How To Explain
The FAIRtax Rate
The FAIRtax Rate
Those of us who favor The FAIRtax will share its advantages with our associates, family and friends. Few people fail to see the obvious advantages of The FAIRtax like:
- No income-tax returns to complete
- No IRS
- No Federal tax withholding or payroll taxes. You earn it, you keep it (your whole paycheck)
- Making Social Security solvent
- Eliminating tax loopholes sold to the highest bidder
- No hidden taxes
- Only applies to the purchase of new goods, not used ones
Heads nod in approval and they ask, “What is The FAIRtax rate?” You tell them 23%. They ask, “Why so much?” You explain 23% is necessary to bring in the same amount as the income-payroll-tax, i.e. The FAIRtax is revenue neutral.
They then ask, “So if I pay a dollar for coffee at the gas station, will I have to pay an additional 23%?" You say no, the 23% is an inclusive rate just like the federal income-tax rate is an inclusive rate. This means 23% of each dollar you spend on new goods or retail services is The FAIRtax.
Then you explain if you bought an item at a store for $1 you wouldn’t pay 23% but instead 30%. You explain $0.30 is 23% of $1.30. At this point there are a number of people who stop listening because they are thinking there is no way they can survive if all of their purchases cost 30% more.
Most of the time, they don’t hear you when you explain these facts:
- They are already paying a sales tax because to make the $1 purchase, they had to earn between $1.25 and $1.40 to have $1 left over after Federal tax withholding and payroll taxes were taken from their paycheck
- Prices will be at least 10% lower as they no longer include the costs of the income-payroll-tax-system
- Because of The FAIRtax prebate/tax credit, only the wealthiest people will ever pay FAIRtax rates approaching 30% out of their own pockets.
Effective Tax Rate
The Only Way
To Compare Tax Systems
The Only Way
To Compare Tax Systems
As David Boone, the developer of a FAIRtax Calculator insists, when you have different tax systems like The FAIRtax and the federal-income-payroll-tax, the only way to examine their effect is to look at the effective tax rate we are paying under each system.
What is the “effective tax rate”? Under the income-tax payroll-tax-system, your effective tax rate is your total income and payroll tax paid divided by your total earnings, not just your taxable earnings but your total earnings.
For example, a family of 4 earns $50,000 and pays $5,000 in income and payroll taxes, $5,000 divided by $50,000 is 10%. So, 10% is the family’s effective tax rate.
With The FAIRtax, if the same family spent all $50,000 on new goods and retail services, you would obtain their effective tax rate after deducting The FAIRtax prebate/tax credit for the family.
For example, the family would receive The FAIRtax prebate/tax credit of about $32,000 meaning $32,000 of their purchases of new goods and services would not be taxable. To calculate the effective tax rate, you subtract $32,000 from $50,000 and then multiply the remaining 18,000 by 23% and get $4,140. Then you divide $4,140 by $50,000 and arrive at 8%, the effective tax rate for the family.
By determining your effective tax rate, you can compare the impact of the 2 tax systems on your family. It isn’t the percentage of the tax which matters most but instead the effective tax rate percentage. This shows how much of your earnings you have to spend, not the gross amount you earn.
Of course, in the above example we are ignoring several things:
- The family with $50,000 to spend under The FAIRtax will be able to purchase about $55,000 worth of goods and services if the prices go down by 10%, a number even opponents of The FAIRtax don’t challenge
- If $5,000 of the $50,000 in spending was for payments on a used car, this reduces the amount of FAIRtax paid by $1,150 because used goods aren’t taxed. The effective tax rate drops from 8% to 6%
If you like and desire freedom, and who doesn’t, the above example points out a major advantage of The FAIRtax; You determine the amount of tax you pay, not the D.C. elite.
If you adopt David Boone’s approach and really concentrate on having people look at their effective tax rate, more of them will see why The FAIRtax makes sense for them financially. Will all of them see it? No, some just don’t want to see the truth or they aren't willing to spend the brief time necessary to understand how The FAIRtax Re-Empowers them and everyone else.
We must remember what Mark Twain said, “Never argue with an idiot. You'll never convince the idiot you're correct, and bystanders won't be able to tell who's who”. Rather than argue with people unwilling to look at the facts, we need to spend time with people who are willing to look at the facts.
Many movements in the past promoted ideas we now all agree made sense. For example, overthrowing the rule of a king, the repeal of slavery, freeing millions of people from the control of the repressive Soviet Union, and women’s suffrage.
All of these movements were opposed by powerful interests who felt their wealth and power would be greatly diminished if the movement succeeded. Many advocates of each movement became discouraged and quit their efforts. Many of the movements lost their best leaders to age, sickness or worse fates.
Generally, in the case of the American revolution and the ending of slavery, it took a war, but in the other movements it just took people who persisted. As Victor Hugo said, “Nothing is more powerful than an idea whose time has come".
