Chairman’s Report - February 14, 2020

The Income-Tax
Puts Us All
On Welfare

Nearly everyone reading the above title will wonder if it’s really true, especially as it applies to them.  The word “welfare” has come to mean payments from a government to people who are in need of assistance.  If you are not receiving food stamps or housing assistance payments, you probably don’t think of yourself as being on “welfare”.

However, thanks to the income-payroll-tax-system, every American filing an income-tax return or receiving Medicare is receiving “welfare”.  Here are some examples.

Medicare recipients don’t believe they are receiving “welfare” because they paid into the Social Security & Medicare system for many years and they think they’re simply receiving back what they contributed.

While it’s true in many cases people receive Social Security retirement benefits which are close to the amounts they paid into the system, this isn’t true for Medicare.  A Forbes article cited a study by the Urban Institute and concluded:
  • A male earning an average wage over his lifetime will have paid $61,000 in Medicare taxes and will receive $180,000 in benefits
  • A female earning the average wage will also have paid $61,000 into the system, but she will live longer and receive $207,000 in benefits
  • According to the definition of “welfare” in the 1st paragraph, the government is providing a “welfare” payment to seniors on Medicare, as offensive as this seems to many of us

People Filing Income Tax Returns

Governments don’t create revenue on their own.  A government must first extract the money it needs to operate from its constituents before it can use it to pay for the services those constituents demand and require.

One way a government can provide a payment to its constituents is with a check or a certificate which can be exchanged for goods, like food stamps.  Another way of government providing a payment is by allowing one person to pay less income-tax than another personThis is the way government pays “welfare” to millions of us with the income-tax.

Here are some examples:
  • Married people receive a higher standard deduction and pay taxes on income at a lower percentage rate than single people earning the same amount of income
  • People with lower incomes pay income-taxes at a lower rate than people with higher incomes
  • 10% of federal taxpayers with home mortgage interest, state and local taxes and charitable contributions that add up to more than the standard deduction can itemize those deductions and reduce their taxable income even further
  • Families earning less than $500,000 per year and who have children under 16 receive a $2,000 credit against their taxes for each child, but people with no children under 16 don’t receive the credit
  • Interest paid on personal loans isn’t deductible, but a taxpayer can reduce their taxable income by up to $2,500 of student loan interest
  • Owners of an historic building receive a tax credit of 20% of the renovations
  • Small businesses can reduce their taxable income by 20% of their income
  • Businesses purchasing a vehicle can reduce their taxable income by $10,000 of the cost of the vehicle for the 1st year, up to $16,000 for the 2nd year and up to $9,600 for the 3rd year.  Individuals cannot deduct the costs of acquiring their vehicles at all, and must pay for them with the net remaining after deductions for income-payroll-taxes
  • Businesses purchasing equipment can normally qualify to deduct the full cost of the equipment and reduce their taxable income, thereby providing more income which can be distributed to the owners

In each of these examples, there are literally a thousand more, some taxpayers can reduce their federal income-tax more than other non-similarly situated taxpayers.  This means they are paying less income-tax than other people making the same income.

Although it isn’t entirely true today because of the U.S. government’s ability and willingness to finance spending by increasing the public debt, generally you fund government spending through taxes.  This means if I am allowed to pay less in income-tax, someone else will have to pay more.
Few people would disagree with George Bernard Shaw’s statement, “A government who robs Peter to pay Paul can always depend on the support of Paul”.

“The Ruling Class” & their minions in Congress have worked hard to make each of us believe, thanks to them, we are getting something others aren’t, and we should be very grateful to them.  In fact, they regularly tell us if we aren’t appropriately grateful, they will punish us by taking away some of these deductions and credits that allow us to pay less in income-taxes.

This means we will have less income to meet our needs, and that’s frightening.  That is one of the primary reasons we are supposed to be afraid of repealing the income-tax system.

Like most things stated by “The Ruling Class”, this is UNTRUE!
The FAIRtax
  • Raises revenue for the government in the simplest and most transparent manner possible
  • Provides the prebate/tax credit to all households based on household size, and actually allows lower and middle income families to pay less in taxes than they do now
  • Allows American businesses to be more competitive in the world market, and U.S. prices to be reduced by at least 10%
  • Doesn’t favor the purchase of one new good over another, a favor normally bought and paid for by an industry
  • Greatly reduces the ability of Congress and lobbyists to extort money by selling “tax benefits”
  • Makes it much harder to single out certain groups and threaten to raise their taxes if they don’t behave
  • With the FAIRtax, there is only one rate and any increase would apply to everyone
  • Will grow the economy at an amazingly rapid rate, and will create and protect American jobs and workers
  • Ensures the sustainability of Social Security & Medicare and takes away “The Ruling Class”’ ability to control seniors

The income-payroll-tax-system allows “The Ruling Class” to instruct the bureaucrats and Members of Congress to reward some groups and punish others.  The FAIRtax doesn’t eliminate the ability to make changes but it does make any changes apparent to everyone, which in turn makes those changes much more difficult to enact.

