So Long 113th Congress – Hello 114th

“For last year’s words belong to last year’s language. And next year’s words await another voice. And to make an end is to make a beginning.” – T.S. Eliot

On Tuesday, Rep. Paul Ryan (WI-1) succeeded Rep. Dave Camp (MI-4) as the new Chairman of the House Committee on Ways and Means. This powerful committee oversees the nation’s tax legislation and Ryan has already signaled that major tax reform is going to be a high priority.

When interviewed by the Washington Examiner in September, Ryan indicated his focus would be pro-growth legislation and moving away from static scoring if he became Chairman of Ways and Means.

This is game changing for the FairTax because static scoring is the traditional scoring methodology for proposed tax legislation that estimates revenue generation, but it does not reflect the impact a piece of legislation may have on economic growth or recession.

Senate Finance Chairman Orrin Hatch went so far as to label static scoring as a “downright dumb and intellectually dishonest” methodology.

To illustrate Hatch’s point, Dailer Caller’s Rachael Stolzfoos pointed out, “Under the CBO and JCT’s current “static” scoring system, an income tax rate increase from 30 percent to 100 percent would give the government a 70 percent increase in tax revenue — an analysis which leaves out the obvious fact that few people would be willing to work at all if 100 percent of their paycheck went to the federal government.”

Given the way that HR 25 has been previously scored by the JCT (Joint Committee on Taxation), we wholeheartedly agree with Chairman elect Ryan that it is long past time that Congress use dynamic scoring when evaluating tax reform legislation.

Ryan also indicated he likes “specifics” and wants “ideas” that “people are willing to fight for,” even “if they don’t go all the way.” That’s great news for the FairTax.

H.R. 25 / S. 122, The FairTax Act, is the most specific, most detailed most researched of any tax reform plan before Congress. And for 15 years the American people have stood behind and fought for its’ passage. And our fight continues today.

We congratulate Chairman-elect Ryan and look forward to working with him in the coming months. And, we thank outgoing Chairman Dave Camp for his efforts towards getting a first ever, Ways and Means vote on H.R. 25.

Save serious time and cash at FairTaxRewards.org

If you were going to shop online, please sign up for and use FairTaxRewards.com. There is no cost to sign up and it is simple to use. You can use this mega mall to get Black Friday and Cyber Monday bargains at over 2,500 of America’s favorite retailers including Walmart, Best Buy, Target, Kohl’s, PetSmart, Macy’s, 1-800 Flowers and Old Navy – and lots of local retailers too!

And your FairTaxRewards.com mega mall gives you exclusive access to daily deals and coupons that provide significant savings along with CashBack earnings for you and a payment to the FairTax campaign on everything you buy. So, this year relax, register and let the savings fly!

The FairTax – the best gift of all

The FairTax is the only tax replacement plan that will generate jobs, stimulate the economy and eliminate the IRS. That’s a gift worth giving! So why not buy an AFFT membership for everyone on your shopping list. For as little as $5 per person, you can sponsor someone for AFFT membership. Just click here or go to FairTax.org and click on the membership button.

Finally, next Thursday is Thanksgiving. Erma Bombeck once said, “Thanksgiving dinners take eighteen hours to prepare. They are consumed in twelve minutes. Half-time takes twelve minutes. This is not coincidence.”

Happy Thanksgiving and happy half time!

Cindy Canevaro

Executive Director

Midterm Message: Voters Want Tax Reform

From The Heritage Foundation

…This call for a ripping out of the tax code by its roots and starting over may seem as hopeless as the Chicago Cubs winning the World Series. Lobbyists fight tax reform as a job killer — their own, that is.

But sometimes the stars really do align, as happened under President Reagan in 1986, when 97 senators and a majority of House members cleaned out the tax stables and chopped the top tax rate to 28%…

Even President Obama has endorsed a lower corporate tax rate in his budgets.

Whether it’s a flat tax, a fair tax that eliminates the income tax or some new configuration like the 9-9-9 type plan that captured so much public attention and support when Republican presidential candidate Herman Cain proposed it three years ago, this is beginning to feel like the moment for a historic reset on our tax system.

Washington Called — Literally!

