Oct. 21 (Bloomberg) -- Republican presidential candidate Herman Cain said Americans in poverty would be exempt from his so-called 9-9-9 tax plan, days after an independent analysis found the proposal would mostly benefit high earners.
“If you are at or below the poverty level, your plan isn’t 9-9-9,” Cain said in a speech today in Detroit. “It’s 9-0-9.”
The U.S. Department of Health and Human Services set the 2011 poverty level at $22,350 for a family of four. Cain didn’t specify whether his plan would exempt the first $22,350 of income for all taxpayers or would apply only to those whose income falls below that level.
The 9-9-9 plan would eliminate most of the current U.S. tax code and replace it with a new 9 percent sales tax along with 9 percent levies on individual and business income.
The proposal, which has catapulted Cain to the top of the polls in the race for the 2012 Republican presidential nomination, has been criticized for raising taxes for lower- and middle-income Americans while cutting them for the wealthy. Cain’s comments today were intended as a rebuttal to that criticism.
‘Help the Poor’
“Another way we help the poor is that we get this economy going so we can let people find jobs,” he said.
The nonpartisan Tax Policy Center said Oct. 18 that the plan would cut taxes for almost 95 percent of taxpayers with annual cash income exceeding $1 million while 95 percent of Americans with cash income between $30,000 and $40,000 would face a larger tax bill than they currently pay. The analysis didn’t consider the poverty provisions as there weren’t details about the program at the time.
Cain today also expanded upon his plan to provide tax deductions to businesses and individuals located in so-called empowerment or opportunity zones. He said businesses in designated areas could deduct payroll expenses.
Until today, Cain hadn’t outlined the benefits he would provide in the zones. His campaign still hasn’t outlined the criteria that would be used to designate these areas.
Cain has said the 9-9-9 plan won’t lose revenue for the U.S. He built in room to allow for tax benefits directed at the poor while keeping rates at about 9 percent. An analysis his campaign distributed Oct. 12 said tax rates could be as low as 7.3 percent without any poverty program.
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