Bernie Sanders is running for President again and some think he will be the nominee. Unlike their opinion of some of the other candidates, most people, whether they agree with him or not, don’t doubt his sincerity. He seems to really believe his proposals are good for the greatest number of people. One of the things he believes, is the great majority of people who are working hard and making close to the U.S. median household annual income of $61,372, deserve more help from the government.
Supporters of The FAIRtax agree these median income earners, and all other Americans, deserve more help. However, rather than creating more government programs with their inherent inefficiencies and abuses, Senator Sanders, the 1st step should be providing all Americans a more sane and beneficial tax system.
All Taxes Are Consumption Taxes
A family has the amount it earns, after deducting any amounts paid in taxes, to use for consumption. Some taxes, like income and payroll taxes, are taxed prior to consumption. They are withheld before you receive your check.
Other taxes, like The FAIRtax, are levied at the time of consumption. You receive your entire paycheck and when you make a purchase of new goods or retail services, you pay The FAIRtax.
Whether the tax is levied prior to consumption or at the time of consumption, the levied tax reduces the amount remaining for family consumption. For example, the U.S. Census Bureau calculated the 2017 U.S. median income was $61,372 or $5,114 per month. For the following examples, we are assuming there is no state income tax.
According to the H&R Block tax calculator, this median family, filing jointly, with 2 minor children, will owe only $50 in federal income tax and $4,666 in Social Security-Medicare taxes—the most regressive federal tax, totaling $4,716 of income-payroll taxes. This leaves the family with $56,656 or $4,721 per month for consumption.
When the federal income-payroll tax system is replaced by The FAIRtax, the family receives their entire $61,372 or $5,114 per month. In addition, they will receive $648 on the 1st of every month. This $648 is the “prebate” or tax credit reimbursing the family for The FAIRtax on the first $33,820 of spending on retail services and new goods. This means, every month the family has $5,114 plus $648 for a total of $5,762.
Since The FAIRtax is paid at the time of consumption, when the family makes purchases of new goods and retail services they pay for the purchase and the amount of The FAIRtax.
Comparisons Of Both Systems
While the amounts spent vary widely depending on where you live, housing and transportation costs are 2 expenses common to medium income families with 2 children. According to information at Newbalance.com, the average monthly mortgage payment is $1,022 and the average monthly car payment is $479. If you have 2 cars, then the average car payments are $958 per month.
Since over 90% of the houses purchased aren’t new and since many people purchase used vehicles, we will assume the purchased home isn’t new and the vehicles are used. The final assumption is the family saves 6% of their income which is the average amount estimated by the St. Louis Federal Reserve.
Income/Payroll Tax
| Annual Income | Taxes | Mortgage $1,022 per Month |
Transport $958 per Month |
Savings | Net Remaining For Consumption |
| $61,372 | $4,716 | $12,264 | $11,496 | $3,680 | $29,216 |
The FAIRtax
| Annual Income plus $7,779 Prebate Amount | Taxes | Mortgage $1,022 per Month |
Transport $958 per month |
Savings | Net Remaining For Consumption |
| $69,151 | 0 | $12,264 | $11,496 | $3,680 | $41,711 |
Of course, under The FAIRtax, if the family makes purchases of new goods and retail services, they will only have $32,117 available for consumption after paying the 23% FAIRtax. ($41,117 x .77%).
In the above analysis, it is important to note the amounts available for consumption under The FAIRtax assume most prices will not be reduced. Most people who have reviewed the effect of eliminating the income-payroll tax system and adopting The FAIRtax believe competition will cause most prices to be reduced a minimum of 10%. This is the minimum amount they believe is included in the price of goods purchased by consumers, eliminated by The FAIRtax.
If there was a decrease in price of 10%, the amount remaining for consumption purchases 10% more. Forgetting any impact on home mortgages or transport costs, this means the $32,117 available in The FAIRtax example will allow the family to purchase $35,329 of new goods and retail services.
Instead of the family only having $2,901 more to use for consumption, they would have $6,113 more. Also the following is true:
- No individual tax returns need to be filed.
- You only pay tax when you purchase new goods.
- We stop exporting jobs overseas and make U.S. produced goods more competitive without tariffs.
- You get your entire paycheck and decide how best to spend the money.
- Many other benefits.
Conclusion
- Senator Sanders, doesn’t The FAIRtax help the forgotten middle-income people you believe are being abused by the current system? Yes!
- Don’t we make their lives better and more prosperous by eliminating the income-payroll tax system and replacing it with The FAIRtax? Yes!
- Actually, aren’t they receiving effectively a 10% raise in their spendable income? Yes!
Since The FAIRtax will bring jobs back to the U.S. and increase the growth of the economy, there will be more money coming to the Treasury. This will allow you to fund programs like free college tuition and student loan relief. How can Senator Sanders or anyone who truly cares about the American people not say, “It’s time to pass The FAIRtax, the only “fair tax”!
The author George Bernard Shaw said, "You see things; and you say “Why”. But I dream things that never were; and I say “Why Not”.
We say to you President Trump, “Embrace The FAIRtax and 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! Pass The FAIRtax Now!
Online Resources
These links will help you promote and support The FAIRtax. 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.
Americans For Fair Taxation - Home Page
Americans For Fair Taxation - Facebook Page
Americans For Fair Taxation - Twitter Page
Americans For Fair Taxation - YouTube Channel
Americans For Fair Taxation - Chairman's Report Podcast on Spreaker
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
FAIRtax Power Radio Schedule: (A free FAIRtax Power Radio app is available for iOS and Android). During the streaming, Ron & Bob will be live, responding to your comments and questions, so we look forward to your participation.
Digital TV: Tues-8PM-ET Americans For Fair Taxation - Facebook Page
Digital TV: Tues-8PM-PT The FAIRtax Guys - Facebook Page
Digital TV: Wed-7PM-ET The FAIRtax Guys - YouTube Channel
Podcasts: Fri-6AM-ET Posted on Spreaker, iTunes & iHeart Radio.
Digital TV & Podcasts are available on The FAIRtax Guys - Past Shows
Episode #166 To The New Co-Sponsors, Thank You!
In less than a month, we have 3 new Co-Sponsors of HR 25, The FAIRtax Act of 2019. Watch or listen to find out who they are and what you can do to help increase the number of Co-Sponsors of The FAIRtax. The FAIRtax Guys discuss how easy it is for individuals to get involved and the many options they have to make a difference. One person can make a BIG difference. You can be a “difference maker.”
Recent comments from viewers encouraged The FAIRtax Guys to relaunch the “Slogan Contest”. There is a lot of talent in the viewership and The FAIRtax Guys would like to use some of that talent to come up with a catchy slogan that helps get the message out. America loves slogans. So get involved and “slogan away”. Click "Here" to email us your favorite slogan about the IRS.
There’s always more in FAIRtax Power Radio so don’t miss an episode.
Keep in mind, when the show streams to Facebook, the comments are live. The FAIRtax Guys plus a few AFFT experts are there to answer your questions.
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!
Respectfully,
Steve Hayes
Chairman, Americans For Fair Taxation