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Chairman's Report - March 30, 2018

FARMERS PAY FOR OUR STUPID TAX POLICY


A Wall Street Journal article entitled “For U.S. Farmers, China Tariffs’ Timing Is Brutal” that was published on March 26, 2018 discusses at length the possible adverse effects on farmers if there is a trade war with China.  


China has threatened to retaliate if the U.S. places tariffs on their goods, and many farmers are concerned that it will have a devastating effect on U.S. agriculture.  The article pointed out:

  • The U.S. exports large quantities of cherries, apples, table grapes and citrus to China, Mr. Owen said, as well as some plums, pears and strawberries. Avocados and blueberries are also on a list to be approved for sale into China.
  • Huge U.S. supplies of grain and meat have pushed down prices for many agricultural commodities despite a robust export pace for some products.
  • Fewer buyers for U.S. crops could also hurt farm-equipment makers after several years of poor sales.
  • Lean-hog futures prices fell more than 4% on Friday on fears that the 25% tariff Chinese officials said they would impose on U.S. pork would sap demand in the third-largest market for American pork by value.


What A Difference The FAIRtax Would Make!


In his excellent FAIRtax Friday article, Ben Mathes points out the real problems with the growing U.S. trade deficits.  Ben also points out the obvious solution, go to a tax system that is used by every one of our trading partners—a border adjustable tax.


A border adjustable tax is a name given to a type of tax that allows the tax paid on the item to be refunded to the exporter of the product before it “leaves the border” of the country to go to another country.  If the product is sold in the country, there is no rebate of the taxes. An imported product is also subject to the tax. All of our trading partners use a value added tax (“VAT”). The VAT adds a tax on each step of the production cycle.  


This means that countries, legally according to our international trade agreements, provide incentives to their companies exporting products and penalize imports by making them subject to the VAT.  There is no need for tariffs against U.S. products because U.S. exports receive no refund of U.S. taxes when they leave the U.S., and they are again taxed by the VAT when they arrive at the border of the other country.  This gives our competitors a huge advantage over our producers both in the U.S. and when our companies export to their country.


Paul Ryan and Kevin Brady (Kevin was a sponsor of the FAIRtax until he became Chairman of the Ways And Means Committee) recognize the enormous problems for U.S. producers attributable to our stupid income tax system.  They tried to find a way to address this problem with their proposal for a destination-based cash flow tax (DBCFT).  This was very complicated and almost certainly would violate our international trade agreements.  


The DBCFT proposal received such resistance from companies and interest groups that all the proposal accomplished was to make lobbying firms more wealthy and increase contributions to Members of Congress.  


The FAIRtax only taxes products and services sold at retail in the U.S.  There is no need for a refund of taxes because, unlike the VAT, there is no tax on the production of the product, estimated at a minimum to be between 12% to 15% of the cost of the product, until it is sold at retail in the U.S.


If the product is exported it does not have the 12% to 15% increase in cost due to U.S. taxes, and when it arrives in the other country it is much more competitive.  When the import is sold in the U.S at retail, the FAIRtax is applied at that time. If competition forces a price reduction of U.S. products and services equal to the amount of tax no longer forced to be in the price, this will make U.S. products even more competitive with imported products.  


This means that more companies will be able to produce products in the U.S. and this will lead to more and better U.S. jobs.  


Conclusion


How much longer will 300 million people allow their lives to be materially harmed because there is a group in D.C. that only does things that profit themselves and their friends?  Probably as long as they can keep us confused as to the real threats to our well-being and prosperity. Hopefully we can be part of the group shining light on the real problems and their source.


A friend sent me this statement from the great Roman orator and thinker Cicero which he made in 55 B.C., "The Budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome will become bankrupt.  People must again learn to work instead of living on public assistance."


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.”



WHAT CAN EACH OF US DO


Call up the local or D.C. offices of your House Member and two Senators and you can use the following script:

  • I am sure that Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
  • After they assure you that 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 ten years.
  • Since most will say they don’t believe their boss has seen the study, either drop off a copy or get an email address and send a copy to them for their boss.
  • 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 that simplifying the income tax will handle the problem.
  • Explain that when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax.  So it is unlikely that they are going to pay 30% or 40% when they were paying 0% because they have already decided it is okay to cheat.
  • Say that 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 that 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 that the way to handle evasion without unleashing the IRS audits is the FAIRtax.  


If you can see your Member or attend a town hall and ask these questions, you can be even more effective.


FAIRTAX POWER RADIO #101

TIGER WOODS, GOLF AND THE INCOME TAX


Listen to The FAIRtax Guys talk about Tiger Woods, golf, the income tax, a deadly disease, a rogue federal agency and tie it all together with the FAIRtax.  Unfortunately the current income tax permeates through almost every aspect of our personal and business affairs, and sometimes dominates our attention.  But The FAIRtax Guys are here to show us the way to bring common sense back to the tax system and sanity to our personal and business lives.  There is only one plan that puts the federal government in its rightful place which is away from our daily personal business.  Listen in and share in the hope that the FAIRtax provides for the future. 

 

THE FAIRTAX VS. THE VAT VS. TARIFFS


Why did the President resort to tariffs? Why does he think they are necessary? The FAIRtax Guys explain the relationship between the current income tax, the VAT and tariffs and how the FAIRtax provides a better way to compete internationally.  The current income tax not only makes a royal mess of things here in the US but it ham strings our companies when they try to compete overseas.  It’s complicated but it is understandable and there is a fix. There is one solution to the disadvantage our companies face in trading overseas and the many problems citizens and companies face with the income tax here within our borders.  Can you guess what that one solution is?


ARE YOU HELPING TO SPREAD THE WORD ABOUT THE FAIRTAX?  


Telling your friends and relatives about our free weekly podcasts is a great way to help us garner more support.  It is the American people who must demand REAL tax reform in Congress.  We must inform America about the FAIRtax!  Please help us.


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Listen on Spreaker.com (http://bit.ly/2oesbk7), iTunes (http://apple.co/1Te8VdF) or iHeart Radio (http://bit.ly/2eqEG7y) on your computer or smartphone.  The easiest way to listen to FTPR on your smartphone is by downloading the free FTPR app.  Just search for “FAIRtax Power Radio” in your app store, download the app and start listening.  


We post a new episode every Friday morning.  Please listen and tell everyone you know about the FAIRtax Power Radio.  


The FAIRtax: Once You Understand It, You’ll Demand It!


THE ELECTRONIC INTRODUCTION TO THE FAIRTAX - AMERICA’S BIG SOLUTION


America’s Big Solution is a basic introduction to the FAIRtax and is meant for people of any age.  And you can download it to your tablet or smartphone right now.


Do you know someone who would like an introduction to the FAIRtax and would prefer to read about it rather than search online for Tweets, Posts and Shares?  If so, America’s Big Solution is their best choice.


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 of the Florida FAIRtax Educational Association.  


You can buy an electronic version of ABS as follows:  AMERICA’S BIG SOLUTION is available for only $2.99 for the Amazon Kindle (http://amzn.to/1WIRHry), the Barnes & Noble Nook (http://bit.ly/1XeG8bH) and Apple iOS (http://apple.co/1tnqK0P).  


You can purchase a print copy at the same Amazon link above for $9.25.  Regardless of whether you choose the electronic format or the print format, you’ll find AMERICA’S BIG SOLUTION will give someone the boost they need to begin their study of the FAIRtax and the suggested resources to learn more. Buy AMERICA’S BIG SOLUTION now!


LINKS TO MORE INFORMATION


These links will help you promote and support the FAIRtax, make yourself familiar with the links below. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.

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