Chairman’s Report - April 19, 2019

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  • Source: FAIRtax
  • 04/09/2021


This is part of a quote from Abraham Lincoln.  The full quote is, You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.

The leaders of Congress and the Swamp hope that Lincoln was wrong.  They know that April 15th brought everyone’s attention to just how bad their baby, the present income/payroll tax system, is. 
They want to fool all of the people all of the time.  In advance of April 15th, they hurriedly passed legislation that they try to spin to tell us, “We know it has had many faults but we have fixed them so it is ok now to have the income/payroll tax system.  Just trust us.”
With great fanfare they released a statementH.R. 1957, the Taxpayer First Act of 2019, bipartisan, bicameral legislation that redesigns the Internal Revenue Service (IRS) for the first time in more than 20 years to better serve taxpayers. Oversight Subcommittee Chairman John Lewis (D-GA), Ranking Member Mike Kelly (R-PA), Ways and Means Chairman Richard Neal (D-MA), Ranking Member Kevin Brady (R-TX), and bipartisan members of the Oversight Subcommittee introduced the measure. 
The bill purports to do the following:

  • Establish the IRS Independent Office of Appeals to resolve federal tax controversies without litigation;
  • Require the IRS to develop a comprehensive customer service strategy;
  • Continue the IRS Free File Program (but seems to prevent the IRS providing a filing service to compete with Turbo Tax and H & R Block;
  • Modify tax enforcement procedures that address issues such as the seizure of property, issuing a summons, joint liability, referral for private debt collection, and contacting third parties;
  • Modify procedures for whistle-blowers;
  • Establish requirements for cybersecurity and identify protection;
  • Prohibit the rehiring of certain IRS employees who were removed for misconduct (I really shake my head at this one).
What is this bill really acknowledging?  Again, it is clearly telling everyone, “We know it has had many faults but we have fixed them so it is ok now to have the income/payroll tax system. Just trust us.”

The Swamp and its allies in Congress know that if they control what is passed to the people by their controlled media, that the advice of Joseph Goebbels, Hitler’s propaganda expert, may allow them to continue their lucrative con a while longer. 
Goebbels said, “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
The Swamp will work with their friends in the media to convince the people that this bandaid they are boasting about transforms a failed system into a good system.
The bill does not address the evasion problem.  Everyone knows, including Congress and the Swamp, that the income/payroll tax system is losing more and more money to illegal evasion.  Even this statement from Dr. Cebula’s study is beginning to sound too conservative, “Our estimated Gross Tax Gap for the period 2017 through 2026 lies within the range of $6.24 trillion (based on a growth rate that matches the average inflation rate) to $9.17 trillion (based on the historical growth rate of the Gross Tax Gap).
If we look at the average of the historical growth of the tax gap, $9.7 trillion, over ten years and look at the CBO’s projected deficit of between $900 billion and $1 trillion dollars for the next decade, we see that most of the projected deficit would be eliminated if we greatly reduced evasion.
As more people learn the truth about the income/payroll tax system, more will demand that April 15th is not a dreaded day but simply a day marking the middle of April. 


One of the groups that is not excited about the idea of replacing the failed income/payroll tax system with the FAIRtax is the group that make their money working with income tax preparation and income tax planning.  In an Accounting Today article, Michael Cohn quoted a study by consulting firm Korn Ferry that showed this data about tax professional annual salaries:

  • Tax analyst (one to two years experience): $60,050
  • Intermediate tax accountant (two to four years experience): $66,960  [missing a number here]
  • Senior tax accountant (six or more years experience): $99,625 

Korn Ferry senior client partner Tom McMullen said, “Being a tax professional is a big job as their clients entrust them to understand all aspects of the tax code and to give the best advice on financial matters beyond simply filing tax returns.  Our analysis shows that as they gain more experience, work on a variety and more complex tax matters as well as advising and influencing their customers, they are rewarded accordingly.”
These “tax pros” are certainly not in favor of any system that eliminates their niche—even though they, more than others,  know how absurd and incomprehensible  the present income/payroll tax system really is.

