WE HAVE SEEN THE MOVIE MANY TIMES AND THE ENDING IS ALWAYS THE SAME
Once again, it is popular for Republicans and Democrats to demand tax reform. Of course, their definitions of “reform” are often quite different. However, we know one thing for sure. Each time Congress has tried to reform the income tax system, it never stayed reformed.
Like a recovering alcoholic who insists that there is no alcohol in his home, Congress needs to be in the position that they cannot be tempted to undo any reform of the income tax/payroll tax system. We all know that the 1986 “reform” has been amended over 10,000 times. However, this problem started at almost the same time that the first income tax law was enacted.
War Revenue Act of 1917
In February of 1913, the 16th Amendment to the Constitution was deemed ratified and effective. As we know, the 16th Amendment allowed but did not require Congress to introduce an income tax. On October 3, 1913 Congress enacted the Revenue Act of 1913.
Rates started at 1% and increased to 7% on taxpayers making in excess of $500,000. While less than 1% of our citizens made enough income to pay these taxes, the federal government began encroaching on an area long considered none of its business. Up until then, it had been accepted that the federal government had no right to require its citizens to “report” their income and expenses. Since any income tax, whether flat or not, requires this, America’s freedom of privacy from its government started eroding.
Prior to the income tax law, Americans paid their taxes in an indirect manner. (Indirect taxes are paid to someone else who in turn then pays the government. Direct taxes are paid directly to the government by the citizen.)
They paid state sales taxes and they paid government excise taxes on liquor and other purchases. They also paid higher prices for imported goods because of the tariffs and duties placed on imports. To make matters worse, there was no requirement in the 1913 law that tax returns be confidential. This created enough outrage that in 1916 Congress passed a law to keep tax returns confidential.
This is a classic example of Mark Twain’s story on how to boil frogs. If you put them in boiling water, they will jump out. But if you put them in water and slowly turn up the heat, they will eventually stay and be boiled.
Since 99% of Americans were not affected, the rest did not object. But as we know today, Congress kept adding more and more requirements until we are all, using the frog analogy, right and truly boiled.
In 1916, Congress saw that the income tax was a good source of revenue and increased the minimum rate to 2% and 15% for incomes in excess of $1.5 million and taxed some estates and the profits of business. Because of the sudden influx of money generated by this new way of getting money, the 1917 annual federal budget was almost equal to the total budget for all the years between 1791 and 1916.
However, Congress decided that more was needed for the expenses of the war. Just four years after the 16th Amendment was adopted, on October 3, 1917, six months after the United States declared war on Germany, Congress passed the War Revenue Act.
The War Revenue Act only resulted in about 5% of our population paying taxes, but it increased rates on many who were already paying taxes. People making $40,000 were taxed at 16 percent tax rate—a higher rate than the 1916 act imposed on people making more than $1.5 million. The person making $1.5 million saw his or her rate increased to 67 percent. U.S. tax revenues shot up 350% from 1917 to 1918-- $1.01 billion to $3.6 billion.
Conclusion
Of course, until recently Congress justified the tax increases as a “temporary” fix. They don’t bother to do this anymore but just say it is needed to make the system more “fair.” With Congress’ desire to spend money to garner support from their constituencies, more and more money is needed.
The problem with the income tax is that no matter how many times you lop off its head, it grows back. The only way to effectively allow our citizens to again have some control over government revenues and, more important, see the real cost of government, is to rip out the income tax by the roots and burn the roots. Then we can institute a federal tax system that returns control and freedom to the people.
The only real tax reform legislation that accomplishes this is the FAIRtax. The FAIRtax, a true indirect tax, dismembers the income tax apparatus and allows for a greatly reduced Treasury Department that will collect the FAIRtax from the state agencies that in turn collect it from people who make retail purchases. Americans will regain the freedom they enjoyed before 1913 from having to report income and expenses.
