The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- Herman Cain's proposal to replace all federal taxes with a 9% income tax, 9% national sales tax and 9% corporate tax makes good economic sense. This plan would impose the least administrative costs for raising the money needed to finance the federal government, better promote growth than the current tax system and be a darn sight fairer than the current burdensome and complex personal and corporate taxes structures.
Administrative CostsThe current tax code imposes enormous compliance costs on private individuals and businesses. The vast array of complex deductions and credits intended to encourage private citizens to do more of some things and less of others have made accounting and tax law two of the most stable and recession-proof professions on the planet. Follow TheStreet on Twitter and become a fan on Facebook. Simply wiping away all those loopholes not only permits a much lower and more certain average rate of taxation for all individuals and businesses, but it would also eliminate the costs of millions of hours of private tax professionals time from annual filings and require fewer employers monitoring and auditing the returns of honest taxpayers. IRS agents could spend more time chasing tax evaders and get along with fewer employees in the bargain.
Economic GrowthThe current personal income and corporate tax system -- with marginal rates up to 35% -- is full of incentives that reward individuals and businesses for investing to get the biggest tax write-offs instead of pursuing the soundest commercial opportunities. By closing virtually all loopholes and lowering rates, 9-9-9 would make such tax prospecting obsolete and increase after-tax profits for growing businesses and creating jobs. It would encourage investing to make products people want to buy rather than engineering balance sheets to avoid the tax collector.
|Former Godfather's Pizza CEO Herman Cain|