Most people who work get paychecks from businesses. Net compensation to about 150 million Americans in 2009 came to $5.9 trillion.
The businesses who pay all these people will no longer be able to deduct the cost of labor from their corporate taxes under the 999 plan, so business will pay a 9 percent tax on its cost of labor.
Once businesses pass through the wages, the workers now pay a 9 percent tax on this money which now becomes income to them, which, however, has already been taxed once at 9 percent as income to the businesses.
Whereupon, with what's left after being taxed twice, the workers now buy things in the marketplace from businesses and pay a 9 percent national sales tax without exception, thus exposing the same money to a third round of taxation.
Over the weekend Herman Cain has maintained here that his plan "is fair and neutral, taxing everything once and nothing twice."
On the contrary, much of the income is taxed three times.