In addition, because all of the costs of our federal government are reflected on every purchase we make, all of us for the first time will see the cost of our federal government and see what we are contributing to this cost. Today no one really knows the cost of our federal government because of withholding, increased prices caused by the income tax and the $450 billion cost of complying with the income tax.
The protestations from some Members of Congress that they are seeking a tax reform that will be “permanent” reminds me of the parable of the scorpion wanting the turtle to give him a ride across the river on the turtle’s back. The turtle says, “That is crazy. You will sting me.” To which the scorpion replied, “You are crazy. If I stung you then both of us would die.”
This makes sense to the turtle and the scorpion climbs on the turtle’s shell and they start across the river. In the middle of the river, the turtle feels the sting of the scorpion. Before he sinks beneath the water, the turtles asks the scorpion why it stung him since they are both going to die. In reply the scorpion said, “I am a scorpion. I had to do it.”
We have to remove the ability of Congress to mess with a reformed tax system. They have proven for 100 years that they will continue to change the income tax system regardless of the negative impacts on Americans.
It is time to demand that Congress pass the FAIRtax!
Planes, Steak and Water
I have been letting you know that Autry Pruitt, one of our AFFT directors, has written an entertaining and informative book discussing how he became a supporter of Donald Trump—although he didn’t start as one. AFFT does not endorse either presidential candidate and notes that neither is proposing the FAIRtax as their tax plan.
We include this note because it is important that your vote in November be an informed vote. This book may not make you a Trump supporter, but it will provide accurate information. Autry concludes that he thinks one of the bold ideas that Trump will consider, if elected, is the FAIRtax and explains this.
Finally, he is offering to make a 20% donation to AFFT of the price of each person purchasing a book by hitting this link.
Time to Invest In the FAIRtax and Save America
As, noted above, the longer it takes to replace the income tax/payroll tax system, the harder it will be to save our great country from going the way of other great civilizations and rapidly declining.
When you make a donation to Americans For Fair Taxation “(AFFT”), you are making an investment. You could be investing the money in something else. All of us want to see a return on our investment. We want to see the investment used wisely and that the organization provides what it promises.
AFFT has been working for a long time to educate people about the FAIRtax. We are still running into people who have not heard about the FAIRtax, but what a difference it is from even five years ago. The biggest fear of the D.C. Elites is if the American people realize that they have been “had” and demand common sense reform like the FAIRtax. The Elites know that their “friends” in Congress will desert them if threatened with being thrown out of office.
There is going to be some sort of change in the income tax code in 2017. If AFFT is not demanding, on behalf of you, that Congress not just make a few changes but make real reform, then there will be more of the same and America will continue to lose jobs and more of our children will be living with us because they cannot find jobs.
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments) these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital in 2017.
Please go to this link to invest in AFFT and in your and your family’s future.
America's Big Solution - An Introduction to the FAIRtax
You can help introduce someone to the FAIRtax by informing them of this book. As the title indicates, it is an introduction to the FAIRtax and is directed toward people who may have heard of the FAIRtax but are not really sure of just what it is. Written by Florida volunteer Terry Tibbetts, the book offers a light hearted approach to a serious subject, reforming the federal tax system. America’s Big Solution gives the reader enough information to get them started in their examination of the most thoroughly researched tax reform proposal our country has ever seen. “ABS” is intended for people who may not be attracted to social media for all the latest news and would like to gather their information in a more traditional form that is not limited to a 140 character “tweet” or a Facebook post.
You can find America’s Big Solution on the three most popular platforms -- Amazon, Barnes & Noble and the Apple iBook Store. To purchase the electronic form for the Amazon Kindle or the print form, go to this website. To find it for your Barnes & Noble Nook, go here. And if you’re an Apple user, go to the iBook store at this site. The print version (only available at Amazon) is $9.25 whereas the electronic versions are all priced at $2.99. (Apparently electrons are less expensive than paper and ink!) All royalties go to Americans For Fair Taxation.
