Chairman’s Report - March 27, 2020

🇺🇸  U.S. Manufacturing &
Higher Paying Jobs  🇺🇸

As discussed last week, manufacturing can be defined as any mechanical, chemical or physical process by which materials are made into new products.  It doesn’t have to be done in huge factories or plants.  It can be done quite nicely in small businesses and even in home-based businesses.

In another excellent article posted on The Balance website, Kimberly Amadeo looked at why we should care about getting more manufacturing jobs in the U.S.  Among some of her well-documented statistics are:
  • According to the National Association of Manufacturers there were 12,750,000 Americans who were employed by manufacturers.  (What year was this?)
  • In 2017, they earned an average of $84,832 a year, this includes pay and benefits
  • The average worker earned $66,847, $17,985 less (again, need to know when in order for the comparison to 2017 to make sense)
  • U.S. workers are the most productive in the world, thanks in large part to the increasing use of computers and robotics
  • The demand for manufactured goods is expected to triple to $30 trillion by 2025 (in the U.S. or world-wide?) and much of this demand will be for more sophisticated goods which the U.S. could manufacture

How Would An Increase In Manufacturing Jobs Affect Us?
Higher Incomes

As we can see, increasing the amount of manufacturing in this country isn’t just a “nice” thing because some of what was being imported is now being produced domestically.  Multiply the 12,750,000 workers times the $17,985 average annual increase in total earnings for workers with manufacturing jobs and this equals $229,308,750,000.  Wow!

This means our neighbors, friends, relatives, and customers who work in manufacturing jobs will have almost $230 billion more dollars to spend in our communities.  If the number of manufacturing jobs doubled, and even if the pay difference didn’t increase, as it is likely to do, there would still be a total of $460 billion in additional income created.

Very good news is, not only the people with manufacturing jobs will see pay increases.  The increasing demand for workers to fill manufacturing jobs will reduce the supply of workers available to fill non-manufacturing jobs.  Non-manufacturing employers will have to offer their workers higher wages to keep them from moving to the higher-paying manufacturing jobs.

The Multiplier Effect

The increase in higher-paying manufacturing jobs will not affect just the workers in those jobs or even workers in non-manufacturing jobs whose incomes will increase because of supply and demand. defines the multiplier effect:

"An effect in economics in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent.  For example, if a corporation builds a factory, it will employ construction workers and their suppliers as well as those who work in the factory".

The Economic Policy Institute published an article explaining the multiplier effect.  One of their tables calculated that for every 100 jobs created, the following number of additional jobs would be created:

🇺🇸   Industry  🇺🇸 Additional Jobs Created
🇺🇸  Steel Product Manufacturing 1,289
🇺🇸  Animal Food Manufacturing 978
🇺🇸  Pulp Paper & Paperboard Mills 686
🇺🇸  Petroleum & Coal Products Manufacturing 1,450
🇺🇸  Agriculture, Construction & Mining Machinery Manufacturing 415
🇺🇸  Motor Vehicle Manufacturing 1,428
🇺🇸  Railroad Rolling Stock 416

The article provides the following example:
  • A factory manufacturing durable goods and employs 1,000 people and a retail shopping mall employing 1,000 people both shut down
  • The 1,000 direct jobs lost are the same amount
    • However, the employment multipliers show what are the actual effects
    • The # of indirect jobs lost for each manufacturing job (jobs supported by the manufacturer) total 744 and the indirect jobs lost for each retail mall job lost are 122
    • This means closing the factory cost the economy not 1,000 jobs but 7,441 jobs
  • The converse is true.  When you add 1,000 jobs in a plant manufacturing durable goods this will create an additional 7,441 jobs

🇺🇸  How To Increase U.S. Manufacturing Jobs 🇺🇸

The easy answer is you increase manufacturing jobs by increasing the demand for U.S. manufactured goods.  Since there are few countries in the world whose workers are even close to being as productive as U.S. workers, the U.S. has the ability to manufacture sophisticated goods which few other countries can match.