“The Ruling Class” is actually made up of cowards who know they can only control people if they can operate “behind the curtain”.  The FAIRtax exposes them and this is very frightening to any group of despots who fear a revolt of their “subjects”.

It is helpful to recall the words of Alexander Hamilton who, writing under the name Publius, wrote the following in the Federalist Papers 21:

“There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way.  Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them.

The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources.  The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions.

If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects.  In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere.

Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.

It is a signal advantage of taxes on articles of consumption, they contain in their own nature a security against excess.
They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue.

When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, 2 and 2 do not always make 4”.
If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds.
This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them”.

Has anything changed in the past 230 plus years making Hamilton’s words any less applicable to the present United States?  The answer is NO!  Hamilton’s comments are just as true and appropriate today as they were then, and they will reign true into the future.

Although he might object to the amount of The FAIRtax necessary to feed today’s bloated Federal  government, Hamilton and the other Founders of our great nation would rise as one and demand we adopt The FAIRtax—the only “Fair tax”.
The author George Bernard Shaw said these words in a play he wrote, You see things; and you say “Why?”  But I dream things that never were; and I say “Why not?”

Isn’t it time for us to ask, “Why not?” 

President Trump, “Embrace the FAIRtax, the only Fair Tax the only fair tax and the only real tax reform!  Stand up to the Swamp.  They will oppose you anyway because they see you as a threat.  What have you got to lose?”

The truth is the truth.  Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:

“If you want a picture of the future, imagine a boot stamping on a human face—forever.”

Take Back America Again!  Pass The FAIRtax Now!
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Read Evasion Study Summary
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This week's Episode #199 - "Candidate, Sign Our Pledge!"

In this episode, The FAIRtax Guys discuss how to present to candidates for public office to support The FAIRtax. 

It’s an election year and candidates for office are making all kinds of promises.  But there is 1 promise you can get on paper - The FAIRtax Candidate’s Pledge

Now is the time to secure your Representative & their challenger(s) support for The FAIRtax.  Reach out to their campaigns and be persistent!  Be respectful but persistent!

And the best way to be sure they do more than pay lip service to H.R. 25?  Have them sign The FAIRtax Candidate's Pledge which is available online to download and printout by clicking here

It’s all about Volunteer activism.  Watch or listen to this episode for some pointers about working with the candidates and then… go get ‘em!

As always, the AFFT is looking for volunteers to help their efforts.  Watch or listen to see if there is some small way you can help.

There’s always more in FAIRtax Power Radio such as a reminder of the promotional items available now at Our Store and a review of Jim Bennett’s Grassroots Corner Report.
What Can Each Of Us Do?
Call the local and DC offices of your Representative and 2 Senators.  Use the following script:
  • I am sure Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws
  • After they assure you their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income-payroll taxes over the next 10 years
  • Since most will say they don’t believe their boss has seen the study, drop off a copy, email a copy or click Read Evasion Study Summary and copy/paste the link into an email
  • Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion
  • In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law
  • They probably will say their boss believes simplifying the income tax will handle the problem
  • Explain, when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax.  So, it’s unlikely they are going to pay 30-40% when they were paying 0% because they have already decided it’s okay to cheat
  • Say, the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year
  • Point out Evaders do not self-identify by putting an “E” on their income tax return
  • 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well
  • Ask if the Member is in favor of this?
  • If they say no, then ask again how the Member proposes to stop people breaking the income tax laws
  • Then explain the way to handle evasion without unleashing the IRS audits is The FAIRtax
  • If you meet with your Representative or attend a town hall and ask these questions, you will be even more effective  

American's Big Solution - The FAIRtax Primer America Needs
Hard to believe but there still are people who have not heard of The FAIRtax.  For those people, America’s Big Solution provides a starting point in their study of The FAIRtax and is meant for any age.
America’s Big Solution is an introduction to The FAIRtax written by Terry Tibbetts, author of “A Spartan Game: The Life and Loss of Don Holleder”, with help from Ron Maiellaro, President The Florida FAIRtax Educational Association.  You can buy an electronic version for only $2.99 for the Amazon Kindle, the Barnes & Noble Nook and Apple iOS.  You can purchase a print copy at the same Amazon link above for $9.25.
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Thank you for staying FAIRtax strong!
Yours In Liberty!   Yours In Freedom!

Steve Hayes
Chairman, Americans For Fair Taxation

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Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!