WHEN SENIORS LEARN THE TRUTH—THEY LOVE THE FAIRTAX
As the years pass, many of us find that some physical things are not as easy as they used to be. For some, there is new meaning to Sonny Steele’s (played by Robert Redford) statement to Hallie Martin (played by Jane Fonda) in the movie Electric Horseman, “Some parts wake up faster than others.”
Many seniors know that the present income/payroll tax is a mess and see how it is a problem for the U.S. However, almost all seniors have a concern that any proposed tax reform, like the FAIRtax, might adversely affect them.
The people slopping at the trough of the payroll/income tax system have decided that they should fight the advocates of the FAIRtax not with the truth but with wild statements intended to scare people into opposition of real reform.
SOME FACTS ABOUT SENIORS IN 2018
Seniors are generally considered to be age 55 or over. In the past, many of these seniors retired at age 65 and then lived on an income from Social Security and any pension or savings and investment funds they had saved.
Social Security has become an important part of the retirement income for seniors. According to a fact sheet from the Social Security Administration:
- More than 85% of people 65 and older get Social Security.
- The average monthly Social Security income for all retired workers in 2018 will be $1,404. This is a $44 increase over last year
- Among elderly Social Security beneficiaries, 50% of married couples and 71% of unmarried persons receive 50% or more of their income from Social Security.
Here are some interesting numbers showing income of seniors:
Age of Household Median Income Mean Income
Households Aged 55-64 $62,802 $89,986
Households Aged 65-74: $47,432 $68,905
Households Aged 75 and Older: $30,635 $45,989
(Median income is determined by dividing into two equal groups, half with income above that amount, and half with income below that amount. Mean income is obtained by dividing the total aggregate income by the number of units in that group.)
Either because of a need to supplement their retirement income or maybe out of boredom, work after retirement is becoming an important part of retirement income. According to the Bureau of Labor Statistics as compiled by Pocketsense:
- Among persons 65 to74 years old, labor force participation is predicted to hit 32 percent by 2022, up from 20 percent in 2002.
- At age 75 and up, the rate will jump from 5 percent in 2002 to 11 percent in 2022.
HOW THE FAIRTAX REALLY AFFECTS SENIORS
Here are some facts the Swamp doesn’t want Seniors to understand:
- If prices were to actually increase after the enactment of the FAIRtax, the FAIRtax Act provides that each Social Security recipient will receive an increase in their benefits to offset the price increase to allow the Social Security recipient to have the same purchasing power as before.
- The FAIRtax eliminates the income taxation of Social Security benefits and income from pensions or investments.
- The FAIRtax eliminates the income taxation and Social Security taxation on the income earned by seniors who continue to work. (Even after retirement, seniors still have to pay not only income tax on their earnings from work but also Social Security/Medicare taxes of either 7.65% if an employee or 15.3% if self-employed.
- The prebate allows seniors to purchase new goods and services up to the poverty level with no FAIRtax being due.
- The FAIRtax only taxes new goods. A senior’s purchase of used goods results in no FAIRtax being paid.
- Instead of Social Security being bankrupt by 2030, the FAIRtax ensures that Social Security funding will continue.
EXAMPLES BEFORE AND AFTER THE FAIRTAX
Assume a married senior and his spouse, both 70, are each receiving $1,400 per month ($2,800 per month or $33,600 per year) in Social Security payments and are netting after expenses $2500 per month ($30,000 per year) from their own business. The combined income is $63,600.
Amount of Income Income Tax Social Security Net Spendable
(After Tax)
$63,600 $3,556 $4,590 $55,454
($63,600 -$25,300 (15.3 % of $30,000)
standard deduction
-15% of Social Security
of $5,040=$33,260 x10%
of first $19,500 and 12%
on balance)
Compare this to the same couple under the FAIRtax assuming that the couple spends every dime they make on new goods and services, prices do not decrease at all and Social Security payments are not increased by 23%.
Amount of Income Prebate Amount Net Taxable Amount FAIRtax Net Spendable
on $39,480 (After Tax)
$63,600 $24,120 $39,480 $9,080 $54,519
Under the FAIRtax, if the couple spends all of their earnings, nothing on used items—like a used car, and prices don’t go down, then there is a $938 advantage under present system. However, prices are almost certainly going to decrease because you have removed the costs of the income/payroll tax system from prices.
WHAT IF PRICES DECREASE BY 10%?
If prices decrease by 10%, then an item costing $100 will now cost $90. A quick way of estimating your purchasing power is to increase your net spendable income by 10%.
Amount of Income/Spending Prebate Amount Net Taxable Spending FAIRtax Net Spendable
on $39,480 After Tax
(Increased 10%) (Increased 10%)
$76,956 $24,120 $52,836 $12,152 $64,803
Now, the couple will be a minimum of $9,341 better off even if they don’t spend any money on used goods and spend every dime they make. This $9,341advantage will increase as they purchase used goods and/or save some of their earnings.
WHAT IF PRICES INCREASE?
Some people refuse to accept that prices are inflated by the costs of the income/payroll tax. They insist that the imposition of the FAIRtax will increase all prices by 23%.
The FAIRtax Act requires the annual Cost of Living Adjustment (COLA) for Social Security benefits to take into account any increase in the price level resulting from enactment of the FAIRtax. If the FAIRtax were to increase prices by 23%, then here are the results.
Amount of Income Prebate Amount Net Taxable Amount FAIRtax Net After Tax
on $47,208
$71,328 $24,120 $47,208 $10,858 $60,470
($63,600 +$7,728
increase in Social
Security Payments)
CONCLUSION
Because there is no longer an income tax on Social Security benefits when income from other sources exceeds a certain threshold and no longer an income tax and Social Security/Medicare tax on earnings, seniors are not harmed by the FAIRtax but are almost always no worse off and, in most cases, they do better.