  • No April 15th is complete without looking at some of the jokes about our present income tax system: 
  • How can you tell when a tax auditor is trying to trap you into a confession? Answer: When his lips are moving.
  • A little boy wanted $100 badly and he decided to write a letter to President Clinton requesting the $100. The President was so impressed, touched, and amused that he instructed his secretary to send the little boy a $5.00 bill.  The little boy was delighted with the $5.00, and sat down to write a thank-you note. It said: Dear Mr. President, Thank you very much for sending me the money. However, I noticed that you had to send it through Washington, DC and as usual, those jerks deducted $95.
  • Two junior doctors were involved in a fight in the hospital. A senior consultant had to pull them apart. "What's all this about?" asked the consultant angrily. "It's the Tax Inspector in C ward," said one. "He's only got 2 days to live." "He had to be told." said the second doctor. "I know," said the first, "but I wanted to be the one to tell him!"
  • How many God-fearing, tax-paying, law-abiding IRS employees who respect the rights of taxpayers does it take to light a bonfire? Both of them.


  • Q: How do tax accountants make a bold fashion statement?
  • A: Wear their dark grey socks instead of the light grey.
  • Q: And the difference between tax avoidance and tax evasion?
  • A: Jail.
  • How do you know you have a great CPA? He has a tax loophole named after him.
  • The tax advisor had just read the story of Cinderella to his four-year-old daughter for the first time. The little girl was fascinated by the story, especially the part where the pumpkin turns into a golden coach. Suddenly she piped up, "Daddy, when the pumpkin turned into a golden coach, would that be classed as income or a long-term capital gain?"
  • We’ll try to cooperate fully with the IRS, because, as citizens, we feel a strong patriotic duty not to go to jail.— Dave Barry
  • The only two things that scare me are God and the IRS.— Dr. Dre
  • The Internal Revenue Service is more ruthless than the Gestapo. Abolish the IRS! Stamp out organized crime!— Evel Knievel
  • I am proud to be paying taxes in the United States. The only thing is — I could be just as proud for half the money. — Arthur Godfrey, entertainer
  • “People who complain about taxes can be divided into two classes: men and women.”— Unknown
  • A tax loophole is “something that benefits the other guy. If it benefits you, it is tax reform.”— Russell B. Long, U.S. Senator
  •  “The hardest thing in the world to understand is the income tax.”— Albert Einstein, physicist
  • “Where there is an income tax, the just man will pay more and the unjust less on the same amount of income.”— Plato
  • “Income tax has made more liars out of the American people than golf.”— Will Rogers, humoristThe art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers, with the smallest possible amount of hissing.— Jean-Baptiste Colbert

I recall reading a statement by a member of the Navajo tribe who said, “If you want to know what a government official saying ‘Trust Us’ means, we trusted them and just look at what the government did to my people.”
The Swamp and its allies in Congress continue to shout and yell that they have made the income tax much better.  That is like saying that people who are starving and don’t have enough to eat are not overweight.  It is true that the “reforms” promised are better, but they are still not enough to save a failed system that is hurting all of us.  They say “Trust Us”.
Abraham Lincoln asked a group, How many legs does a dog have if you call his tail a leg? A member of the group answered, Five.   Lincoln shook his head and stated, Saying that a tail is a leg doesn't make it a leg.

Saying this new legislation will magically make the income/payroll system into something wonderful doesn’t make it so.  It is still the same failed system with a new coat of paint.  Like the Navajo member, we know what “Trust Us” really means.
Isn’t it time to take back control from D.C.?
President Trump, “Embrace the FAIRtax and real tax reform!  What have you got to lose?”
It is time to
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.”


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.


#156 Lunch & Taxes at the FAIRtax Hub
You’re at lunch with a FAIRtax guy and an IRS agent. How do you think the conversation will go?  As you might expect, the IRS agent is at a severe disadvantage because of the complexity of the income tax code.  The FAIRtax guy, however, breezes through his explanation of how the FAIRtax works.
The FAIRtax Guys wish to thank Paul Wizikowski of the FAIRtax Hub on YouTube for creating the five wonderful videos with the above scenario.  They are very short (about one minute each), somewhat humorous and each one drives home an important difference between the current behemoth of an income tax and the simple, fair and efficient FAIRtax. 
The FAIRtax Guys play each video and then comment on the contents and the implications of the video.  And as you’ll see, they have a real good time picking apart the income tax.
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