I am an accountant at a Big Four public accounting firm, so how did I come to believe that the FairTax is one of the best ideas that this country has ever conceived?
I first heard about the FairTax in the 2008 primary election cycle. The FairTax actually was the subject of a question in one of the primary debates. Over a period of several years, I researched the FairTax and read several FairTax books. While lamenting that I was having to stay up until 2:00 a.m. for weeks trying to obtain, accumulate, organize, research and ultimately prepare my family’s tax return, I reached the conclusion that there had to be an easier way for our country to collect the funds needed to run our government.
The facets of the FairTax that won me over include, but are not limited to:
1. All tax returns and the IRS are eliminated. It’s a simple consumption tax we pay at the register and it eliminates the exclusions, exemptions, loopholes and special treatment many currently receive, thanks to the multi-billion dollar lobbyist industry, which all goes away.
2. Our working poor in the U.S. are treated much more fairly than our regressive payroll taxes (FICA and Medicare), which take nearly 8% of each wage earner’s money up front prior to receiving their paycheck. Approximately 40% of our U.S. Treasury’s tax receipts come from this regressive payroll tax. The FairTax designates a certain percentage of its collections specifically for Social Security and Medicare.
3. The FairTax eliminates embedded taxes and tax compliance costs that reside within every good and service we currently purchase, which would have the tremendous effect of reducing our trade deficit since our U.S. goods would not be burdened with an estimated 22% of embedded tax costs, when sold abroad. This also encourages businesses to relocate to the U.S. as the world’s greatest tax haven with no corporate income tax and no taxes on goods produced, since the FairTax is only charged at the retail (end consumer) level and not on business to business purchases.
4. Tax evasion is drastically reduced under the FairTax. Over $600 billion per year is currently under collected by the IRS, which is projected to cumulatively reach $9 trillion over the 2017-2026 10-year period, based on a recent tax evasion study. U.S. corporate earnings parked offshore would be readily repatriated without income tax consequences, which would be a shot in the arm to the U.S. economy.
5. The tax base expands to $9 trillion under the FairTax, relative to the current $5 trillion income tax base. Al Capone’s famous quote that “They can’t collect legal taxes from illegal money” becomes a falsehood, since everyone in the U.S., whether here illegally or operating underground criminal enterprises, pays their full U.S. federal tax burden as they consume daily goods and services.
6. Our elected officials could focus on actual issues facing our nation, and the act of dividing our country by using a weaponized IRS bureaucracy of 88,000 employees and the tax code to pit one group against the other would cease.
As it relates to accounting firms, while tax services would no longer be a relevant service for our clients, the influx of new U.S. businesses, expansion of existing businesses and related growth in transactions represents a tremendous opportunity for accounting firms under the FairTax. This shift in firms’ earnings from income tax-related services to more transaction-based, consulting and audit-related services represent an opportunity for accounting professionals to add value to their clients in more meaningful and long-lasting ways that no longer benefit the client’s income tax obligation, but benefit society as a whole, as businesses get back to solving important problems, innovating, expanding, growing and developing the next generation of products and services that will re-shape the world in the 21st century.
Jade Walle is a partner in the Assurance practice of the Denver office of a Big Four public accounting firm. He has 21 years of experience in financial statement audits of domestic and non-U.S. public and private companies. In 1996, Jade began his career with his firm in Tulsa, Oklahoma, transferring to the firm's capital markets group in London, in 1999. There, Jade assisted non-U.S. companies accessing the U.S. capital markets (e.g., IPO’s, debt offerings, acquisitions and carve-out financial statements). Jade then repatriated to the firm’s Houston office in 2002, serving SEC registrants in the energy space and relocated to Tulsa in 2008, to serve companies in multiple industry segments, but primarily in the energy sector. In the summer of 2016, Jade relocated to the firm’s Denver office, to serve SEC registrants in the MLP, exploration and production and mining segments.
Jade is involved in a variety of community activities including serving on the Oklahoma State University School of Accounting advisory board and serving on the Board of Directors for Centerwill, an outreach organization that focuses on orphans and displaced children and mothers in third world countries. Jade also served on the Board of Directors of Junior Achievement of Tulsa, prior to relocating to Denver last summer. He is a graduate of Oklahoma State University with a Bachelor of Science and a Master of Science in Accounting. Jade is a CPA, certified in Oklahoma, Texas and Colorado, and is a member of the American Institute of Certified Public Accountants, the Oklahoma Society of CPAs, and the Texas Society of CPAs.
Jade has been married to his lovely wife Kim for 19 years and has two beautiful girls, Sophia who is 13, and Zoe who is 11. Jade and Kim adopted their son Vitalik, in February 2014 from Ukraine, who is now 19 years old. Jade’s personal interests include his faith in Christ, spending time on vacation with his family, tennis and basketball.