This difference is even greater if the couple decides to spend less than all of their income or to spend a part of their income on used goods. The FAIRtax taxes at the point of consumption and if you do not consume you are not taxed. If you consume used goods—like purchasing a used car, then this purchase is not subject to the FAIRtax.
The FAIRtax empowers all of us and puts each of us in charge of how much we have for consumption. The FAIRtax also ensures that our economy will continue to prosper and our children and grandchildren will have the opportunity that we wish for all Americans.
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.”
WHAT CAN EACH OF US DO
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.
#121 USING THE NEWS TO BOLSTER THE FAIRTAX
This week The FAIRtax Guys spent a short time to reinforce their position on the dishonest ad from the Putnam campaign and then responded to phone calls, Facebook messages and recent tax related news items. Questions from viewers dealt with the Prebate, President Trump’s position on the FAIRtax, Neal Boortz’s current involvement with the FAIRtax, and other issues related to tax reform. Getting questions and feedback from the viewers is very rewarding and helps make FAIRtax Power Radio more timely and interesting.
The Guys also reviewed some of the current news articles dealing with the IRS’s hiring practices, the “new and not necessarily easier 1040,” student loans and the tax code, and other reports that help drive the point home that this income tax code has got to go!
Thanks to all of our viewers and especially those who participated.
Be sure to let everyone you know about the new digital TV FAIRtax Power Radio. Watch every Wednesday at 11:30 AM (ET). We are streaming to Facebook LIVE (www.facebook.com/fairtax). If you’re not a fan of Facebook, you can watch FAIRtax Power Radio on xcluded.tv at the same broadcast time - or any time.
FTPR podcasts for each show are posted on Spreaker (http://bit.ly/2oesbk7), iTunes & iHeart Radio every Friday morning. A free FAIRtax Power Radio app is available for iOS and Android.
PAST EPISODES - Wondering what we talked about in past episodes? Each episode is saved as both video on Facebook or Xcluded.tv and as podcasts on Spreaker, iTunes and iHeart Radio. Watch or listen later - or any time!
The Facebook videos are saved to a number of pages:
FAIRtax Official (https://www.facebook.com/FairTax/)
The FAIRtax Guys (https://www.facebook.com/thefairtaxguys/)
Democrats for FAIRtax (https://www.facebook.com/DemocratsForFairTax/)
and many others.
Xcluded.tv is a subscription based site which costs $30 per year and features a number of other shows along with FTPR with no commercial interruption.
Be a part of this cutting edge news/talk show featuring The FAIRtax Guys. Read further for links to the podcasts.
VOLUNTEER TO HELP THE VOLUNTEERS
It is the American people who must demand REAL tax reform in Congress. Your FAIRtax volunteers are trying their best to inform America about the FAIRtax! Please help us.
Tune into our video broadcast each Wednesday. If you prefer, you can listen to the podcast of the show later. You can listen to FTPR on any platform - Mac or PC, iPhone or Android. And it’s 100% free. Listen on Spreaker.com (http://bit.ly/2oesbk7), iTunes (http://apple.co/1Te8VdF) or iHeart Radio (http://bit.ly/2eqEG7y) on your computer or smartphone. The easiest way to listen to FTPR on your smartphone is by downloading the free FTPR app. Just search for “FAIRtax Power Radio” in your app store, download the app and start listening.
Remember, FTPR digital TV every Wednesday at 11:30 AM (ET) followed by the podcast on Friday morning. Please listen and tell everyone you know about the FAIRtax Power Radio. The FAIRtax: Once You Understand It, You’ll Demand It!
A GREAT WAY TO INTRODUCE NEWBIES TO THE FAIRTAX - AMERICA’S BIG SOLUTION
America’s Big Solution is a basic introduction to the FAIRtax and is meant for people of any age. And you can download it to your tablet or smartphone right now. Also available in print form. See below.
Do you know someone who would like an introduction to the FAIRtax and would prefer to read about it rather than search online for Tweets, Posts and Shares? If so, America’s Big Solution is their best choice.
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 of the Florida FAIRtax Educational Association.
You can buy an electronic version of ABS as follows: AMERICA’S BIG SOLUTION is available for only $2.99 for the Amazon Kindle (http://amzn.to/1WIRHry), the Barnes & Noble Nook (http://bit.ly/1XeG8bH) and Apple iOS (http://apple.co/1tnqK0P).
You can purchase a print copy at the same Amazon link above for $9.25. Regardless of whether you choose the electronic format or the print format, you’ll find AMERICA’S BIG SOLUTION will give someone the boost they need to begin their study of the FAIRtax and the suggested resources to learn more. Buy AMERICA’S BIG SOLUTION now!
LINKS TO MORE INFORMATION
These links will help you promote and support the FAIRtax, make yourself familiar with the links below. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
- The website of Americans for Fair Taxation (www.fairtax.org)
- Read the Summary of the Evasion Study.
- Welcome to the Online FAIRtax Community (member.fairtax.org)
- The website at which you can help make it happen. (www.bigsolution.org)
- The Facebook page for Americans for Fair Taxation
- The Facebook page for The FAIRtax Guys
- The Twitter page for Americans for Fair Taxation
- PopVox - Connecting people and lawmakers for more effective participation and better governing
- YouTube channel for AFFT
- YouTube channel for The FAIRtax Guys
- The Official FAIRtax Logo Store (www.fairtaxlogostore.org)
- Xcluded.tv - A new platform for FAIRtax Power Radio Video and other shows.
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