It seems to be common agreement that Presidential candidates will offer only plain vanilla tax reform plans. They don’t want to offend any special interests and also don’t want to be forced to answer specific questions. They can respond to questions by saying things like, “That will have to be worked out but we will certainly ensure ….”
Mike Huckabee was an exception and boldly proposed real tax reform, the FAIRtax. However, he was not able to get any traction in the 2016 primaries. Trump and Clinton have both taken the “don’t rock the boat” approach.
Hillary Clinton’s Ultimate Tax Reform Plan?
Many people have speculated as to the type of tax reform that Hillary Clinton, if elected and given the opportunity, might promote. While Mrs. Clinton may have many detractors, the fact is that she is an intelligent woman and will see that the present income tax/payroll tax system is falling apart. She will see that the growing evasion is focusing more and more of the tax burden on W2 employees who have their taxes withheld. Since many of her constituents are W2 employees, she will be sensitive to this and since she wants to have money coming to fund all of her programs she will look to a better form of taxation.
It is likely that Mrs. Clinton will be attracted to The Progressive Consumption Tax (PCT) introduced by Senator Ben Cardin (D-MD). Senator Cardin is a strong supporter and trusted friend of Mrs. Clinton. He will have her ear.
While the exact rates are not determined, the PCT adds a 10% sales tax on goods and services to the present system. It has a personal income tax component but provides an income tax exemption, called a “family allowance,” of $100,000 for joint filers, $50,000 for single filers, and $75,000 for head of household filers. Under the current proposal it also retains the corporate income tax but lowers the rate to 17%.
Sales Tax Portion
The sales tax is actually modeled on the goods and services tax used by the Organization for Economic Cooperation and Development (OECD) countries—our primary trading partners. This means that instead of only being paid at the retail level, like the FAIRtax, the PCT is actually a subtraction method value added tax (VAT), collected at each step of production.
Like the FAIRtax, the PCT only taxes goods and services that are consumed in the U.S., and exports are not subject to the tax. However, because the PCT is a VAT, exporters would need to file for a credit for the previously paid PCT on inputs. Like the FAIRtax, imports of goods and services would be subject to the tax.
Finally, the PCT will have a rebate that is intended to offset the loss of tax benefits like the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and the Additional Child Tax Credit (ACTC). Unlike the FAIRtax prebate, the PCT rebates are based on earned income or adjusted gross income, family size, and filing status and it is a rebate, paid when the tax return is filed, not monthly.
Personal Income Tax
People who have income in excess of their family allowance will be taxed at three rates. 15 percent on taxable incomes of $0 to $50,000 for single people and $0 to $100,000 for joint filers, 25 percent on taxable incomes of $50,000 to $250,000 for single people and $100,000 to $500,000 for joint filers, and 28 percent on taxable incomes over $250,000 for single people and over $500,000 for joint filers.
In addition to the family allowance, taxpayers will have: (1) the charitable contribution deduction; (2) the state and local tax deduction; (3) health and retirement benefits; (4) the mortgage interest deduction.
Corporate Income Tax
While the present PCT contains the present corporate income tax with the rate reduced to 17%, Senator Cardin has apparently told audiences that he believes that it should be replaced by a VAT—like in Europe. This would greatly enhance the border-adjustable benefits of the PCT.
IRS and Tax Filings
Because the PCT is a VAT, and calculates the PCT rebate based on income and retains the personal income tax, there will still be a requirement to file tax returns and to have the IRS to enforce the law.
Conclusion
There are some positive benefits, from an economic point of view and in theory, of going to the PCT. However, here are some things that the PCT doesn’t do:
- Eliminate the need to file almost 200 million federal tax returns
- Eliminate 90% of the cost of tax compliance
- Eliminate the ability for the next Congress to keep reducing the family allowance to the point where all earners are paying not only the new goods and services tax but also the income tax
- Eliminate the corporate tax and the ability of Congress to sell tax benefits to companies
- Eliminate the IRS
- Eliminate the ability to see the true cost of government like you would with the FAIRtax
It is important for all FAIRtax supporters to understand that we have to redouble our efforts to ensure that the FAIRtax is the tax reform that is passed next year. If the PCT becomes the 2017 Tax Reform, then the chances of true tax reform will be delayed for a number of years and in a few years all of us will be paying income tax, sales tax and a VAT.
