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Chairman's Report - June 8, 2018

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Chairman's Report - June 8, 2018

FOLLOW THE MONEY—THIS TELLS WHY WE HAVE THE INCOME/PAYROLL TAX
 

In the movie, All The President’s Men, Hal Holbrook was playing “Deep Throat” and famously said, “Follow the Money.”  Interestingly enough this was not in the Woodward and Bernstein book but added by the screenplay writer.


However, in one version or another it has been good advice when trying to explain the motivations behind actions by people that appear to be difficult to understand—like why was so much effort and attention spent on creating a more complex new tax law.  Any intelligent person knows that all of the supposed benefits of the new tax law could be more easily achieved by the FAIRtax.  In addition, we would greatly reduce the estimated $9 trillion in evasion over the next decade and eliminate the need for a trade war by taxing imports the same way they are taxed by our trading partners.


The Members of Congress on the tax-writing committees know the FAIRtax and why it is better.  Kevin Brady, the Chairman of the Ways And Means Committee, was a co-sponsor of HR25, the FAIRtax bill, until he became Chairman.  I have personally met with Members on the Senate Finance Committee and even spoken with Orrin Hatch, the Chairman.

 

WHAT CONGRESSIONAL STAFFERS MAKE
 

Having been in many D.C. offices over the years, there is a real excitement about working in an atmosphere where the reins of government are held.   The offices are filled with mostly young people who are running around acting like they are really doing something important—and sometimes they really are.


There is also something very satisfying when a young person under 30 is treated with respect because of their boss, but respect anyway, by lines of people who are trying to obtain some special treatment from Congress.  This feeling of power is intoxicating and makes up for having to live in cramped quarters with other aides and then work long hours because of the very high cost of living in Washington, D.C.


The national average salary for a congressional staffer is around $59,500 a year. The average entry-level salary is about $49,000 a year, with top yearly salaries coming in at $70,000 or higher. Salaries often increase by length of employment, meritorious service, or both.  


For many of these staffers, their starting pay is probably higher than it would have been if they worked at a job in their home towns.  When you add on all of the government benefits they receive and days off, it can be a cushy job.  It is also in high demand and normally you have to “know someone” to get the job.  


However, there are some staffers who make $170,000 per year—like Mark Prater who is referred to below.  Members can authorize higher pay to staffers as long as it is less than the Member’s salary.


WHERE THE MONEY TRAIL LEADS


However, the real reason for working in D.C. is often the ability to leverage their experience in helping create laws and regulations by moving to high paying lobbyist jobs.  They then get paid to either help their clients understand the complicated regulations and laws they helped write and for lobbying their former friends who remain as staffers in Congress.


An article written by Aaron Lorenzo for Politico entitled, “GOP Staffers Who Wrote the Tax Bill Cash in with Lobbying Gigs,” sums it up.  Mr. Lorenzo says:

  • Mark Prater, the Senate Finance Committee's longtime GOP chief tax counsel, was making $170,000 until he became the new managing director at accounting firm PWC of its tax policy services group.  He will be joining Dave Camp, a former chairman of the House Ways and Means Committee, 
  • Brendan Dunn, Mitch McConnell’s top aide, was making $168,000 until he joined Akin Gump Strauss Hauer & Feld in May as a partner in its public law and policy practice area.
  • Shahira Knight, who was at the negotiating table on behalf of the White House as the tax bill developed, is heading to The Clearing House, a banking policy and lobbying group.
  • Dave Stewart, Ways And Means staff director, recently moved to the lobbying firm Squire Patton Boggs.
  • Emily Schillinger, former Ways And Means communications director, was making $164,000 until joining the American Investment Council.
  • Zachary Rudisill, tax counsel to Sen. Rob Portman (R-Ohio), a Finance Committee member was making $123,000 before he went to Akin Gump.
  • Randy Herndon, who was tax and budget counsel to Sen. Pat Toomey, was making $119,000 and went to the specialty lobbying shop Capitol Tax Partners. 


Although we don’t now have the income numbers the above staffers will receive from their new employers, we can be confident in stating that they must be receiving a significant increase in their incomes.  In fact, some staffers are receiving a raise of $100,000 per year to start and can expect to double or triple that amount in the near future—if they produce results for their firms.