Why then don’t we see more of these higher paying manufacturing jobs in the United States?  When the number of American manufacturing jobs doesn’t increase in spite of all of the advantages in the U.S., the obvious reason is something is preventing it.

People look around the world and see many European countries who could possibly compete with the U.S., and they point out:

  • Regulations in these countries are even worse than in the U.S.
  • Their work force isn’t as productive
  • Cost of raw materials is often higher
  • These countries have higher income and payroll tax rates than the U.S.

A number of factors are slowing the increase of U.S. manufacturing jobs.

However, the largest factor holding down the more rapid creation of U.S. jobs is our corrupt and unworkable income-payroll tax system.

We are the only country in the world who don't reduce the price of our exported goods and services by between 15% - 23%.  How do our competitors accomplish this?

Their tax systems return to the exporter all of the value added-consumption taxes paid from the beginning of the creation of the product until their final product is ready to be exported.  While the prices of U.S. goods produced for export still contain the embedded costs of the income-payroll tax system.

To start with, this gives foreign produced products a 15% to 23% price advantage in the world market.  Then, when those exported products reach our shores, they are not taxed by our income-payroll tax system.

There isn’t a thing wrong or illogical about a consumer looking at 2 apparently identical products, one an import priced 20% less than the U.S. manufactured product, and selecting the lower priced item.

To make matters worse, when a U.S. manufacturer produces a product for export, the U.S. exporter doesn’t get back the embedded costs created by the destructive  income-payroll tax system.  Those costs have to be included in the price.  To make matters even worse, when a U.S. produced product arrives in another country, that country adds its 15% to 23% value added-consumption tax making the U.S. product that much more expensive.


One of the things “The Ruling Class” and their minions want is for us to be so confused by the numbers we will just leave it to them to “figure out what’s best for us”.

However, the problem is really simple.  How important would it be if you or your child’s family was earning an additional $1,500 per month?  What about all of the kids leaving school who would have many more well-paying jobs available if we could add more U.S. manufacturing jobs?

When The FAIRtax is law, U.S. Manufacturers will have a level playing field.  Consumers will pay The FAIRtax on both imported and domestic goods.  Imported goods will no longer have  a 15% to 23% price advantage in the U.S. market.  In addition, prices of U.S. manufactured goods on the world market will be 10% to 20% lower since they will no longer contain the embedded costs of the destructive income-payroll tax system.

Yes, the numbers are correct.  By eliminating the 15% to 23% price advantage for imports and by eliminating the required price increase of between 10% to 20% caused by the income-payroll tax, U.S. manufacturers can have production costs, including higher pay for workers, between 25% and 43% more and still be competitive with imports.

Do you want a better paying job?  Do you want all Americans to have better paying jobs?
Demand Congress to pass 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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This week's Episode #205 - "Hey Entrepreneur, You Should Be A FAIRtax Fan!"

Over the years, The FAIRtax Guys have spent a lot of time talking about how The FAIRtax will help Americans from all walks of life.  But how about our business sector?  Will The FAIRtax be beneficial to private sector businesses too?

This episode concentrates on how The FAIRtax will positively impact businesses across America.  To discuss this issue and to make it entertaining at the same time The FAIRtax Guys use a tried and true method of explaining how businesses will benefit when The FAIRtax replaces the current un-American and unfair-income-tax.

Many of you will remember several years ago, we used a Jeff Foxworthy style of presenting while discussing The FAIRtax.  At that time, we concentrated on the benefits of The FAIRtax to the average American individual and family.  In this episode, Mr. “Bob Paxworthy” concentrates on the American business sector.

We hope you enjoy this unusual way of educating the public about The FAIRtax and its positive effects on business in this country.

Join us for another information packed episode of FAIRtax Power Radio and you’ll be on your way to becoming a FAIRtax expert.

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 Click here to visit 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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Yours In Liberty!   Yours In Freedom!

Steve Hayes
Chairman, Americans For Fair Taxation

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