Chairman’s Report - September 13, 2019

Is It Time To Switch The Income-Tax With A Sales Tax?

This is the title of a 9/5/19 article written by Kenneth Rogoff for the Guardian.  Prof. Rogoff received his Ph.D. from the Massachusetts Institute of Technology in February of 1980.  From 2001-2003 he served as Chief Economist & Director Research at the International Monetary Fund.  He is now the Thomas D. Cabot Professor Public Policy & Professor Economics at Harvard University.

Prof. Rogoff makes the following points:
  • Many economists have long favored a consumption-based tax system for raising revenue on the grounds of greater “efficiency and simplicity”
  • One of the main objections is switching taxation systems would require a potentially complex transition to avoid penalizing people spending money on which they have already paid income-taxes
  • If addressed properly, the switch to a sales tax may be a way to tax wealth much more efficiently and effectively than the wealth tax proposed by Senator Warren
  • Although a switch to a sales tax has been proposed by some Republicans, he believes 1 reason the proposal hasn’t received more support from Republicans is they fear the sales tax would be too effective at raising revenue which would then be used to fund more social programs
  • He believes the “knee-jerk” reaction of many on the Left about regressive taxes ignores the fact a sales tax can be progressive

Prof. Rogoff concludes:

"And the U.S. Congress probably has an innate bias in favor of a complex tax system with lots of loopholes and exemptions, giving members leverage over potential donors.  But that is all the more reason to jump at the opportunity to clean up the system and help mitigate wealth inequality at the same time".


As I read Professor Rogoff’s article, I was reminded of 2 conversations I had.

One was in 1991 with John Sununu, President George H.W. Bush’s then chief of staff and former governor of New Hampshire.  When I presented the idea of replacing the income-tax with a national retail sales tax, his reaction was something like this, “I love the idea but I am worried it would raise too much money.  I will only support the idea when we get Members of Congress who will not spend money like drunken sailors.”

The second conversation was in 1992.  Then Rep. Charles Rangel said to me, "the major benefit of switching to a national retail sales tax would be it would raise more money, and this would allow Congress to fund more of the social programs he liked".

While some FAIRtax supporters may disagree with some of the policies advocated by Prof. Rogoff or then Rep. Rangel, we all have to recognize the purpose of The FAIRtax is to:
  • Collect money in the most efficient, simplest and least intrusive manner possible
  • Correct many of the economic problems created by the present income-payroll tax system
  • Lead to more accountability by Members of Congress
  • Eliminate many of the “bought and paid-for” provisions of the present income-tax code

However, passage of The FAIRtax doesn’t mean either side of the political spectrum will automatically get the spending reductions or the spending increases they prefer.  Even with increased revenue brought about by a more rapidly growing economy, Congress and the President will still have to determine how to spend, or not spend, the money raised by The FAIRtax.

While Prof. Rogoff’s article did not try to address the specifics of the sales tax he favors, he has further opened the door to a serious discussion of the benefits of The FAIRtax.  He is an economist who is widely respected by liberals.  He is pragmatically looking at the reality of the present income-payroll system.  He sees how taxes like The FAIRtax are more efficient, and how a consumption tax like The FAIRtax would actually allow some of the policy changes he favors to be implemented more easily.

We have respected economists on both sides of the political spectrum looking at the retail sales tax as a viable and effective alternative to the income-payroll tax system.  It’s time for Congress to have serious discussions about replacing the failing income-payroll tax system with The FAIRtax, the only “Fair tax”!

Click here to view Prof. Rogoff's article  

Anyone who truly cares about the American people  say, “It is time to pass The FAIRtax, the only “Fair Tax”!

The author George Bernard Shaw said, "You see things; and you say “Why”.  But I dream things that never were; and I say “Why Not”.
We say to you President Trump, “Embrace The FAIRtax and 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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Digital TV & Podcasts are available on The FAIRtax Guys - Past Shows

This week's Episode #177 - "Should We Barcode Congress?"

The FAIRtax Guys begin with a hilarious “report” from Babylon Bee, “the world’s best satire site".  Congress Members have decided to wear barcodes to make lobbyists’ jobs more efficient.  This is probably the most humorous start to any episode of FAIRtax Power Radio but the satire was too poignant to ignore.

The real thrust of this episode is to recognize the work of several of our great Volunteers and the different ways in which they strive to make a difference.

Claude Mertznich from Decorah, Iowa has recently breathed new life into his efforts by re-reading The FAIRtax books, listening to FAIRtax Power Radio podcast,  heavily engaging on social media and making plans to talk to as many Presidential candidates in the upcoming Iowa caucuses.  He is truly a dedicated Volunteer.

This is followed by Jim Bennett's report, The Grassroots Guru himself, about engaging a recently elected politician Rep. Tom Malinowski (NJ-07).  Listen to Jim’s account of how he and several other Volunteers reminded the Representative of his campaign promise during one of his town hall meetings.  

These are great examples of what thousands of FAIRtax'ers do across the country every day.  We encourage you to join our efforts and volunteer even if it’s only an hour a week.  All of your efforts count!

As always, FAIRtax Power Radio seeks to help everyone with a better understanding of The FAIRtax and this is no exception.  However, this time, we had a little more fun than usual.
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!
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!