Dave Barry is a popular author best known for his ability to expose myths with humor. Barry posed the question, “I understand that Congress is considering a so-called ‘flat’ tax system. How would this work? He then gave his answer, “If Congress were to pass a ‘flat’ tax, you’d simply pay a fixed percentage of your income, and you wouldn’t have to fill out any complicated forms, and there would be no loopholes for politically connected groups, and normal people would actually understand the tax laws, and giant talking broccoli stalks would come around and mow your lawn for free, because Congress is NOT going to pass a flat tax, you pathetic fool.”
Barry’s skepticism about real tax reform is shared by many who support the FAIRtax. After all, the FAIRtax best fits Barry’s description of a flat tax—no loopholes, no complicated forms and is easy to understand.
Many times, we have heard this comment about the FAIRtax, “It makes so much sense but Congress will never pass it.” Then they may add that Congress is corrupted by the money contributed by groups lobbying for tax advantages and will not do anything to change the system. Or, that Congress will never relinquish the power that the income tax gives them over the people.
While there is truth in these observations, the real power of Congress is the power to spend money. There were legions of lobbyists and favor seekers long before there was an income tax.
What Is Really Preventing Tax Reform
In my opinion, the real reason that Congress is unwilling to consider real tax reform, the FAIRtax, is not because they don’t believe it can be better for their constituents. No, the real reason is that they are afraid of the reaction from the voters if suddenly the curtain is pulled back and people start to see the real cost of government.
Today the federal taxes are hidden. Social Security payroll taxes are paid 50% by the employee and 50% by the employer. If you are self-employed, you pay 100% of the taxes. The employee’s share is taken from his or her income before it is received. The employee probably doesn’t pay attention to the amount of Social Security taxes paid by their employer. Income taxes are withheld from income. Since both of these amounts are withheld prior to the employee getting the check, most employees just assume that their pay is what is left, not what they earned prior to the deductions.
The Disguised Taxes Paid by Americans
We often speak with people who say, “I don’t pay any income tax.” While we know that this is not true, the present system makes it very difficult to explain that all of us are paying more federal taxes contained in the increased prices of goods and services.
The additional costs caused by the employer portion of the payroll tax, corporate taxes, and the costs of compliance with the present complicated system have to be passed on to consumers in order for the businesses to make a profit and stay in business.
From a bureaucrat’s point of view, it is great that no one really knows how much the prices of goods and services are increased by the present income/payroll tax system. The prices of some products may increase by as much as 20% and others may be increased only by 10%.
When you add to this the myriad of other federal taxes on gasoline, on your phone bill and almost every other service you receive, no one really understands the true total amount of taxes they pay.
Ironically, this system of hiding the true costs of our federal government is very effective and almost no one can really do the math to see what they are actually paying in federal taxes.
The FAIRtax Exposes Congress and Taxes
Contrast the present smoke and mirrors system with the FAIRtax. Because all of us are consumers, all of us will see multiple times a day the true cost of government. We are all paying and we can all easily see the cost of specific government programs because it is now a case of simple math. How much of the 23% FAIRtax rate is needed to pay for defense, for Medicare, for Social Security? A simple calculator showing the amount allocated to a spending program divided by the amount raised by the FAIRtax shows the percentage of the FAIRtax that pays for the program. If you reduce the amount spent on the program, then you can see how much lower the FAIRtax rate can be.
Suddenly, instead of no one paying attention to spending, which is what most politicians want, the cost of the federal government will be easily explained even to school children.
Why Congress Will Have To Adopt A New Tax System
In spite of their fear of showing the real costs of government, the one thing that politicians fear more is that the money they revel in spending will dry up. This is happening with the present income tax/payroll tax system.
Evasion is at $600 billion per year and growing. Part of the reason is that nearly 40% of the workers will not be employees but independent contractors in the next ten years. Independent contractors have many more opportunities to exaggerate deductions and/or not report income and as society now sees nothing wrong with “cheating on taxes”, the trend is going to continue.
In fact, at some of the events at which I speak, people come up to me and say that they feel stupid for not evading taxes like their neighbors.