“When in the course of human events it becomes necessary for one people to dissolve the political bands which have connected them…”  – The Declaration of Independence

One of the great things about the people of this country is that they will send a message to Washington, D.C. when they believe that a change in direction is needed. FairTax is a non-partisan movement but our supporters agree that the exit polls are correct – people are demanding something be done to improve the economy and allow it to create more and better jobs.  

And we have the answer – the FairTax®.

Nowhere was the people’s demand for real change heard louder than in the state of Georgia. And who led the charge? The GA FairTax team who spent hundreds of hours and many months preparing in-depth candidate scorecards and FairTax briefing books for both the primary and general elections. 

Dedicated volunteers went to candidates’ events and monitored speeches and social media to capture their positions on tax reform and the FairTax. Invitations were also extended to all candidates, regardless of party, for briefings on the FairTax Plan.

One U.S. Senate candidate, David Perdue, was unfamiliar with the FairTax Plan. He accepted Phil Hinson and the Georgia FairTax team’s briefings, and once he understood how the FairTax is the only tax replacement plan that creates jobs, improves America’s economic growth and eliminates the IRS, he eagerly endorsed it. 

And when Perdue’s opponent launched FairTax attack ads, the Georgia FairTax team sprung into action issuing press releases and other communications refuting the misstatements and distortions that were being made against the FairTax.

On January 3, 2015, Senator-elect David Perdue will be sworn in as the Junior Senator from the great state of Georgia. And in case you missed it, on election night Perdue declared in his acceptance speech that when the 114th Congress convenes in January, he would be the new sponsor of the FairTax legislation in the U.S. Senate!

Our hearty congratulations to the Georgia FairTax team for an outstanding election year education effort. They proved once again that determination, initiative, diligent preparation, teamwork and tenacity are the key to advancing the FairTax.

And congratulations to all of you who educated your state’s candidates on tax reform and the FairTax Plan, who held candidates accountable during town hall meetings and who made your voice heard at the ballot box.

This seismic shift in power has already begun to reignite the discussions in Washington on tax reform. The day after the election I received a call from the senior Congressional aide of a major HR 25 co-sponsor who said the Member wanted to know if the grassroots were actively supporting the FairTax campaign now that they were in charge of governance. 

And at an event with high wealth individuals, I was asked the same question by several attendees. 

If you have not yet signed up for your AFFT paid membership, please do so today. 

We have paid memberships for as little as $5. We must be able to proudly say YES and give solid evidence to back up our claim. One way to convey that support is to share how many Americans have become paid members of AFFT. So talk to your friends, your family and your neighbors. 

Instead of buying one $10 membership for yourself, buy one $5 membership for yourself and a $5 membership for your friend or neighbor. That way we have two paid memberships towards our ultimate goal. But please, make sure they support the FairTax and are willing to receive more communication from AFFT. 

And if you are a recurring donor, thank you, thank you, and thank you! Your gift is more critical today than it has ever been. Please make sure you read the Chairman’s Report each week to see how your gift is helping to advance the FairTax legislation.

Michelangelo, whose breathtaking paintings adorn the Sistine Chapel, is unmistakably one of the greatest artists to have ever lived. He said, “The greatest danger to most of us lies not in setting our aim too high and falling short, but in setting our aim too low, and achieving our mark.” 

The 114th Congress promises to address tax reform. However, is it going to be the Washington, D.C. and lobbyist version of tax reform – really not reform at all – or is it going to be real tax reform with the FairTax? The people’s mandate for action gives us a unique window of opportunity to let Congress know that they are demanding a growing economy and better jobs, and the only tax reform that assures this is the FairTax. 

And make no mistake. FairTax supporters in Congress are watching to see if we have the broad support we claim we have.

That’s why I am challenging you to recruit five new paid members between now and January 3, when the new Congress convenes. When we are then asked to demonstrate how the grassroots has embraced the FairTax Plan, we can proudly show that just since Election Day, over 100,000 new patriotic Americans have signed on to support the FairTax. 

Here’s to aiming high and to achieving victory.

Until next week,

Cindy Canevaro

Executive Director  

“The Odor Of Extortion”

“People say the government makes no money, but that’s not true. They make money like any bandit or robber does.” – Jarod Kintz

You know him or her. They are honest people who work hard and pay their bills. He or she is a small business owner who accepts a mix of cash and credit cards for payment. Each day, they faithfully deposit that day’s cash into their bank account. This is the money that will be used to pay their employees and their bills.

