The Insiders in DC Hate the FAIRtax
John Linder
John is also starting a substack to enhance his ability to comment on the FAIRtax and other issues of importance. Here is the link. There is no charge to join John and he invites all of you.
John served in Congress from 1993 to 2011. He saw the workings of D.C. first-hand. Here is his article.
The Insiders in DC Hate the Fairtax
While there is increased discussion about the Fairtax in the political world these days there is also a growing interest in killing it. For those who are not familiar with the Fairtax let me give you a brief explanation.Currently we pay taxes based on our income. We pay a graduated income tax based on the amount we earn. We pay a payroll tax to cover Social Security, Medicare, Medicaid and Social Security Disability payments. We also pay a tax on the gain in value of any assets we sell and on what we have left to pass on to our heirs when we die.
(That death tax is mean. I once spoke against it on the floor of the House of Representatives. I said that there was a time in some parts of the country when hard guys ruled certain areas of the city and demanded a monthly retainer to allow you to stay in business. But even the Mafia didn’t show up at the widow’s door when you died demanding their share of what was left. That cannot be said for the government.)
The Fairtax would end all of those taxes based on income and tax only the purchase of new goods or services. A nationwide sales tax. The average income earner currently pays between 30 and 40% of what they earn when you add in the payroll tax. Under the Fairtax you would pay 23% of what you spend. There would be no tax on any business transaction.
One of the first lessons we learned nearly 30 years ago when doing the research was that America clearly wanted to protect the poor so we provide a cash advance to every household, based on the size of the household, that would cover the tax costs of spending up to poverty level spending. Yes, Bill Gates and Elon Musk would receive this also and this is important. We are not going to know who is rich and who is poor.
Today that would allow a family of four to spend about $39,940 with no tax consequence.
Now let’s get down to the reason why it will be dead on arrival in Washington DC. That is – unless you join in this fight.
Washington DC used to be about Democrats versus Republicans, then Liberals versus Conservatives. Now it is a simple as the insiders versus the rest of us. The insiders in DC are former Representatives, former Senators and former senior committee staffers or agency leaders who left important decision-making roles in government to make a fortune as lobbyists shaping future decision-making. And more than half of them make their living gaming the tax code.
A few examples: The single biggest concern of every farmer in America is what will happen when he and his wife die. Will there be anything left for the children after taxes? Most of them borrow money every year to get their crop in the ground. They live modestly but spend huge amounts of money with accountants and lawyers trying to protect what they have accumulated for their children. They say a prayer every night that the Lord will find a way to get rid of the death tax.
They even formed a powerful organization in Washington DC. The American Farm Bureau Federation has 5 million farm families that pay dues to fund hundreds if not thousands of former congressional staffers to administer their organization. Their website talks about food security and hunger and agriculture budgets, but what they were organized for was to get rid of the death tax.
When I was in Congress I spoke to groups of people about the Fairtax in over 30 states. I spoke to state Farm Bureau members in most of those states. They were all for the Fairtax. One year at their annual meeting the leaders were planning to pass a resolution in support of the Fairtax. The bureaucrats who ran their organization said, “Hold on. We need to study this a bit more.” They didn’t tell their elected farm leaders what they really meant. If we pass the Fairtax and eliminate the death tax what are they to do?
Real estate agents came through my office from my district every year. They loved the Fairtax. The huge increase in take-home pay for every worker in America means they can afford a bigger house payment. Of course, many agents get out their calculators and calculate your savings from the mortgage interest deduction, but 75% of us don’t itemize and thus don’t benefit.
Realtors also organized to protect that deduction. The National Association of Realtors has 1.5 million dues-paying members. They have built their own building near the capitol to house their thousands of employees.
While the agents who pay the salaries of the bureaucrats that run their organization overwhelmingly support the Fairtax the bureaucrats say, “Hold on. We need to study this a bit more.”
They were originally formed to protect the mortgage interest deduction and if we pass the Fairtax and eliminate its need what are they to do? They are so serious about their opposition that they spent $100,000 of their members’ money to defeat me in an election in 2002. They failed.
Now some of the insiders are paying formerly important people to study the Fairtax. The money for the study comes from the insiders so we know that the result will be exactly what they want. The one that I saw this morning came from an organization whose president is Douglas Holtz-Eakin, a former director of the Congressional Budget Office with whom I had a very cordial relationship. The opening charge was that the 23% number of the tax was a bit optimistic. It could, with all the avoidance and cheating anticipated, go as high as 380%. Really?
It's getting harder and harder to take Washington DC seriously.
CONCLUSION
John’s article clearly makes the case for why we need to enact the FAIRtax now!
John’s unique perspective allows him to “call out” the real reasons for the vehement opposition to the FAIRtax.
This gives all of us an opportunity to force Members of the House:
- To either vote for the present income/payroll tax system or the FAIRtax.
- To either show that they want to keep a system that benefits only them and their friends or enact a system that benefits the rest of us.
- To tell us clearly if they consider us free citizens or subjects to their needs.
They either believe in being transparent and showing Americans the true cost of their government or they don’t. They either support the largest transfer of power from government to the people, the FAIRtax, or they don’t.
If they think that the FAIRtax needs to be changed, then they can propose the change. Don’t condemn the entire bill because it has a “flaw” that can be easily addressed. And don’t think for a minute that there aren’t any flaws in the income tax.
Please stand with us and demand that your representative support a much fairer, much simpler and much more efficient way to fund the government—the FAIRtax!
The FAIRtax doesn’t pick winners and losers. Because it taxes spending, not earnings, the FAIRtax lets everyone save for their retirement tax free.
The FAIRtax collects the revenue that the federal government needs to operate but does it in a way that has the least impact on our individual freedom and the least impact on our economic prosperity.
There are no tax returns to file and no records to keep. We pay our federal taxes when we make retail purchases of new goods and services, and there is no need for the IRS. If you sell a used couch or used jet ski online, there is no FAIRtax due on that transaction.
The FAIRtax will allow us to TAKE BACK CONTROL.
The income/payroll tax system is broken and no longer working—we can’t repair it but we can replace it with the FAIRTAX!
Join us and TAKE BACK CONTROL OF OUR COUNTRY AND OUR LIVES—NOT WITH BULLETS BUT WITH THE ELIMINATION OF ONE OF THE BIGGEST THREATS TO OUR LIBERTY AND ECONOMIC PROSPERITY—THE INCOME/PAYROLL TAX.
We all should remember Edmund Burke’s warning that applies to our efforts to TAKE BACK CONTROL,
“Nobody made a greater mistake than he who did nothing because he could do only a little.”
We should also remember this quote from George Orwell's 1984, which, if we do nothing, may foretell your and your 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?
We can write letters and make calls to our elected representatives and attend Zoom town hall meetings demanding that if they really want to allow Americans to “TAKE BACK CONTROL”, the first step is to eliminate the income/payroll tax system and enact the FAIRTAX!
TAKE BACK CONTROL! Help us PASS THE FAIRTAX!
The IRS will be gone and we will pay our taxes when we make purchases.
WE and not the Ruling Class and their minions in D.C. will decide how much federal tax we pay!
WE will know how much tax we and everyone else are really paying because taxes will no longer be hidden from us. It will be clearly shown on every retail receipt.
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.
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?”
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to this link to invest in AFFT and in your and your family’s future.