Wouldn't Citizen Cain's 9-9-9 Plan Discourage Consumption?
The economy is already suffering from a massive lack of aggregate demand. If you added a nine percent sales tax it would discourage consumption and reduce demand. Here's a quick example. That Ford Fusion Joe Six Pack wants to buy in California with a sticker price of $20,000.00 now cost a whopping $23,600.00 (9.0% CA sales tax and 9% Cain Tax).
He actually doesn't apply sales tax to used items. So in your car example, there would be a heavy incentive (1800) to buy used instead of new. The same would apply with housing. A new house costing 200,000 would have a 18k Cain tax upon it while an existing 200k house would have no such tax.
that new car has 3 or 4 miles on, so it's really used. the new house had workers sleep in it one night, so it's really used. only a few things like food and underwear would be new and subject to the tax.
6. A national sales tax could only work if we made the corporations eat the difference.
But that would entail a complete regulation of how much corporations are allowed to charge for products. I don't think hardly anyone would be on board with that.
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