The Chairman's Report October 2, 2020

MAKE FINANCIAL PLANNING POSSIBLE—PASS THE FAIRTAX!


In life, we hear people say, “You could get hit by a bus tomorrow.” We recognize that bad things can happen, but we try to minimize the risks we face by being aware of our surroundings and taking common sense precautions.

One of the things that despots, like the Ruling Class and their Swamp minions, realize is that many people will trade freedoms for security.  Sometimes this is understandable.  Few of us question the need for security screening at airports or disagree with laws requiring lower speed limits in school zones.

However, one fear that never really goes away for many of us, is the fear of not having sufficient finances to take care of ourselves and our families.  We all know that no matter how carefully we plan, there can always be unanticipated expenses.  This is why we save, defer spending and contribute to retirement accounts.

The pandemic has shown us that economic conditions can change quickly.  However, imagine a life where there is so much economic uncertainty that you don’t know what next month’s rent is going to be, or what next month’s car payment, or next month’s health insurance payment, or even what next month’s paycheck is going to be.  And these are just a few of the myriad of expenses families must budget for every month if they’re going to meet their obligations.  In a world where you literally don’t know what’s coming next, financial planning and budgeting becomes impossible.

For most people, not knowing for sure that their financial reserves would be enough to get them thru an unexpected financial upheaval is a very frightening thought indeed.

Every year, politicians from both parties propose policies that will impact how much money we have now, and how much we will have at retirement.  In just about every case, these policies revolve around the income/payroll tax system.

Mr. Biden’s party is telling us that taxes must be raised, but they quickly reassure us that they’re going to raise taxes only on “the wealthy”.  There’s no reason for working class families to worry about their taxes going up.  But, we’ve seen this movie before.  The problem is with the definition of “wealthy”.  It may start out referring to incomes over $400,000, but then it quickly changes and people making only $100,000 suddenly find themselves included in the ranks of “the wealthy”.

Few of us were alive when the 16th Amendment was being debated.  The politicians of the day assured ordinary working people that they had nothing to fear from this new income tax they were proposing.  This would be just a small tax that only the richest of the rich would pay.

Enough people believed them, and the 16th Amendment allowing the Federal government to collect an income tax was ratified in 1913.  Legislation implementing the tax was passed and signed into law later that same year.   But, as always seems to be the case, politicians’ promises are one thing, reality is something entirely different.  That “small tax that only the richest of the rich would pay” didn’t stay that way very long.

Now, the income/payroll tax system reaches into nearly everyone’s pocket, significantly reducing our ability to provide for our families.  At the same time, the really wealthy can buy all kinds of deductions and exemptions that let them avoid paying large chunks of this tax that was originally intended only for them.

And now, they are at it again.  Mr. Biden is proposing to raise taxes but only on the “wealthy.”  As Yogi Berra said, “Its deja vue all over again.”

Most of us regard paying our federal taxes as a responsibility we have to fund the federal government.  However, in the Unity-Task Force Recommendations on his website, Mr. Biden has quite a different view.  He has indicated that he sees the income/payroll tax system as a tool that politicians can use to make changes to society.

Building a More Progressive Tax System: Use taxes as a tool to address extreme concentrations of income and wealth inequality. As a means of strengthening tax progressivity and paying for investments in U.S. productivity, increase taxes on the wealthiest Americans by limiting unequal and unproductive tax expenditures. In addition, limit the ability of wealthy taxpayers to defer and avoid taxes on income (especially that relate to financial investments), tax liabilities of ultra large banks to promote financial stability and fund investments in American productivity, and expand payroll taxes on upper-income taxpayers to fund more generous Social Security benefits.

The people being targeted by the Democrat proposals are the one group most able to resist their efforts—the wealthy.  Does anyone honestly believe that these people will just obediently hand over significant amounts of their wealth without resisting?

The bureaucrats trying to forecast what impact the Democrat proposals will have on government revenue seem to have no clue about the realities of life.  They state, “The model says this, so it must be true.”   They don’t even consider that people’s first reaction would be to protect their own best interests, and in doing so, would deviate from what the model says they will do.

As Justice Roberts said, “Elections do have consequences.”   Yet, wouldn’t it be better if we had a tax system that was focused solely on raising revenue and didn’t worry about manipulating social issues?

Contrast what we have now with what we would have under the FAIRtax.  Predicting our Federal taxes would be a breeze.  Simple math would do it.  Just consider your retail purchases of new goods and services, figure in your prebate and it’s done.

If either party wanted to raise the FAIRtax rate, they could do that, but all Americans would instantly see the increase and know who was responsible.  Another trick they could try would be to raise the FAIRtax rate on purchases above a certain value.  But in that case too, the taxpayers would see the increase instantly and would know who to blame for it.  And if there’s one thing politicians try to avoid like the plague, it’s blame.

CONCLUSION

If you listen to those who are talking about raising our taxes, you’ll always hear the same explanation—it’s for our own good.  What they’re really saying, though, is that they know better than we do how we should spend our money and that we should be grateful to them for taking our money from us because they’re taking such good care of us.

We must not forget the words of Henry David Thoreau when he said:

If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life.

We don’t have to run for our lives.  We simply have to ensure that all of us rise up and demand that the corrupt income/payroll tax system be replaced by the FAIRtax.

If you have friends who don’t know about the FAIRtax send them to FAIRtax.org.  Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.

Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax.

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.”

Is it hopeless?  When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who 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?”