Imagine the shock when they log on to their bank account and find that their bank balance has been wiped out – zero – nada – nothing. Thinking there must be some mistake, because they know generally what their balance should be, they immediately call their bank.

What they hear brings them to near collapse. They’re not the victims of hacking, at least not in the traditional sense; they’re the victim of what Forbes contributor Rick Ungar has aptly labeled “grand larceny.” And the perpetrator: the U.S. Government, specifically, the Internal Revenue Service (IRS).

This week The New York Times and the Institute for Justice (the Institute) blew the lid off how the IRS uses civil forfeiture laws to steal cash from innocent Americans’ bank accounts: no criminal charges, no investigation – just an ex parte warrant and the IRS’ “suspicion” that you might be up to something nefarious like tax evasion or drug laundering.

According to the NY Times, the Institute analyzed  “structuring data from the IRS, which made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case.”

And once they steal your cash, get ready to shell out upwards of $20,000 or more in legal fees and even then you may get less than 20 percent of your money back. 

That’s why Ungar, a left-leaning senior political commentator and host of Sirius XM’s Steele & Ungar, lamented in Forbes that the IRS’s actions were “nothing short of grand larceny,” adding, “how does that not have the odor of extortion?”

Ungar’s blistering commentary concluded, “Whatever you think of the IRS scandal of recent years, it pales in comparison to what we are seeing take place here. …if the President fails to publicly condemn this, he will have given those of us who believe in government as a tool to greatly benefit the people every reason to feel betrayed and left to be defined as fools.”

Thus far, the President has remained silent. And while the IRS issued a typical double-speak statement, they offered no apology or reimbursement to the victims of their fully sanctioned theft operation.

What’s most perplexing, however, is the deafening silence from Congress.

When the IRS comes like a thief in the night and steals our cash (with full impunity), our top law enforcement agency (Department of Justice) refuses to investigate the IRS’ partisan targeting and illegal release of taxpayer records, and our elected officials sit in stone cold silence, where do We the People turn for justice?

There are only two solutions to this problem. One is the ballot box and Tuesday is Election Day.  Will you continue the status quo or will you have the courage to stand up and finally say, “enough is enough” – regardless of party? That decision alone could initiate seismic waves of change.

The second answer is the ultimate enactment of the FairTax® Plan. The FairTax is the only tax plan that replaces the income tax and eliminates the IRS. In a way, you hold the key to both solutions.

As Mike Huckabee writes in his latest article, “…as Americans, we are all guilty of one inexcusable sin: continuing to tolerate this out-of-control rogue agency that thumbs its nose at us even as it’s trampling our constitutional rights. It’s long past time for the Fair Tax.”

Finally, as candidates go into the final days of the 2014 midterms the mud’s slinging and the vitriol is erupting. And candidates who stand FairTax strong are fighting mistruths, half-truths and outright falsehoods.

One such candidate in the Georgia Senate race, David Perdue, is defending his FairTax support against opponent Michelle Nunn. And wouldn’t you know Neal Boortz has something to say about it! Like him or despise him, he always has an opinion. Click here to see what Neal’s saying now.

Until next week,

Cindy Canevaro

Executive Director

We’re making waves

“If you believe in yourself and have dedication and pride – and never quit, you’ll be a winner. The price of victory is high but so are the rewards.” – Paul Bryan

After a lifetime spent studying cultures around the world, anthropologist Margaret Mead observed, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.”

We FairTaxers are committed to seeing the FairTax® become the law of the land. 

Yet, do you ever wish you could do more and wonder if your contributions to the FairTax campaign are really helping to advance the cause? Do you wonder if your phone calls and letters to your elected representatives, your generous financial gift(s) or maybe your volunteering in a FairTax booth have really moved the needle? Does your sharing the FairTax Plan with a neighbor or co-worker really help bring another person on board the FairTax train?

In a word – YES!

Mother Teresa helped put your contributions in perspective when she said, “We ourselves feel that what we are doing is just a drop in the ocean. But the ocean would be less because of that missing drop.”

You, ladies and gentlemen, are drops of water creating larger and larger waves in the ocean of our political system. Rest assured, everything you do, no matter how insignificant it may seem, advances the FairTax further and further. Your calls, your letters, your gifts, your volunteering at FairTax events – everything is vital to advancing the largest grassroots tax replacement plan in the nation.

