Study: Cain tax plan raises taxes on 84 percent (AP)

WASHINGTON ? Herman Cain's 9-9-9 tax plan would raise taxes on 84 percent of U.S. households, according to an independent analysis released Tuesday, contradicting claims by the Republican presidential candidate that most Americans would see a tax cut.

The Tax Policy Center, a Washington think tank, says low- and middle-income families would be hit hardest, with households making between $10,000 and $20,000 seeing their taxes increase by nearly 950 percent.

"You're talking a $2,700 tax increase for people with incomes between $10,000 and $20,000," said Roberton Williams, a senior fellow at the Tax Policy Center. "That's huge."

Households with the highest incomes, however, would get big tax cuts. Those making more than $1 million a year would see their taxes cut nearly in half, on average, according to the analysis.

Among those in the middle, households making between $40,000 and $50,000 would see their taxes increase by an average of $4,400, the report said. Those making between $50,000 and $75,000 would see their annual tax bill go up by an average of $4,326.

"It's very, very regressive compared to the current system, and that's largely because we're exempting capital gains, and we're taxing your spending with the sales tax," Williams said. "People at the top end don't spend all their money and they get a lot of capital gains, so they are doing pretty well here."

Cain's plan would scrap current taxes on income, payroll, capital gains and corporate profits. He would replace them with a 9 percent tax on income, a 9 percent business tax and a 9 percent national sales tax.

Cain has acknowledged that taxes would increase for some but says taxes would decrease for most.

"Some people will pay more, but most people would pay less is my argument," Cain said Sunday on NBC's "Meet the Press." "Who will pay more? The people who spend more money on new goods. The sales tax only applies to people who buy new goods, not used goods. That's a big difference that doesn't come out."

The Tax Policy Center is a research group formed by two Washington think tanks: the Urban Institute and the Brookings Institution. Researchers at the center regularly testify before Congress on tax policy. The center's analyses during the 2008 presidential campaign were widely circulated.

Source: http://us.rd.yahoo.com/dailynews/rss/politics/*http%3A//news.yahoo.com/s/ap/20111018/ap_on_el_pr/us_cain_tax_analysis

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