich by having a progressive tax system.  It’s the nature of the beast; a system that we’ve had for nearly a century.  What Herman Cain is arguing for is a flat tax system which is inherently flat, or if you want to argue about practice, it is regressive.  I’ll happily quell that argument if you want to talk about the simple nature of investing.

Here’s what our current income tax code extracts from the pockets of varying income groups according to the IRS, 2008:

Tax Year 2008

Percentiles Ranked by AGI

AGI Threshold on Percentiles

Percentage of Federal Personal Income Tax Paid

Top 1%

$380,354

38.02

Top 5%

$159,619

58.72

Top 10%

$113,799

69.94

Top 25%

$67,280

86.34

Top 50%

$33,048

97.30

Bottom 50%

<$33,048

2.7

Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service

Tax Year 2007

Percentiles Ranked by AGI

AGI Threshold on Percentiles

Percentage of Federal Personal Income Tax Paid

Top 1%

$410,096

40.42

Top 5%

$160,041

60.63

Top 10%

$113,018

71.22

Top 25%

$66,532

86.59

Top 50%

$32,879

97.11

Bottom 50%

<$32,879

2.89

Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service

I can’t believe that took more than 5 seconds of critical thinking that any major overhaul of the tax code might actually propose that the bottom half of the income earners in this country actually contribute and pay for at least a smidgeon of what they receive in benefits.  Excellent deduction, CNN.  We get back to the subjective nature of ‘fairness.’  What is fairness?  I doubt you could argue that the wealthy aren’t paying their fair share.

And onto this myth that millionaires and billionaires don’t pay taxes:
According to IRS data, 1,470 millionaires and billionaires paid zero taxes in 2009.  That is just .7% — less than one percent — of the 200,000+ Americans who earn over a million dollars a year.  The other 99.3% of millionaires and billionaires are paying 29.1& of their income in federal taxes, compared to households earning between $50,000 and $75,000 that pay about 15% of their income in federal taxes. Again, keep in mind that in the same year of 2009, 47% of households paid zero federal income taxes.  This trend is pretty static over the last ~6 years of IRS data.

Full article is here: http://finance.yahoo.com/news/Herman-Cains-999-tax-plan-cnnm-976918316.html?x=0

IRS Report in .pdf: http://www.irs.gov/pub/irs-soi/09inalcr.pdf

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