9-9-9 Abracadabra, Presto Change-o Poof!

Paul Krugman has posted the Tax Policy Center's analysis of Herman Cain's 9-9-9 plan. TPC's analysis doesn't even address the "what becomes of Social Security and Medicare without the payroll tax" question. Here is Krugman's post with links to the sources:

October 18, 2011, 5:27 pm

TPC Does Herman Cain

The Tax Policy Center has the distributional analysis of 9-9-9. It’s awesome:

Howard Gleckman summarizes:

A middle income household making between about $64,000 and $110,000 would get hit with an average tax increase of about $4,300, lowering its after-tax income by more than 6 percent and increasing its average federal tax rate (including income, payroll, estate and its share of the corporate income tax) from 18.8 percent to 23.7 percent. By contrast, a taxpayer in the top 0.1% (who makes more than $2.7 million) would enjoy an average tax cut of nearly$1.4 million, increasing his after-tax income by nearly 27 percent. His average effective tax rate would be cut almost in half to 17.9 percent. In Cain’s world, a typical household making more than $2.7 million would pay a smaller share of its income in federal taxes than one making less than $18,000. This would give Warren Buffet severe heartburn.