THE BIGGEST REASON WHY WE NEED THE FAIRTAX!
All of us know that there are many reasons to pass the FAIRtax and we don’t need to list them here. However, in this the world’s greatest economy we have a growing crisis. According to a national survey conducted online by Harris Poll on behalf of CareerBuilder:
- 78 percent of U.S. workers live paycheck to paycheck to make ends meet
- Nearly one in 10 workers making $100,000+ live paycheck to paycheck
- More than 1 in 4 workers do not set aside any savings each month
- Nearly 3 in 4 workers say they are in debt today - more than half think they will always be
- More than half of minimum wage workers say they have to work more than one job to make ends mee
Rosemary Haefner, chief human resources officer for CareerBuilder, states: "If workers are constantly thinking about their financial struggles, their quality of work can decrease, and it can take a hit on their morale and productivity.”
This table shows that 50% of the families in the United States make $58,849 or less. 75% of the families make $105,580 or less.
THE SOLUTION—MORE INVESTMENT, HIGHER PRODUCTIVITY AND HIGHER WAGES
While cutting taxes for these struggling workers really helps, it is not the real answer. Wages need to go up and the way they have gone up through history is by increasing productivity. For almost all businesses, the only way to effectively increase the productivity of American workers is to make investments in new facilities and equipment.
There are numerous studies which point out that an increase in productivity is directly correlated to increased wages. Here is a statement from the Indiana Business Review:
“The capital expenditure per production employee variable is highly significant and positive in all four models. Capital expenditures are positively correlated with more production employees, more total hours for production employees, higher production employee wages per hours and higher total wages per production employee.”
Here is an example. A worker uses a machine to make ten widgets per hour. If the business gets more capital, it can purchase a machine that will allow the worker to make 20 widgets per hour. The worker has just become twice as productive as before. This increase in productivity allows the business to be more competitive and leads to economic growth. This also leads to an increase in wages.
This is not news to business owners. However, they are hampered in attracting capital because of our income/payroll tax system.
A HUGE SOURCE OF INVESTMENT
The Tax Justice Network has analyzed the amount of money that has been secretly moved off-shore by individuals and estimate it to be as much as $36 trillion. This sum is hidden from the countries in which the individuals reside. However, this money is not just sitting in bank accounts, but most of it is actively being invested around the world.
A sophisticated international investor looking at an investment in a country that promises to pay a 10% annual return considers a number of factors about the country in which the investment will be made. Among these are:
- Political stability
- Economic stability
- Currency stability (Will the currency be of less value each year?)
- Inflation rate
- Restrictions on access to the investment principal and return on the investment
- Applicable tax rates
In simple terms, assume the 10% investment return is subject to 30% tax in one country and 20% tax in another country. If the factors listed above are similar in both countries, investing in the lower tax country will provide an 8% net return as opposed to a 7% net return in the higher tax country.
HOW THE FAIRTAX WILL ADDRESS THE PROBLEM
Because the FAIRtax eliminates the income/payroll tax system, the investor’s 10% return will not be reduced by taxes and the investor will make 20% to 30% more if they invest in the United States.
This will create a huge incentive for much of this “hidden” money to invest in the United States. Investment managers will be seeking ways to invest and much of it will be directed to companies and businesses. In fact, there will be investors chasing business opportunities—like a seller’s market in real estate.
These companies and businesses will use the investment funds to upgrade factories, purchase new equipment and become more productive. As they become more productive, their employees will earn more and fewer will have to live paycheck-to-paycheck.
INVESTMENT MULTIPLIER EFFECT
It is also important to understand that the international investment doesn’t just have an impact equal to the amount of the investment. It has a multiplier effect. This means that any increase in public or private investment spending results in an effect on the economy much greater that the amount of the investment. For example:
- An investor invests $100,000 in a business.
- The business uses this $100,000 to purchase equipment.
- The seller of the equipment uses the $100,000 to pay for the manufacture of the equipment and some of the money is sent to sellers of equipment parts and other parts of the money are used to pay its employees who will assemble the equipment.
- The recipients of the money paid by the company spend the money and the recipients of these funds in turn will spend them with others.
The calculation of the actual investment multiplier is more complex but generally the effect on the economy from the investment is believed to be from three to five times the original $100,000.
(An easy to follow explanation of the multiplier effect on economic growth can be found at the Tutor2U website.)
At this point, it is not possible to quantify the amounts of international investment that will flow into the United States after the enactment of the FAIRtax. However, if you were going to make an investment in a country, the first question is why would anyone who has, probably illegally, hidden funds off-shore to escape taxation in their country, be interested in paying taxes on their investment return?
Then factor in that the United States is considered to be:
- The most politically stable country
- The largest economy in the world
- The greatest military superpower
- The least likely to confiscate investment
- The least restrictive with respect to the movement of funds
- The safest currency in the world
If you assume that only 20% of the $36 trillion hidden dollars, $7.2 trillion, are invested in the United States, and we assume the lowest multiplier effect of three times $7.2 trillion, $21.6 trillion, is coming into the economy looking for investments.
Since our Gross Domestic Product is estimated to be $20 trillion in 2017, $21.6 trillion is going to rapidly increase the growth of the economy and improve the well-being of all of us.
A lot of this benefit is going to the workers who are now living pay-check to pay-check. However, there are two groups who aren’t really in favor of this—the Swamp and their minions in Congress. They are making huge amounts of money and don’t have to worry about how to cover their bills.
Helping most Americans in this manner will not benefit the Swamp and their minions. When the FAIRtax is enacted, they will lose the ability to charge enormous fees lobbying for the income tax. Many of them will have to find real jobs that pay based on their actual ability to produce products—like the rest of us, and not on their access to Members of Congress.
Until the American people actually demand that their elected Members of Congress put the interests of us ahead of their friends in the Swamp, there will be no passage of the FAIRtax.
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.”
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.
#118 HERE WE GO AGAIN
A few people seem to think that seniors will be hurt by the FAIRtax. Using a white paper from the fairtax.org website, The FAIRtax Guys explain how seniors will benefit from the FAIRtax just like all American citizens. Listen to the 10 points that support the case for this.
Also, you know a politician is desperate when they demagogue the FAIRtax. This is happening in Florida in the Republican primary race for Governor. One candidate is a current cosponsor of the FAIRtax and the other is using deceptive advertising trying to scare people who may not understand the FAIRtax. So The FAIRtax Guys have decided to create a “Rogues Gallery” of politicians who demagogue the FAIRtax in order to gain a political advantage. If you know of a politician who is guilty of this, please let us know and we will induct him or her into the “Rogues Gallery of FAIRtax Demagoguery.” If you can, please send a link to their deceptive ad so we can use it on our digital TV show and point out to people how they are being lied to.
When someone lies about the FAIRtax, we use that as a “teachable moment” to help people learn more about the FAIRtax and how to handle deceptive advertising. DON’T MISS THIS IMPORTANT EPISODE.
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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 will 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 can’t watch live, then 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.
A new podcast follows the live show every Wednesday. Please listen and tell everyone you know about the FAIRtax Power Radio. The FAIRtax: Once You Understand It, You’ll Demand It!
THE FAIRTAX BOOK FOR NEWBIES - 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
- 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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