Chairman’s Report - June 22, 2018

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  • Source: FAIRtax
  • 04/09/2021


When you hear that the Gross Domestic Product (GDP) is 2.9% or 1.8%  you may feel that they are just numbers.  In fact, the average person probably only has a vague idea of what makes up the GDP numbers we hear about in the media.  Simply put, the annual GDP measures the size of the US economy – it is the market value of all goods and services produced by labor and property within a country in a year.  It includes both private and public consumption, investments, government expenditure and net exports. 

A higher rate of real GDP growth (adjusted for inflation) has historically been linked to the creation of more wealth for all income levels of the nation’s population.  This is why you hear politicians either criticizing the low rate of GDP growth or taking credit for a higher rate of GDP growth.  


As you can see from this chart projecting the 2018 Value of GDP for the world’s biggest economies, the U.S. is still the largest economy:



According to an analysis by the Committee for a Responsible Federal Budget, the latest economic report by the Congressional Budget Office (CBO) predicts:

  • GDP to expand by 3.0 percent  in 2018 and by 2.9 percent in 2019 , compared to the June 2017 projections of 2.2 and 1.7 percent, respectively.
  • GDP growth of 1.5 to 1.8 percent each year after 2020, with an annual average of 1.8 percent over the 2018-2028 period.

AFFT has been the beneficiary of many economic studies that are summarized here.  One of the papers summarized is by
Kotlikoff and Jokisch.  They concluded that the FAIRtax will raise: 

  • Marginal labor productivity and real wages, over the course of the century, by 18.9 percent;
  • Long-run economic output by 10.6 percent;
  • The wealth of low-income households by 26.7%;
  • The wealth of middle-income households by 10.9%;
  • The wealth of high-income households by 4.7 percent;

Another paper summarized is from Arduin, Laffer & Moore Econometrics.  Art Laffer and Steve Moore advise President Trump today.  Their study found:

  • Investment will be 33 percent higher in the first year and 41 percent higher by the tenth year than under the current tax system.;
  • GDP is up to 24.4 percent greater than under the current system by the tenth year.

The Beacon Hill Institute updated their study in 2015 and estimated that GDP growth over the next ten years would be 10% to 15% higher under the FAIRtax.

According to the IMF, the U.S. GDP will be $20.4 trillion dollars in 2018. The following chart shows the effect on the growth of the GDP if it grows at the CBO’s estimate of 1.8% and then if GDP at the end of ten years is 10% higher and if at the end of ten years is 15% higher.  The last column shows that GDP would be $28.05 trillion in ten years if it grows at the average growth rate of 3.19% (from 1948 to 2018)— this is essentially the same GDP amount that the FAIRtax would increase GDP  if it were to increase the GDP by 15%.



GDP (CBO forecast)

10% Higher

15% Higher

Average of 3.19%


$20.40 trillion

$20.40 trillion

$20.40 trillion

$20.40 trillion


$24.42 trillion

$26.84 trillion

$28.03 trillion

$28.05 trillion


Many economists in Washington, D.C. criticize President Trump for having the audacity to say that removing restrictions on business and lowering tax rates for business and individuals will result in more economic gain and more prosperity.  Most economists have never worked outside of government or think tanks and have never had to find the funds to meet a payroll on Friday when they don’t have the money in the bank. 

They discount the idea that people will work harder if government lets them keep more of the money they create after taxes.  

Sometimes after listening to an “economist” try to explain why the economic numbers are not what they predicted, I recall a quote by Ronald Reagan.  "A friend of mine was asked to a costume ball a short time ago. He slapped some egg on his face and went as a liberal economist."

If the recent tax cuts have helped, think what the FAIRtax will do.  Under the FAIRtax:

  • You get to keep all, not part, of the money you earn;
  • No more taxes on savings and retirement accounts; 
  • No more income tax returns;
  • No more Social Security and Medicare withholding;
  • No corporate income tax;
  • No more spending time and resources on the income tax consequences of business decisions but now on just making the best economic business decision;
  • No more unfair competition with imports;
  • No more having to carry the cost of U.S. taxes in the prices of exported U.S. products.


As President Kennedy said, “A rising tide lifts all boats.”  Economists and politicians may disagree on the way to raise GDP and what is a “normal” GDP, but they agree that all of us are more prosperous if the growth rate of the GDP is higher. The FAIRtax grows the GDP at a faster rate.  

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:
  • 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.



If you’d like to keep your whole paycheck with no withholding - You Might Be a FAIRtax Fan!  If you’d like to eliminate the IRS forever - You Might Be a FAIRtax Fan!  We hope you enjoyed Bob “Paxworthy” explain the major advantages of the FAIRtax is this very creative way.  Be sure to let everyone you know about the New and Improved FAIRtax Power Radio.  Watch and Listen every Wednesday at 11:30 AM (ET).  We are streaming to Facebook LIVE ( and Spreaker (

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Telling your friends and relatives about our free weekly podcasts is a great way to help us garner more support.  It is the American people who
must demand REAL tax reform in Congress.  We must inform America about the FAIRtax!  Please help us.

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