GOP Presidential candidate Herman Cain is stopping in Lynchburg and Richmond this weekend, and has proposed scrapping the current federal tax system and replacing it with a 9% flat tax on personal and corporate income and a 9% national sales tax. ProgressVA has assembled a fact sheet on his economic proposals, highlighting impacts that have been largely overlooked as he has surged in the GOP nomination field:

Economists agree: Cain’s plan constitutes a regressive tax policy that would hit the poor and the middle class significantly harder than the rich.

According to Politifact, “Most economists agree that a national sales tax would raise the relative tax burden on low- and middle-income earning taxpayers.” William Gale, a senior fellow at the Brookings Institution, explains that’s because lower earners spend more of their income than high-income households, who retain more disposable income for savings. (Source: Politifact)

Furthermore, top individual earners would see a reduction in their federal tax rate from 35% to just 9%, as well as an elimination of taxes on investment income, like capital gains. “It would be the biggest tax shift from the wealthy to the middle-class in the history of taxation, ever, anywhere, and it would bankrupt the country,” said Center for American Progress Vice President for Economic Policy Michael Ettlinger. (Source: ThinkProgress)

Edward Kleinbard, a former chief of staff to the congressional Joint Committee on Taxation, described the plan thusly: “In practice, it will have the same economic effect as a 27 percent uncapped payroll tax.” He further added that Cain’s plan would amount to a huge tax hike for the working poor.” (Source: BusinessWeek)

9-9-9 plan would explode the federal deficit

Contrary to Cain’s claims that his economic proposal is revenue-neutral, analysts on the right and left agree it would significantly decrease federal revenues. In fact, if Cain’s plan had been in effect for the 2010 fiscal year, it would have added $500 billion dollars to the deficit. The conservative National Review found the plan to be based on unreasonably large economic growth projections, leading Editor Kevin Williamson to write “If Mr. Cain’s team is building in some growth assumptions into the fiscal forecasts, they must be sunny indeed.“ (Source:TPM)

The Cain plan would eliminate funding for Social Security and Medicare, jeopardizing the future of both programs on which millions of Virginians rely

Millions of Virginians rely on Medicare and Social Security for economic security. Cain’s 9-9-9 plan would eliminate the payroll taxes that constitute a dedicated funding stream for these programs. Without that dedicated funding source, Social Security and Medicare would draw on general funds, leaving a massive budget shortfall that would require extreme cuts or elimination of programs. The 1,155,428 Virginians that currently rely on Medicare and the 1,382,164Virginians that depend on Social Security deserve better than government gambling with their futures. (Source:Mathematica Policy Research analysis of CMS State/County Market Penetration Files)