This paper computes the tax bases for the following three tax reform proposals: a business
transactions tax; a comprehensive factor income tax (flat personal income tax); an expanded
retail sales tax (Fair Tax). In this paper, we find the revenue neutral tax rate, assuming no
growth effects, and assuming no exemptions, deductions or credits. Recognizing that relief for
low income taxpayers will inevitably be part of any tax reform, we also estimate tax rates
assuming that each plan will provide a refundable credit equal to the tax rate times the poverty
level. (This amounts to subtracting the identical amount from each tentative tax base.) Finally,
we will combine the three bases to examine four hybrid proposals that split the rate between
each of the combined bases. Specifically we will examine a variant of the Laffer/Moore Tax
that combines the business transactions tax and a flat personal income tax and a plan that
combines all three bases.
This is from Herman Cain's web site. I found it here
http://www.hermancain.com/docs/999_Scoring_Report.pdfRecognizing that relief for
low income taxpayers will inevitably be part of any tax reform, we also estimate tax rates
assuming that each plan will provide a refundable credit equal to the tax rate times the poverty
level. (This amounts to subtracting the identical amount from each tentative tax base.)
They are telling you that it will include breaks for the poor.