And yet, there is so much more to be done, like AFFT paid memberships.

We’ve been talking a lot lately about the new AFFT new paid membership initiative. Remember, we have a goal of one million paid members. That’s right – one million paid members. Yes, that’s a lot of drops, but we believe it is doable.  

Consider this: The National Rifle Association (NRA) has 4.5 million paid members. And yet, in 2012, the Bureau of Alcohol, Tobacco and Firearms estimated there were only 3.1 million registered gun owners in the U.S.

But in contrast, 243 million taxpayers have to navigate a tax code that even IRS watchdog Nina Olson said in 2012, “obscures comprehension, leaving many taxpayers unaware how their taxes are computed and what rate of tax they pay; it facilitates tax avoidance by enabling sophisticated taxpayers to reduce their tax liabilities and provides criminals with opportunities to commit tax fraud; and it undermines trust in the system by creating an impression that many taxpayers are not compliant, thereby reducing the incentives that honest taxpayers feel to comply.”

Then once these 243 million taxpayers have filed their yearly tax return, they live in stark terror of receiving an IRS audit notice.

They know that if audited, the IRS can and most likely will seize their property, their income and all their financial holdings. And the IRS can imprison them for the rest of their lives. And all of this is done with total and complete impunity.

These taxpayers represent the potential of 243 million new drops in the FairTax ocean.

That is IF they hear about the FairTax Plan. And there is nobody better than you to tell taxpayers in your local area about the FairTax. Invite people over for coffee and dessert. Ask to speak to your local Rotary or Kiwanis Club, invite your book club to read The FairTax book and lead a discussion comparing the FairTax to the income and flat tax.

Consider ordering FairTax pocket cards from the FairTax store and present one to every waiter when you pay your restaurant check. Give one to your doctors and other healthcare professionals, along with a membership form, and invite them to join you in supporting the FairTax Plan. 

Imagine if AFFT recruited just 1% of America’s 243 million taxpayers, our membership ranks would swell to 2.43 million paid members. Now that’s a game changer and you can be a driving force in changing how Washington views the FairTax.

Take a look at the math. If just 10,000 FairTax supporters each recruited one AFFT member per month, the result would be 120,000 AFFT members in the first year and 240,000 AFFT members at the end of the second year. If each of these 120,000 members then recruited three new AFFT members by the end of the second year, we would have almost one million members!

Khalil Gibran said, “Progress lies not in enhancing what is, but in advancing toward what will be.” Please never doubt that a small but committed group of everyday citizens like us can achieve one million members and we will get the FairTax passed.

Finally, this week in theatres across the nation, taxpayers from all walks of life watched the movie, “UnFair:  Exposing the IRS.” For the first time, many of these citizens learned how the tax code and the IRS are used as political weapons. They also learned that there is an alternative to this longstanding American nightmare. They learned about the FairTax Plan. It was a great night for the FairTax.

Tony Robbins said, “The path to success is to take massive, determined action.” This next week, may we all find ourselves on a clear and determined path to FairTax success.

Until next week,

Cindy Canevaro

Executive Director  

Letter: FairTax would bring jobs back

As seen in the Wisconsin Rapids Tribune

FairTax volunteers believe the FairTax could fix many problems. The current hot topic with our tax law appears to be inversions. This is when a U. S. firm buys a foreign company and moves its headquarters abroad to avoid our 39.1 percent corporate tax. The Tax Foundation reported that we rank 34th in international tax competitiveness. Estonia is first with a 21 percent corporate rate.

The FairTax would give us a zero corporate tax rate. All other nations would likely experience inversions at a blinding rate while thousands of businesses move here.

Another problem we have is a low growth economy with a labor participation rate of 62.7 percent according to data.bls.gov. It is the lowest in 36 years. The Daily Mail stated that we have 92 million people out of work. If we want the economy to grow we need workers to buy more items. The FairTax allows workers to take home their gross pay minus state income taxes and it provides a monthly prebate. More take home pay means more consumer activity.

The Bureau of Labor Statistics said that in 2013 we had 145 million workers and now we have 92 million out of work. The unemployment rate is 5.9 percent. This number is making politicians look really good. It resembles Common Core math. Ninety-two divided by 145 is 63 percent, not 5.9, but then I don’t need to protect any politicians. Black Press USA found that the unemployment rate for blacks was 11 percent and 20 percent for black teenagers.

