This took longer to write than Rick Perry's tax plan

When Rick Perry announced that he would soon be releasing a tax plan, I was excited to see what he and his staff would come up with. I was fully expecting that it would be some kind of a flat tax that would attempt to compete with Herman Cain's 9-9-9 plan (which you can read my analysis of by clicking here). I did not expect to like the plan, but I was ready to read it, analyze it and write my thoughts. As of this moment, I have spent more time writing this piece than Rick Perry did developing his tax plan.

Rick Perry gives his plan two thumbs up. The rest of us give it little consideration.

Rick Perry's plan is simple. If you pay less than 20% of your income in federal income tax right now, you can completely and totally ignore Perry's plan. If you pay more than 20%, you can now choose to pay 20% instead. So in reality, all Rick Perry's plan does is lower the top tax bracket from 35% to 20%. His plan helps those who are least in need of help and does little or nothing for anyone else.
I have to wonder, was Rick Perry sitting on the john when he came up with this? Did he jot it down on a cocktail napkin while he was waiting for a beer at a bar? Did 'Joe the Plummer' pull this one our of a toilet before he announced his run for congress? I think someone might have come up with it and flushed it, because it isn't worth the cocktail napkin it was written on.
I wish I could tell you more, but that is basically all there is to Perry's plan. It is yet another example of why he is absolutely unfit to serve as President of the United States of America.

Jose Javier Rodriguez to run for Carlos Lopez-Cantera's Seat

Jose Javier Rodriguez is a lot of things. He is Cuban. He is a Democrat. He is a Harvard Law graduate. He is a Miami native. He is an attorney for Florida Legal Services. And now, he is a candidate for the Florida House of Representatives (D-113).

His newly launched campaign website, JoseJavier2012.com, modestly mentions his Harvard background a chooses to focus more on his personal background, which is quite impressive.
Following graduation from Harvard law school, Jose Javier turned down the big-money offers and instead, returned home to Miami to give back to his community. He went to work for Florida Legal Services, helping people who could not afford to pay for a lawyer.
Rodriguez is likely in for a tough race. Though he has yet to draw an opponent, he is running in what has long been a Republican seat, though the trends suggest that could be changing. The seat is currently held by four term Representative Carlos Lopez-Cantera, a heavy hitter in within the Florida Republican hierarchy. Lopez-Cantera is termed out.
Rodriguez is fast at work collecting petitions to qualify for the seat. While he can't know for sure where his district lines will be drawn until the redistricting process is completed, he is not letting it stop his campaign from getting going. He has a assembled a strong team of friends, family and activists that are ready to work to make him the next Representative from District 113.
If you are interested in meeting Jose Javier Rodriguez, he will be at the Miami-Dade Young Democrats meeting this Tuesday, October 25, 2011 at 6:30 PM. The meeting will take place at City Hall The Restaurant - 2004 Biscayne Blvd.
Will Jose Javier Rodriguez, the guy who turned down big money to make a big difference in his community be the next representative from district 113? I sure hope so.

Want to follow Jose Javier's campaign?

Jose Javier Rodriguez's Facebook Page

Jose Javier's Campaign Website

9-9-9 or 911? Breaking down Herman Cain's 9-9-9 Plan

9-9-9

Herman Cain's 9-9-9 plan has become a major national discussion. We all know that our tax system is far too complicated and often results in the wealthiest Americans being able to skirt taxes because they can afford the best accountants. Is the system broken? Absolutely. Should it be simplified? There is no argument, it should. Is Herman Cain's 9-9-9 plan the way to do it? Absolutely not!

First, lets break down the plan itself. Under Herman Cain's 9-9-9 plan there would be:

A 9% personal income tax on all Americans.
A 9% corporate income tax.
A 9% national sales tax.

Pretty simple? Yes. So what is wrong with Herman Cain's 9-9-9 plan? It not only generates less total revenue, but it punishes Americans who earn less.

According to Bloomberg News, Herman Cain's 9-9-9 plan would generate approximately $200 billion less than the current tax system. Though Cain has said that he disagrees with their analysis, he has not shown what is wrong with it. In a time when our national debt has grown to record levels, decreasing revenue is the last thing that we can afford to do.

Lets run through a simple comparison:

Sam is married with two children. Sam earns $40,000 a year. Sam's spouse earns $30,000 a year. Under the Cain 9-9-9 plan, they would pay $6,300 in federal income tax.

Pat is married with two children. Pat earns $2,000,000 a year. Pat's spouse earns $750,000 a year. Under the Cain 9-9-9 plan, they would pay $247,500 in federal income tax.

That seems fair, right? So what is the problem?

The problem is the 9% federal sales tax. With a $70,000 a year income, Sam's family is going to have to spend the vast majority of their income to pay their household bills and living expenses. With a nearly $3 million income, Pat's family will likely be spending a significantly lower percentage of their income. Pat's family will save a lot more money.

If Sam's family saves 10% ($7,000) of their pre-tax income, they would pay $6,300 in federal income tax and then an additional $4681.70 in federal sales tax. That totals out to approximately 15.69% ($10,981.70) of their total income being paid in federal tax.

Pat's family is in a much better financial situation than Sam's. They can live a much more luxurious lifestyle while saving a higher percentage of their income. Lets say that Pat's family saves 20% ($550,000) of their pre-tax income. They would pay $247,500 in federal income tax and then an additional $161,220 in federal sales tax. That totals out to approximately 14.86% ($408,720) of their total income being paid in federal tax.

My point here is simple. The less you make, the higher percentage you pay. Someone earning $20,000 a year has to spend a much larger portion of their income than someone earning millions. The Cain plan splits taxes between what you earn and what you spend. A person who has to spend all that they earn gets double-taxed. A person that can afford to save more does not get double-taxed on what they don't spend.

The tax code needs to be such that is scales so that those who can most afford to pay taxes carry the heavy burden while those who can least afford it carry a lesser burden.

We have certain items that we don't tax, such as groceries. Why? Because we don't want to add to the burden of putting food on the table for a low-income family. Under Herman Cain's plan, all purchases would be taxed.

I give Herman Cain credit for coming up with a system that makes the tax code transparent and easy to understand. But a system that taxes the poor at a higher rate than the wealth is simply unfair.

I guess we need to go back to the drawing board.

*DISCLAIMER: The math used in this piece does not factor state or local sales tax or state income tax. It also does not factor money spent outside of the USA.*