HOW MUCH WILL THE WALL COST EACH TAXPAYER?
We know that the principal reason the federal government has been shut down is because of President Trump’s demand for $5 billion in funding for the wall along the southern border. President Trump’s supporters believe that the wall will prevent hundreds of billions of dollars of costs associated with illegal drugs smuggled into the country. Democrats believe that the wall is not needed and sends the wrong message to immigrants.
Under the present income/payroll tax system, it is very difficult for any taxpayer to know how much the wall or any other federal expenditure will cost them—assuming that it is actually paid for by tax receipts and not with borrowed money.
Using numbers obtained from the Office of Management and Budget, The Balance, a website that publishes information on finances, provided the following data about federal government revenues:
- For the current federal fiscal year, October 1, 2018 through September 30, 2019, the federal budget is $4.407 trillion. The federal government will receive $3.422 trillion in revenue creating a $985 billion deficit;
- Income taxes contribute $1.622 trillion or 49 percent of the $3.422 trillion;
- Social Security, Medicare, and other payroll taxes add $1.238 trillion or 36 percent.
- Corporate taxes provide $225 billion or seven percent;
- Excise taxes and tariffs raise $152 billion or four percent;
- Earnings on Federal Reserve holdings contributes $55 billion or two percent;
- Estate taxes and miscellaneous income provide about two percent.
- The FAIRtax numbers are much simpler. It is designed to be revenue neutral so if the FAIRtax had been enacted last year, federal revenues would be $3.422 trillion but mostly from one source. Gone would be the confusing array of taxes that make it so difficult to determine one’s actual tax burden that most people just give up trying.
Under the present system, if the President said to you that the government needed to bring in an additional $1 trillion to balance the budget, most of us would not have any idea how this additional tax will affect us. Do we raise it by increasing the income tax rates?
If so, since we now take in $1.622 trillion in personal income taxes and $225 billion in corporate income taxes, for a total of $1.847 trillion, we would need to collect over 50% more in income taxes for a total of $2.847 trillion. Now we get into the arguments. Do we do what Representative Alexandria Ocasio-Cortez recommends and raise the highest rate from 37% to 70% on all incomes over $10 million per year?
In an interview with Politifact, Mark Mazur, director of the Urban Institute-Brookings Institution Tax Policy Center, said that would affect about 16,000 Americans. He said that assuming all 16,000 Americans just agreed to pay, Ocasio-Cortez’ proposed tax would raise just $72 billion, less than 10% of the amount needed to balance the budget.
According to the Pew Institute, people making over $200,000 paid over 50% of the $1.622 trillion in personal income taxes or about $881 billion dollars. If we doubled their income tax rate, then in theory we would be able to raise another $881 billion. To raise the $1 trillion we need, we would probably have to double the income tax rate on people making only $150,000 annually.
Of course, others might say that we should double the tax rates of all Americans, but this is sure to be opposed by many who say that the rich should be paying more.
BALANCING THE BUDGET UNDER THE FAIRTAX
Even though the economics are clear that under the FAIRtax the economy will grow faster and more people will benefit than under the present income/payroll tax system and retail prices will be reduced a minimum of ten percent, we can set that aside and just assume no change in prices or economic growth for this example. If we wanted to raise $1 trillion under the FAIRtax, the math is simple.
If 23% will generate $3.442 trillion, each 1% will yield about $149.652 billion. If we want to raise $1 trillion, we would need to increase the FAIRtax rate from 23% to 29.7% ($1 trillion divided by $149.652 billion equals 6.7).
Of course, if the predicted economic growth occurred and if prices do go down by at least ten percent, then the actual increase in the needed rate would be less.
Even though the Swamp and Congress spend a lot of time trying to discredit anyone who points out the problems of the deficit and rapidly increasing national debt as some sort of lunatic, most Americans know that eventually the debt will have to be paid.
Contrast this attitude with the response to being told that the income tax rates would have to double. No one would believe that the income tax increases were going to be fair and that many would somehow avoid paying these taxes. There would also be even more tax avoidance and evasion and instead of raising an extra $1 trillion of revenue, the government would probably collect no more than $500 trillion.
If we protected lower income people by increasing the prebate and if there was some way of ensuring that the budget would be balanced if the FAIRtax rate was increased, most Americans would likely be willing to pay a higher sales tax rate to actually balance the budget. They would know that the FAIRtax would be much more fair than the income/payroll tax and it is much harder to evade. Not that paying more sales tax will be fun, but at least they will be more confident that everyone is sharing the “pain.”
The fundamental common sense possessed by most of the American people is why so many people not connected to the Swamp or Congress are going to hear about the FAIRtax and say, “That makes sense.” We just have to persist and keep educating our friends and neighbors that this is the only tax system that will give America a chance to pay off its debt and preserve our economic future.
Finally, to the question of what the $5.6 billion for the wall would cost each taxpayer under the FAIRtax, you take the percentage that $5.6 billion is of $3.442 trillion, .00162%, times 23% equals .037% of the 23% for the wall.
You can see that each budget savings of $149.652 billion would allow the 23% rate to be reduced by 1%. With the FAIRtax, all of us can directly see how much these government programs are costing each of us. Of course, if you don’t want the people to see you won’t like this but let the Swamp try to explain that position to us.
We say to President Trump, if you tell people what the cost would be to each American paying the FAIRtax, wouldn’t that be much easier to explain. President Trump, “Embrace the FAIRtax and real tax reform! What have you got to lose?”
It is time to PASS THE FAIRTAX!
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:
WHAT CAN EACH OF US DO
- 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.
FAIRTAX POWER RADIO
#142 Why Dems (& Repubs) Should Embrace the FAIRtax.
Question - Why do most citizens, Democrat and Republican, embrace the FAIRtax while the Democrats in Congress refuse to cosponsor the legislation? Why do we let the extreme polarity in Washington get in the way of the only REAL tax reform plan in Congress, HR 25?
The FAIRtax Guys tackle these and other difficult questions in this episode of FTPR. But this time we use the work of two Democrat leaders to make the case for the FAIRtax.
Listen as we review a letter from Jessica Wexler, who was an Obama campaign worker, and an article written by Connor Carney, a self proclaimed liberal Democrat, to explain why everyone, including all Democrat legislators, should embrace and promote the FAIRtax.
This is Part 1 of a two part series on why the FAIRtax should appeal to people of all political stripes. Political polarization is really hurting our country by slowing down REAL tax reform via the FAIRtax. Help us end the madness by sharing this episode with everyone.
If you believe the FAIRtax is good for America, let others know by turning them onto FAIRtax Power Radio - the ONLY weekly FAIRtax digital TV show in the country! 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 the show on www.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. Since it’s a podcast, you can download it and play it whenever it’s convenient for you.
The FTPR weekly episodes are Shared to a number of Facebook 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
www.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.
Please help us educate as many Americans about the FAIRtax as possible. Be sure to tell everyone you know about this great new format for FAIRtax Power Radio. Whether you watch the weekly video or listen to the weekly podcast, this is a great way for more Americans to learn about the best tax reform plan in Congress at this time.
Tune into our video broadcast each Wednesday. Or, 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!
NEED A WAY TO INTRO THE FAIRTAX TO A NEWBIE?
HERE IT IS - AMERICA’S BIG SOLUTION
America’s Big Solution provides a starting point in your study of the FAIRtax and is meant for people of any age. And you can download it to your tablet or smartphone right now. It’s 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 in a booklet 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 (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)
- www.xcluded.tv - A new platform for FAIRtax Power Radio Video and other shows.
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Thank you for staying FAIRtax strong!