If you want companies moving here, building plants, and stores, and you want people buying products to grow our economy you might consider the FairTax. The FairTax eliminates federal income tax forms and takes the stress out of April 15. Only retailers would fill out tax forms.

Al Ose,

Wisconsin Rapids

Tuesday: UnFair + FairTax hits theaters!

“He that can have patience can have what he will.” – Benjamin Franklin

On Thursdays, Facebook fans have adopted a growing ritual affectionately known as “Throw Back Thursday.” Users post their favorite remembrances from the past – a childhood picture, a tattered piece of high school memorabilia, news clippings of a place where the locals once gathered.

For Facebook, taking a walk down memory lane has proven to be a popular activity for many users. For the FairTax® campaign, taking time to look at the past provides a possible window into understanding the journey that has gone before us and lies ahead.

The FairTax legislation, first introduced in Congress 15 years ago, represents the greatest transfer of power from the Congress to the people since the Founding Fathers began drafting the Constitution in 1787. Some people say they love the FairTax but don’t think it will ever become law. Others believe that we have to repeal the 16th Amendment, and because repealing an amendment takes a long time, there is no reason to push the FairTax now.

It is important that doubters consider these historical facts:

  • While the 13th Amendment, which abolished slavery, may have taken less than a year to be ratified, the decades leading up to its passage divided the nation and engulfed it in a bitter and costly civil war, but its supporters persisted and it was enacted.
  • The 27th Amendment, which prohibited increasing or decreasing the salary of Members of Congress until the next term of office begins for the House of Representatives, was introduced in 1798 and even though it took 202 years, 7 months and 12 days to ratify, its supporters persisted and it was enacted.
  • The 19th Amendment, which gave women the right to vote, began as a serious movement in the mid-19th century. Congress passed the legislation in July 1919, and ratified it in August 1920. As noted by the National Archives, “Few early supporters lived to see final victory in 1920,” but it was enacted.
  • The 26th Amendment, which lowered the voting age to 18 years of age, was debated for thirty years, but took three months and eight days to ratify after being passed by Congress.

Fulton Sheen said, “Patience is power. Patience is not an absence of action; rather it is “timing” it waits on the right time to act, for the right principles and in the right way.”

Those who seek to protect the control, power and abuse they have carved out with the current income tax system believe that if they just keep throwing up roadblocks and ignore the FairTax movement, we will eventually join the doubters and give up and go away.

We have a message for them.

Never underestimate our patience as being a lack of action. Never doubt our unwavering principles in our quest for simple and fair taxation for all. Never question that we understand the concept of timing, and we are confident our time will come.
What our opponents fear the most is that the FairTax is the right and the best thing to do for America. Many of them instinctively know the truth of what Victor Hugo said so long ago,  “All the forces in the world are not so powerful as an idea whose time has come.”

To further help educate people on the FairTax, in just four days; one of the biggest FairTax events in 15 years will take place in theatres across the nation. The 90-minute movie, “UnFair: Exposing the IRS,” will be showing for one night only on October 14 at 7:00 P.M. across all time zones.

This groundbreaking documentary promises to do what no other movie has done before – tell the stories of betrayal, corruption, intimidation and the harsh personal, economic and political realities of America’s income tax system and the IRS. More importantly, it presents the FairTax Plan as the only real solution!

Don’t delay. Buy your ticket today. And call your friends, family and neighbors and invite them to join you at the movies. Go to http://www.unfairmovie.com/tickets/ to locate theatres near you and to buy advance tickets. And if you are interested, click here to check on Theatre Captain opportunities in your hometown.

See you at movies!

Until next week,

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Cindy Canevaro

Executive Director

Abolish the IRS? A New Documentary Says It Can be Done and Replaced With a ‘Fair Tax’

The Blaze

“Unfair: Exposing The IRS,” a new documentary hitting theaters for just one night on Tuesday, October 14, explores the rampant abuses of the Internal Revenue Service.

The 1:20 film details the well-known story of the IRS targeting of conservative groups, but there are more abuses exposed. “Unfair” highlights a relatively unknown problem experienced by parents who adopt children from outside of the country, harassment of groups like the American Legion, and certain religious organizations.

