9 9 9 tax plan

That’s because two of Cain’s three 9s – the income tax and the national sales tax -- would disproportionately impact the 47% of tax filers who don’t pay any federal income tax under the current system – many of whom are elderly or poor.

The extra money paid by these people would in effect subsidize the huge tax break for wealthier Americans who currently pay as much as 35% in federal income tax.

And for the middle class – that shrinking group of consumers whose spending on goods and services is key to keeping the economy rolling – the 9% sales tax might discourage purchases on non-essential items. Or, as Cain himself has suggested, it might encourage them to buy used goods instead, which he says would be exempt from the tax.

There is no such exemption for necessities like groceries. So, poor people who can only afford to spend on basic needs would see their cost of living increase 9%.

Cain has argued that wage earners would save considerably because his plan abolishes the payroll taxes that pay for Social Security and Medicare.

“You have to start with the biggest tax cut a lot of Americans pay, which is the payroll tax, 15.3%,” Cain said, defending his plan at the Tuesday debate. “That goes to 9%. That is a 6 percentage point difference. And the prices will not go up. So they have got a 6 percentage point difference to apply to the national sales tax piece of that.”

But what Cain failed to mention is that employers today pick up half the cost of the payroll tax.  Under the Cain plan, employers would save their half of payroll taxes while employees would pay a higher percentage in the form of income tax.