CONCLUSION


In 2006, Nancy Pelosi was slated to become the Speaker of the House in 2007.  She proclaimed that she wanted to “drain the swamp.”  One of her ideas was to sever the connection with White House and Congress staffers who left and immediately went to work for lobbyists.  Her proposal was met with resistance from both Republican and Democrats who complained that they were able to attract top people only if there was the promise of being able to go to work for lobbyists at much higher salaries.


While being valuable as a lobbyist is related to being able to access the Members of Congress and their staffs, the value is greatly enhanced if the lobbyist also can be perceived to decipher the incredibly complicated laws that the former staffer helped create.


When we understand this reality, it becomes apparent that there is absolutely no incentive for a top Congressional staffer to support passing the FAIRtax.  Imagine what would happen to the staffer’s job prospects if he or she participated in creating a simple tax system that eliminated all of the complexity and enormous compliance costs associated with the income/payroll tax system?


Not only would there be no need for specialized knowledge, there would also be no interest in hiring someone who helped eliminate perhaps the most profitable area for lobbyists—the income/payroll tax system.  


And this upset would not only be directed toward staff members but also toward any Member who helped pass the FAIRtax and who later retired, or was retired by the voters, and came looking for a lobbying job.


Some of us have thought that the solution is to elect men and women to Congress who would demand an end to this corrupt system where people are rewarded for adding complexity and cost to all of our lives.  Over the years, we have seen that many of these newly elected Members of Congress were strangely silent about the reforms they had promised in their campaigns.


The reason is that the present system will go to any lengths to protect itself.  A Member speaking out against the Swamp will find himself or herself having a “friendly” conversation with a more senior Member who explains why the new Member must go along to get along.  They explain that if the Member wants an office other than in the basement or wants help with getting committee assignments or wants help in raising money for the next election, the Member must conform to the “rules.”


The only thing that we can do is constantly expose the system and demand that the Member’s attempt to justify this system that rewards themselves and their friends at the expense of the rest of us is shown for what it is.  Only the most jaded of these Members can explain the actions in D.C. as being beneficial to the rest of us with a straight face.   We just need to constantly show them that we know what they are really doing.


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.

 

THE FAIRTAX GUYS NEW PLATFORM

As we discussed previously, this week saw the beginning of an all new format for The FAIRtax Guys.  Every Wednesday at 11:30 AM (ET) The FAIRtax Guys will be broadcasting from Big Daddy Studios in Gainesville, FL and streaming to the internet to Spreaker (the audio platform we have used for two years), Facebook LIVE and eventually Xcluded.com.  More on Xcluded in weeks to come. 

So this means you can listen LIVE on Spreaker (http://bit.ly/2oesbk7) or Facebook (https://www.facebook.com/FairTax/)  If you can’t listen LIVE, you can tune in later; the broadcast on Spreaker will be saved as a podcast and also distributed to iTunes, iHeart Radio & YouTube.

Same with the Facebook LIVE video; it will be saved so you can listen/watch at any time. 

Not only will we be LIVE but eventually we will be set up to take phone calls from the public.  And we will do our best to land interviews with influential people to see what they think of the only REAL tax reform plan in Congress, HR 25, The FAIRtax.  

Be a part of this cutting edge news/talk show featuring The FAIRtax Guys.  Stay tuned to get more details as this develops. 

 

LAST WEEK’S EPISODE  (#110)  Last week’s podcast was the last traditional “audio only” effort by the FAIRtax Guys.  In last week’s podcast, find out what is happening to FAIRtax Power Radio as of June 6, 2018 at 11:30 AM.   We interviewed Christian Fabiani who is the producer at Big Daddy Studios in Gainesville, FL. Listen and learn about the big changes and then tell all your friends and family to watch FAIRtax Power Radio LIVE at 11:30 AM (ET) on Wednesday, June 6 on Facebook or listen live on Spreaker.com (http://bit.ly/2oesbk7).  

If you missed the June 6th LIVE broadcast, fear not. It was saved to Spreaker and Facebook and we will be back every Wednesday at 11:30 AM (ET).

PLEASE HELP US SPREAD THE WORD ABOUT THE FAIRTAX!

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.  


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.


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.  


We post a new episode every Friday morning.  Please listen and tell everyone you know about the FAIRtax Power Radio.  


The FAIRtax: Once You Understand It, You’ll Demand It!


THE ELECTRONIC INTRODUCTION TO THE FAIRTAX - 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.


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.


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