In addition to pointing out the overreaching actions of the agency, the film also hopes to jump-start a movement to abolish the bloated agency and replace it with a “fair tax.”

On Friday’s edition of “The Morning Blaze” on TheBlaze Radio, the film’s narrator and producer, Craig Bergman spoke with Mike Opelka about the film, the variety of IRS abuses and explained the difference between a fair tax and a flat tax…

FairTax® Fanaticism

Philip L. Hinson

Member, AFFT Board of Directors

Georgians for Fair Taxation

August 12, 2014

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Some of us who have been fighting so hard and sacrificing so much for the FairTax for years are occasionally asked the question of why we keep at it. Another way of expressing that sentiment is the view that Congress will never relinquish the power that the current tax system provides them and that we should just accept that we are here to serve them, rather than vice versa. While that sort of resignation is certainly tempting at times, there is one reason that many of us labor on at what we all recognize is a marathon, rather than a sprint, with little to gain from it personally. That reason was in the spotlight this week with a new poll released by the WSJ and NBC1. The poll included the startling finding that 76% of the American public now lacks confidence that “life for our children’s generation will be better than it has been for us.” Although that measure of public sentiment has been increasing for several years, 76% represents an all-time high (at least so far). A number that large obviously cuts across virtually all age, racial, educational, socio-economic, and political lines – as well it should. Another interesting finding of that poll is that many Americans are now blaming Congress for this almost incomprehensible failing.

Every generation in this nation’s 235+ year history has had challenges to overcome, and those challenges have typically been quite different from those that the previous generation overcame. In spite of two world wars, a gut-wrenching and disastrous civil war, the Great Depression, and numerous other huge challenges, prior generations have somehow managed to meet the challenges of their time. Our generation (I am a not-so-proud baby boomer) faces what is perhaps the largest transformational change in world history. That change is the manner in which the experts who have studied globalization view this trend, which by all reckonings is in its very early stages. There can be little debate that the level of global competition that we face today is much greater than it was ten years ago and little doubt that the level that we will face in ten years will be much greater than we experience today. To say that we in the United States, and most especially our elected leaders, fail to grasp the magnitude of this challenge would be a gross understatement. In a previous article I wrote entitled “US Tax Code Hurts Competitiveness,“ I made the case that we have the very worst tax system on the planet from the standpoint of global competitiveness. There can be very little doubt that if we continue to stand pat with such a huge impediment to our global competitiveness, our economy will continue to languish in the face of ever increasing competition.

MarketFlagClearly the U. S. can and should be able to compete effectively in this new environment. We still have the best higher education system in the world, even if our secondary system is badly in need of reform. We have the best capitol allocation system in the world, at least when we can fight off crony capitalism and allow the free market to allocate capitol. Our intellectual property laws are the gold standard for the rest of the world and serve as a magnet for the world’s brightest and most creative minds. However, we cannot thrive in the 21st century when our tax system provides enormous economic incentives for companies to locate, expand, and produce their products elsewhere. The competition for everything is going global: capital, jobs, markets, educational opportunities — everything.

The response of some of our government officials would be amusing if the stakes were not so high. Under the leadership of Secretary Jack Lew, the Treasury Department is looking at financial penalties which could be used to stanch “corporate inversions.”2 West Virginia Senator Joe Manchin was recently widely quoted as saying that what his daughter did as CEO of a generic drug company should be illegal.3 So here we have the specter of our policy-makers in Washington creating enormous financial incentives for business leaders to transfer capital, plant, equipment, and jobs offshore — and these very same policy-makers demonize the business leaders who respond to the incentives that they put in place. What in the wide world of sports is wrong with this picture? The most encouraging aspect of this sad saga may be the WSJ/NBC finding cited above that Americans are beginning to place the blame where it belongs – on the Congressional policy-makers who are incredibly skillful at finger-pointing and evading responsibility for anything.