This will lead to more and more evasion and less and less respect for law. If it is ok to violate the income tax law, why is it not ok to violate other laws—like the ones against theft or attacks on the police? When society breaks down, it breaks down in all areas.
In the U.S. we value our freedom, but freedom brings responsibility. We will do well to recall the words of Pope John Paul II, When freedom does not have a purpose, when it does not wish to know anything about the rule of law engraved in the hearts of men and women, when it does not listen to the voice of conscience, it turns against humanity and society.
1040 Club and Your Donations (Investments)
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.
New FAIRtax Book
Do you know of someone who would like to learn the basics of the FAIRtax but is not an avid user of social media? Perhaps someone who would prefer to read a booklet either in print or electronic form? If so, we have just what they need. The title is America’s Big Solution which is available in both print and electronic formats. America’s Big Solution was written by Florida volunteer Terry Tibbetts in an effort to reach people who lean toward getting more information than you can fit into a 140 character “tweet" or a Facebook post. America’s Big Solution will take the reader through a brief but thorough introduction to the FAIRtax and give suggestions for further study.
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
NEW Store Item --- ABS Vinyl Bumper Stickers
PLUS 25% off on all FAIRTAX Banners plus many items going on BOGO sale for September.
We will start running BOGO specials soonest for the months of September and October. Super Deals, so watch the Store frequently!
Now is the time to spread the word and present our FAIRtax logo to the public.
Your FAIRtax Store is ready to meet your promotional needs as we move out of the Convention season and into the final phases of electing a new USA President.
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
When is the last time your heard Thomas Jefferson on the radio or in a podcast? He recently visited the FAIRtax Power Radio studio - twice!
FAIRtax Power Radio is the brainchild of Bob Paxton, 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 and be affected by every aspect of American life.
FAIRtax Power Radio has been around for almost two years, but a few months ago, we had a new beginning. We moved our main distribution platform to Spreaker where you can listen to and download our 30 minute podcasts for free.
Last April, when we moved to Spreaker, we decided to start from scratch and reintroduce the FAIRtax from the beginning to our listeners. In the first few episodes, you will hear details of the immense problems with the current income tax system and why it cannot be fixed. In fact, it’s so serious that even Thomas Jefferson gets involved in the discussion in episode 3. Then you’ll hear the most important aspects of the FAIRtax explained by Bob “Paxworthy” using his “You Might Be A FAIRtax Fan!” routine. We have interviews with various people such as a local business man, a Congressman and a member of the Board of Directors of Americans For Fair Taxation. We have examples of some of the wackiest tax deductions allowed by the IRS and the tax courts. We have analyzed the proposed tax reforms that the House Ways & Means Committee titled “A Better Way” and explained why it’s not “the best way.” In episode 18, Thomas Jefferson returns five years after his first visit however this time, the FAIRtax is the law of the land. A new episode is posted every Friday morning but you can tune in at anytime that is convenient to you.
If you’re an iTunes user, you can find FAIRtax Power Radio in the podcasts section of the iTunes store. Again, it is free and you can listen and/or download the podcasts at any time.
Both Spreaker and iTunes are available for your smartphones using the free apps. We are also working to get FTPR on other platforms such as iHeart Radio and TuneIn; more on those efforts at a later date.
Since our move to Spreaker and iTunes, we have increased our listenership but we need more, many more people to listen to FAIRtax Power Radio if we are going to force Congress to adopt the only REAL tax reform in front of them. YOU can help to inform the American people by not only listening to FTPR but also by sharing this information and these links with everyone in your contact list.
As The FAIRtax Guys say in every episode, 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!