Please share this information with everyone you know. The more people know about the FAIRtax, the easier it will be to steer Congress into the only REAL tax reform proposal on the table at this time.
AFFT National LOGO Store
THE FAIRTAX® LOGO STORE
SUPPLYING EDUCATIONAL/PROMOTIONAL ITEMS
October BOGO TIME
PLUS 25% discount on all event banners
Now is the time to get the FAIRtax℠ word and logo in public’s eye. Therefore, we will be offering numerous BOGO’s ( buy one get one free ) for the month of October. Also, we will continue to offer all FAIRtax℠ banners at a 25% discount during the month of October.
Presently, BOGO’s are available on the following promo items:
Palm Cards, Business Cards, Adhesive Bumper Stickers, Magnetic Bumper Stickers,
Event Stickers, Scrolling Banners, Pens, Notepads, Pocket Calendars
EVENT BANNERS
We currently offer four event banner designs and all are available at a 25% discount, a super deal.
Your FAIRtax℠ Store is ready for the October national election time period with GREAT DEALS so you can present the FAIRtax℠ concept and logo at all Presidential campaign stops, at elected representative town halls/events, and all other political meetings plus your own FAIRtax℠ educational meetings.
WWW.FAIRTAXLOGOSTORE.ORG
When visiting the Store, don’t forget to order a supply of FAIRtax palm cards. Besides handing out palm cards at meetings and events, whenever you send mail through the post office, including at least one FAIRtax informational palm card in your envelope. And remember, many entities send you postage paid envelopes for whatever reason. So, why not send them back with an enclosed palm card and a FAIRtax sticker on the outside for all to see - keep spreading the word.
Please take a moment and visit our store by clicking here.
FAIRtax Power Radio
“I have been a supporter of the FairTax since about 2000 and I try to continually educate myself on the strengths of the FairTax as well as the arguments that people use against it. Your podcast is perfect for me to add to my studies.” This is an excerpt from an email The FAIRtax Guys received from Bryan of Tennessee recently and accurately expresses the purpose of FAIRtax Power Radio.
Bob Paxton, the creator of FAIRtax Power Radio, is a Florida volunteer with previous radio experience and someone who is devoted to getting the FAIRtax passed into law as soon as possible. He invited Ron Maiellaro, another Florida volunteer, to join him. Together they are “The FAIRtax Guys” and they have created a series of podcasts that not only introduce the listeners to the FAIRtax but also discuss the many different aspects of the FAIRtax as it relates to the economy, our Constitutional rights, politics, business and anything else that comes to mind. After all, the FAIRtax will affect every aspect of American life.
The free 30 minute podcasts cover all aspects of the FAIRtax including an entertaining introduction, how the FAIRtax increases purchasing power for everyone, how the FAIRtax promotes business, an interview with a Congressman, a comparison of the FAIRtax to the current income tax and the flat tax and even several visits from Thomas Jefferson. The FAIRtax Guys take current events, such as the national elections and discuss how the FAIRtax will help create jobs and improve the economy.
You can listen to FAIRtax Power Radio online or download the podcasts on Spreaker.com or on iTunes. You can also find FTPR on YouTube and SoundCloud.com. All of these platforms have free apps for smartphones so you can listen at any time.
The listenership for FAIRtax Power Radio is expanding but in order to reach out to enough American to create a groundswell of support, we need your help. After enjoying FTPR, please let others know about it by sharing the links and websites in the previous paragraph.
Please introduce everyone you know to FAIRtax Power Radio. As The FAIRtax Guys say in every episode, “The FAIRtax: When you understand it, you’ll demand it!”
Thank You For Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure that AFFT is paid ever larger amounts from people paying for us to send their offers to our supporters.
Again, we are making every effort to ensure that we work with only reputable companies. If you feel that any FAIRtax-sponsored email is objectionable, please email us at info@fairtax.org and tell us why. You can also opt to not receive these sponsored email messages but still receive FAIRtax emails.
Thank you for staying FAIRtax strong!