Here is the other bitter irony to all of this. As everyone who reads or has a TV in their home knows, the United States is a magnet for individuals from other nations seeking freedom, liberty, and economic opportunity. Our biggest problem is controlling the hordes who wish to reside in the USA for these reasons. However, on the corporate side, we have a problem with companies fleeing the nation that insists that they pay “their fair share” in taxes. Just what does this phrase “their fair share” refer to? The primary incentive for companies to locate elsewhere is that the United States (1) has the highest corporate income tax rate in the world, and (2) remains one of the few nations in the world that insists on taxing the world-wide income of its domestic companies. So U. S. based companies not only have to pay the highest corporate tax rate in the world on domestically derived income, but that same high rate applies to all their global income. When companies relocate their home headquarters to another country, they still owe corporate income taxes on income which originates in the United States (at, of course, the highest rate in the world). To most other nations, that would constitute “their fair share.” In other words, earn it here, pay taxes here; earn it there, pay taxes there. That is not the policy in the US, where the political ruling class insists that they and they alone have the right to define what “their fair share” means. So the response by our policy-makers to businesses fleeing an uncompetitive tax system is to hold these corporations hostage. Quite a contrast between our policies as it relates to individuals versus corporations, isn’t it?

There are countries in the world today which are growing their middle classes (some quite rapidly), even if they have never historically had much of a middle class. This is in stark contrast to the United States, which is seeing its middle class coming under assault, even though our middle class has traditionally been the foundation of our economy. How are they doing it?  It is fairly basic, as it turns out. They are pursuing economic growth as a major policy objective. However, when pro-growth strategies are put forth in the United States, they are immediately derided as “trickle down” and a return to failed policies of the past. In his outstanding book That Used To Be Us, Thomas Friedman poses the question of how the United States has fallen behind in the world it helped create. A big part of the answer is the abandonment of the formula for American economic success just at the point in time when that same formula (or at least parts of it) is being adopted around the world.

One question that I have pondered since I became a student of the FairTax is this one: How can we have such an uncompetitive tax system when the need for a 21st century tax system is so enormous and the amount of economic pain being felt in this nation is so extreme? How can our elected representatives go to such contortions to try to “tweak” the current system when they know (or should know) that there is already a solution to this vexing dilemma that they have merely to vote on and pass? The latest example of this is a proposal that House Ways & Means Chairman Dave Camp introduced some months ago. Chairman Camp had been working on this (no doubt with tax payer funded staff support) for quite some time – perhaps a couple of years. When finally unveiled, three different independent organizations4 scored the proposal and found that it would produce very little economic growth. If I were the chairman of Ways & Means and I ignored the pleas of constituents and the general public, and used considerable taxpayer funded resources to arrive at a tax plan which after much fanfare offered little economic benefit, I would be embarrassed and chastened. Does anyone think that Chairman Camp felt that way? Does anyone think that the Republican establishment criticized him in any way for wasting time that we could not afford to waste? Think about this for a minute – Congress has had the FairTax bill for more than a decade now, and yet they continue to waste valuable time doing pretty much anything they can to save the foundation of the current system. Why?

The answer is obvious, once you understand how Congress TaxDayFlaglgreally works. The current tax system, as uncompetitive as it is, and as big a job killer as it is, does one thing extremely well. It is a marvelous siphon to sweep cash from the bank accounts of well-heeled big money special interests and into the campaign coffers of career politicians and the K Streeters who facilitate this corrupt practice. The trade in tax preferences for campaign cash is an enormous industry, as evidenced by the tremendous growth in the cost of Congressional campaigns over the past few decades, as well as the increasing amounts of reported lobbying fees5.

The first six minutes of a recent episode of The Political Insiders highlights the problem perfectly6. In this segment, the three guest panelists lament the fact that jobs and the economy are extremely high on the list of the public’s concerns, but not so much with their elected representatives. The reason is that our “political ruling class” has largely protected itself from the financial distress that their policies have wrought on the rest of the nation. At one point, Pat Cadell refers to Washington, DC as “Versailles on the Potomac” and criticizes Congress for “feathering their nests while the nation goes into a slow decline.” Several excellent books have been written on the growing disconnect between Washington and the rest of the nation. The authors of those books are both Republicans and Democrats. Pollster Scott Rasmussen has done extensive polling on this subject and finds that large numbers of the American public believe:

  1. we would be better off picking names randomly from the phone book and sending them to Congress, rather than continuing with our current system of primaries and general elections,
  2. that their member of Congress does not care what they think about issues,
  3. that big government and big business work together in tandem at the expense of the general public, and
  4. that most members of Congress are corrupt.

