Unlike the current tax code, the 9-9-9 plan doesn’t allow businesses to deduct employee wages from their tax liabilities. Doesn’t this amount to a hidden 9% payroll tax (though without some of the payroll taxes’ distorting effects?) If I’m wrong I’ll apologize (to the extent I’m wrong), but when we calculate how the 9-9-9 plan will impact worker living standards, most analyses look at how the flat 9% income tax + 9% sales tax impact employees vs. the the payroll taxes and income tax that workers currently pay. These analyses show that the 9-9-9 plan turns out to be a bad deal for some substantial fraction of workers (the working poor and middle-class workers with children.) Depending on how you account for the impact of the business flat tax, 9-9-9 might be an even worse deal.
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