When will The FAIRtax’s time come? We don’t know, but we do know if we don’t persist in our efforts, the time will be greatly delayed or might not come at all.
U.S. Supreme Court Justice Louis Brandeis said, “If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence".
Your next phone call or visit to a politician will be the one that makes the politician understand they must put the interests of the nation ahead of their own interests. This awareness will only come if enough of us get out of bed and take the next action to promote The FAIRtax,
Let’s energize the entire United States and show people they will control the amount they pay in tax. Pass The FAIRtax—the only “Fair tax”!
It's time for Congress to have serious discussions about replacing the FAILED income-payroll-tax-system with The FAIRtax, the only truly "Fair tax"!
The author George Bernard Shaw said these words in a play he 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?”
President Trump, “Embrace the FAIRtax, the only Fair Tax the only fair tax and the only real tax reform! Stand up to the Swamp. They will oppose you anyway because they see you as a threat. What have you got to lose?”
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.”
Take Back America Again! Pass The FAIRtax Now!
FAIRtax Online Resources
Americans For Fair Taxation - Home Page
Americans For Fair Taxation - Facebook Page
Americans For Fair Taxation - YouTube Channel (The Chairman's Report is now posted here)
Americans For Fair Taxation - Twitter Page
Americans For Fair Taxation - Chairman's Report Podcast on Spreaker posted Fridays at 6am-ET
Americans For Fair Taxation - Chairman's Report Podcast on Apple
Americans For Fair Taxation - Chairman's Report Podcast on iHeart Radio
Official FAIRtax Logo Store
The FAIRtax Guys - Home Page
The FAIRtax Guys - Facebook Page
The FAIRtax Guys - YouTube Channel
PopVox - The People’s Voice On All Things Legislative
Read Evasion Study Summary
The FAIRtax Guys
Ron Maiellaro & Bob Paxton perform their FAIRtax Power Digital-TV Show & Podcast. When the show streams to Facebook, The FAIRtax Guys plus a few AFFT experts are responding “live” to your comments and questions. A free app is available for iOS and Android.
Digital TV: Tue-8PM-ET Americans For Fair Taxation - Facebook Page
Podcasts: Tue-9PM-ET Posted on Spreaker, Apple Podcasts & iHeart Radio.
Digital TV are available on The FAIRtax Guys
This week's Episode #189 - "What Does PopVox Say About Congress?"
Why isn’t Congress working on REAL tax reform, specifically The FAIRtax? Part of the reason is they claim the "Tax Cuts & Jobs Act of 2017" was the greatest tax reform bill in a generation. Was it?
Did it rid us of the income tax? Did it eliminate the IRS? Do businesses still incur huge tax compliance costs?
The TCJA of 2017 was tax relief, not tax reform.
Using Congress.gov and Popvox.com, The FAIRtax Guys look at some of the distractions Congress has preventing it from working on REAL tax reform. An examination of some of the frivolous proposed legislation shows why Congress seems to avoid The FAIRtax in favor of naming Post Offices and trying to get the President's tax returns.
Congress is wasting its time and our money in the pursuit of inconsequential legislation while they conveniently ignore the greatest tax reform proposal of all time - The FAIRtax, HR 25.
Listen carefully to this episode so you will know what to say to your Representative about REAL tax reform.
There’s always more in FAIRtax Power Radio such as a reminder of the promotional items available now at Our Store and a review of Jim Bennett’s Grassroots Corner Report.
What Can Each Of Us Do?
Call the local and DC offices of your Representative and 2 Senators. Use the following script:
- I am sure Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
- After they assure you 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 10 years.
- Since most will say they don’t believe their boss has seen the study, drop off a copy, email a copy or click Read Evasion Study Summary and copy/paste the link into an email.
- 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 simplifying the income tax will handle the problem.
- Explain, when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax. So, it’s unlikely they are going to pay 30-40% when they were paying 0% because they have already decided it’s okay to cheat.
- Say, 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 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 the way to handle evasion without unleashing the IRS audits is The FAIRtax.
- If you meet with your Representative or attend a town hall and ask these questions, you will be even more effective.
American's Big Solution - The FAIRtax Primer America Needs
Hard to believe but there still are people who have not heard of The FAIRtax. For those people, America’s Big Solution provides a starting point in their study of The FAIRtax and is meant for any age.
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 The Florida FAIRtax Educational Association. You can buy an electronic version for only $2.99 for the Amazon Kindle, the Barnes & Noble Nook and Apple iOS. You can purchase a print copy at the same Amazon link above for $9.25.
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Thank you for staying FAIRtax strong!
Yours In Liberty!
Chairman, Americans For Fair Taxation
Help FAIRtax Get In The Presidential Debates in 2020
Enacting the FAIRtax must be a prominent topic on the Presidential Debate stage. We did it before, we can do it again, but we need your help!