Please note that the operative word for that last point is “most.” Not some, not a few, not many. Most. Let that sink in. For a nation in which respect for its institutions has been a key factor in the maintenance of law and order and a civil society, that is a chilling thought. And for a nation in which a self-reporting tax system must rely on the perception of at least some semblance of fairness that is critical to its continued operation, this is a trend which is ominous indeed.

If we lose government “of, by, and for the people”7 and allow it to be displaced by government of, by, and for the special interests, we will have lost a legacy that has been handed down to us at enormous cost in blood and treasure. If we allow our baby boomer generation to pass from this earth without assuring that the next generation will have at least as much opportunity for economic freedom and success as we were given by our parents’ generation, then future generations will have every right to curse our existence. If that happens, it will be because we allowed a very small group of self-entitled, greedy, and narcissistic individuals to hi-jack the finest model of representative democracy that has ever existed on this planet for their own personal power and financial success. This is not about partisanship; and those who see every public policy question through the prism of their hyper-partisanship are being used by the professionals who manipulate public perception for their own selfish personal motives. As several astute observers have noted, the biggest political divide in this nation is not between the political left and right; it is between the 1/10 of 1%8 who have hi-jacked our federal government at the expense of the other 99.9% of us. Will that vast and overwhelming majority wake up before it is too late or will we lose that precious legacy forever? I honestly do not know the answer to that question. What I do know is that I am privileged to continue to work with one of the finest groups of men and women that I have ever interacted with who want nothing for themselves and truly live John F. Kennedy’s immortal words: “Ask not what your country can do for you; ask what you can do for your country”. The other thing that I know is that we will never acquiesce to being the first generation in the history of this nation who will leave behind a country with less opportunity than the one we inherited. If that makes us fanatics, then I am proud to wear that label.

  1. http://graphics.wsj.com/wsjnbcpoll/
  2. http://www.nytimes.com/2014/08/06/business/Action-in-washington-on-corporate-inversions.html?_r=0
  3. http://www.nationaljournal.com/politics/senator-manchin-what-my-daughter-did-should-be-illegal-20140723
  4. The three organizations were the Heritage Foundation, The Tax Foundation, and JCT (Joint Committee on Taxation).
  5. https://www.opensecrets.org/lobby/
  6. https://www.youtube.com/watch?v=O32mF726bxg
  7. The Gettysburg Address http://www.abrahamlincolnonline.org/lincoln/speeches/gettysburg.htm
  8. This tiny fraction of the U. S population consists of the 535 elected members of congress, their staffs, the White House and its various administrative and cabinet agencies, the lobbyists on K Street and elsewhere, and the big money special interests who manipulate the system through campaign donations and lobbying fees. Scott Rasmussen refers to this group as “the political ruling class”. Mark Leibovich wrote a book entitled This Town in which he refers to them as “The Club”. Peter Shweizer’s term for them is “the Permanent Political Class” in his two books, Throw Them All Out and Extortion. Regardless of what label you use to refer to them, they are the minute minority who have exploited the public trust and perverted the concept of representative government for their own enrichment and aggrandizement.

FairTax replaces all federal taxes, eliminates IRS

The Missoulian

Consider this: visualize getting your whole paycheck (no federal income tax or FICA deductions) on every payday. Then, you decide how much federal tax you pay by what you choose to buy. FairTax does this for everyone. FairTax replaces – and is simpler and fairer than – the IRS’s 77,000-page federal income tax code. FairTax eliminates the IRS.

Now, let’s look at what taxes go away: The FairTax proposal in Congress now, HR25, replaces: 1. federal income, 2. payroll, 3. personal, 4. gift, 5. estate, 6. capital gains, 7. alternative minimum, 8. Social Security/Medicare, 9. self-employment and 10. corporate taxes. Yes, FairTax eliminates these and the IRS.

Big advantage: American workers take home their whole paychecks. Not only will more of us have jobs, but we will also take home 100 percent of our paychecks (less state income tax). No federal income or payroll taxes are withheld from paychecks, from pensions, from investment income or from Social Security checks.

Next time we’ll discuss: How the pre-bate completely un-taxes the poor’s (and everyone’s) spending up to the poverty level.

See for yourself: Answers to frequently asked questions, link here: http://fairtax.org.

– Edd Wigginton