The alternative is the FAIRtax. This is a tax system that will not only be fair to all and perceived as fair, but will also be much easier to collect. Remember 90% of retail sales are made by less than 10% of the retailers. Will there be evasion? Of course, but it is likely that the evasion rate will be closer to that experienced in California. California collected $50 billion in sales tax and had a 5% evasion rate.
Critique of the Present System
Ogden Nash, the great poet and humorist, wrote some lines that encapsulate many feelings about the present system.
Abracadabra, thus we learn
The more you create, the less you earn.
The less you earn, the more you’re given,
The less you lead, the more you’re driven,
The more destroyed, the more they feed,
The more you pay, the more they need,
The more you earn, the less you keep,
And now I lay me down to sleep.
I pray the Lord my soul to take,
If the tax-collector hasn’t got it before I wake.
We need the FAIRtax and more Members of Congress are seeing it.
America’s Big Solution
The BigSolution.org website is working well and we are seeing more and more people respond to this message. America does need a big solution and the FAIRtax is the big solution! The new tool that will allow all of us to get more of our friends and neighbors familiar with the FAIRtax is being tested. We know that if most people learn about the FAIRtax, they will become supporters.
1040 Club
To those of you not familiar with the 1040 Club, AFFT is asking people to contribute $10.40 per month to AFFT. This provides a steady funding platform and allows us to spend our time not trying to raise money but actually working with groups to help make passage of the FAIRtax a reality. Thanks to each of you who have joined the 1040 Club. You are ensuring that Americans For Fair Taxation can continue to promote the FAIRtax.
If you are not a member of the 1040 Club, or if you are a member but want to join for someone else, please go to this link and sign up.
FAIRtax Power Radio
Recently The FAIRtax Guys interviewed Randy Fischer who is a local Marion County, Florida volunteer, a Board member of FFTEA, a Board member of AFFT and the Chair of the AFFT Communications Committee. The main subject of the interview was the new AFFT campaign “America’s Big Solution” and the new website, BigSolution.com. We split the interview into three segments which are now included in Programs 26, 27 & 28 of FAIRtax Power Radio. The links to these programs are included below.
I recommend all FAIRtax Leaders spend the time to listen to Randy explain how the new campaign was conceived, how it was developed and what we hope to achieve with it. If you want to be an effective FAIRtax leader, you need understand this new campaign and FTPR is one of the most efficient ways to gain that knowledge.
To listen to FTPR on SoundCloud (free and audio only) go to these links:
FTPR 26 http://bit.ly/20Revmn
FTPR 27 http://bit.ly/1oYMmOp
FTPR 28 http://bit.ly/1L6YAyg
To “watch” the radio show on YouTube (also free) use the following links:
FTPR 26 http://bit.ly/1TvTi0B
FTPR 27 http://bit.ly/1XIZB1y
FTPR 28 http://bit.ly/1mTEbkL
AFFT National LOGO Store
Your FAIRtax Store carries both 6 foot and 8 foot banners made of 13 ounce commercial grade vinyl material printed on one side and hemmed all sides with grommets spaced every 12 inches. The placement of the grommets allow hanging/displaying in any event environment.
The photo below shows a banner hanging from a standard 8 foot long event table at a recent AMAC Convention in Central Florida. Please note that these banners are only 28” in height which allows hanging from a standard table without hitting the floor.
Don’t forget, for every banner ordered, you will receive a free FAIRtax Thermos with carrying case valued at $24.98. The SS Thermos is double wall constructed for insulation of hot or cold liquids and has a screw on top, spill-resistant lid plus pop up lid for pouring. The carrying case is black leatherette zippered with an adjustable strap. Both the SS Thermos and case have FAIRtax logos.
Visit your National FAIRtax Store frequently and secure supplies for educational meetings, debates, town hall meetings, and other political events. Don’t forget to order extra supplies of FAIRtax Palm Cards – never run out of Palm Cards when the opportunity exists to educate the public.
Thank You For Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure that AFFT is paid ever larger amounts from people paying for us to send their offers to our supporters.
Again, we are making every effort to ensure that we work with only reputable companies. If you feel that any FAIRtax-sponsored email is objectionable, please email us at info@fairtax.org and tell us why. You can also opt to not receive these sponsored email messages but still receive FAIRtax emails.
Thank you for staying FAIRtax strong!