I first heard about the FairTax in the 2008 primary election cycle. The FairTax actually was the subject of a question in one of the primary debates. Over a period of several years, I researched the FairTax and read several FairTax books. While lamenting that I was having to stay up until 2:00 a.m. for weeks trying to obtain, accumulate, organize, research and ultimately prepare my family’s tax return, I reached the conclusion that there had to be an easier way for our country to collect the funds needed to run our government.
The facets of the FairTax that won me over include, but are not limited to:
1. All tax returns and the IRS are eliminated. It’s a simple consumption tax we pay at the register and it eliminates the exclusions, exemptions, loopholes and special treatment many currently receive, thanks to the multi-billion dollar lobbyist industry, which all goes away.
2. Our working poor in the U.S. are treated much more fairly than our regressive payroll taxes (FICA and Medicare), which take nearly 8% of each wage earner’s money up front prior to receiving their paycheck. Approximately 40% of our U.S. Treasury’s tax receipts come from this regressive payroll tax. The FairTax designates a certain percentage of its collections specifically for Social Security and Medicare.
3. The FairTax eliminates embedded taxes and tax compliance costs that reside within every good and service we currently purchase, which would have the tremendous effect of reducing our trade deficit since our U.S. goods would not be burdened with an estimated 22% of embedded tax costs, when sold abroad. This also encourages businesses to relocate to the U.S. as the world’s greatest tax haven with no corporate income tax and no taxes on goods produced, since the FairTax is only charged at the retail (end consumer) level and not on business to business purchases.
4. Tax evasion is drastically reduced under the FairTax. Over $600 billion per year is currently under collected by the IRS, which is projected to cumulatively reach $9 trillion over the 2017-2026 10-year period, based on a recent tax evasion study. U.S. corporate earnings parked offshore would be readily repatriated without income tax consequences, which would be a shot in the arm to the U.S. economy.
5. The tax base expands to $9 trillion under the FairTax, relative to the current $5 trillion income tax base. Al Capone’s famous quote that “They can’t collect legal taxes from illegal money” becomes a falsehood, since everyone in the U.S., whether here illegally or operating underground criminal enterprises, pays their full U.S. federal tax burden as they consume daily goods and services.
6. Our elected officials could focus on actual issues facing our nation, and the act of dividing our country by using a weaponized IRS bureaucracy of 88,000 employees and the tax code to pit one group against the other would cease.
As it relates to accounting firms, while tax services would no longer be a relevant service for our clients, the influx of new U.S. businesses, expansion of existing businesses and related growth in transactions represents a tremendous opportunity for accounting firms under the FairTax. This shift in firms’ earnings from income tax-related services to more transaction-based, consulting and audit-related services represent an opportunity for accounting professionals to add value to their clients in more meaningful and long-lasting ways that no longer benefit the client’s income tax obligation, but benefit society as a whole, as businesses get back to solving important problems, innovating, expanding, growing and developing the next generation of products and services that will re-shape the world in the 21st century.
Jade Walle is a partner in the Assurance practice of the Denver office of a Big Four public accounting firm. He has 21 years of experience in financial statement audits of domestic and non-U.S. public and private companies. In 1996, Jade began his career with his firm in Tulsa, Oklahoma, transferring to the firm's capital markets group in London, in 1999. There, Jade assisted non-U.S. companies accessing the U.S. capital markets (e.g., IPO’s, debt offerings, acquisitions and carve-out financial statements). Jade then repatriated to the firm’s Houston office in 2002, serving SEC registrants in the energy space and relocated to Tulsa in 2008, to serve companies in multiple industry segments, but primarily in the energy sector. In the summer of 2016, Jade relocated to the firm’s Denver office, to serve SEC registrants in the MLP, exploration and production and mining segments.
Jade is involved in a variety of community activities including serving on the Oklahoma State University School of Accounting advisory board and serving on the Board of Directors for Centerwill, an outreach organization that focuses on orphans and displaced children and mothers in third world countries. Jade also served on the Board of Directors of Junior Achievement of Tulsa, prior to relocating to Denver last summer. He is a graduate of Oklahoma State University with a Bachelor of Science and a Master of Science in Accounting. Jade is a CPA, certified in Oklahoma, Texas and Colorado, and is a member of the American Institute of Certified Public Accountants, the Oklahoma Society of CPAs, and the Texas Society of CPAs.
Jade has been married to his lovely wife Kim for 19 years and has two beautiful girls, Sophia who is 13, and Zoe who is 11. Jade and Kim adopted their son Vitalik, in February 2014 from Ukraine, who is now 19 years old. Jade’s personal interests include his faith in Christ, spending time on vacation with his family, tennis and basketball.