Confusion—Perhaps The Main Reason Candidates Oppose The FAIRtax
Every four years we are told by Presidential candidates they are going to provide benefits to every possible group. This year some, but not nearly all, of the promised benefits are:
- Medicare For All which will eliminate the need for private insurance and be delivered at no or minimal cost to all Americans
- Forgiveness of student loan debt
- Free health care for all illegal aliens in the U.S.
- Free college tuition
- Increased Social Security benefits
- A guaranteed annual income aka Universal-Basic-Income
Of course, when the candidates are asked about how they plan to pay for all these benefits, they wave their hands and say, “Oh, the rich will pay for it”. Some of the candidates, when pushed, admit some part of the proposed benefits may have to be paid for by increasing the size of the national debt, but they quickly say "it’s not a problem”. Obviously, they don’t want the recipients of these benefits to think it will cost them anything.
Most Americans have learned it’s very important to monitor their “disposable income”, not what they make, but what they have left over after deducting federal, state and local taxes. Once they have determined their disposable income, then they know what they can spend.
If they don’t voluntarily not spend more than they have, society has a way of enforcing basic economic rules. They find their credit is no longer available, they start getting calls from collection agencies and may even lose their home, car or other assets.
The American people have been promised “free” benefits before and have ended up paying for them with higher taxes or they watched as the politicians just increased the national debt. Many Americans are very skeptical about the promises the candidates are making to them, but they really can’t evaluate how the costs of these benefits might affect them.
They want to believe in a “free lunch”, and even though most Americans are uneasy about the spiraling national debt, they accept the assurances of the Ruling Class that the size of the debt isn’t important. The problem with our income-tax-system is it’s so confusing that all of us just shake our heads and admit that we don’t really know if the “rich” will pay for it all or not.
How Much Will These Programs Cost
And Who Will Really Pay?
And Who Will Really Pay?
In a study written by David Burton for the Heritage Foundation entitled, “It Is Arithmetically Impossible to Fund the Progressive Agenda by Taxing the Rich”, the projected costs of the proposed programs and the funding sources are examined. Government data, not opinion is used in the carefully researched study. David points out:
- The cost of the proposed programs will be between $105 trillion - $150 trillion dollars over the next 10 years
- Imposing a 100% tax on the earnings of all incomes over $1,000,000 per year would bring in only $986 billion dollars. That’s not enough to pay for even the projected $1.1 trillion dollar annual deficit for 2019, much less cover the cost of any new programs
- Confiscating all remaining after-tax income of those with incomes of $500,000 or more would increase federal revenues by about $1.4 trillion dollars annually. This would be enough to eliminate the federal deficit but not much more
- If, however, the federal government were to confiscate all remaining after-tax incomes of those earning $200,000 or more, that would increase federal revenues by $2.7 trillion dollars annually
- Only $463 billion dollars of after-tax retained earnings by corporations would be available for confiscation if the rate was 100%
- Once such confiscatory taxes were imposed, these taxpayers would elect not to work, otherwise earn income, or realize capital gains upon reaching the relevant thresholds because they would get to keep none of it
- Once state and local income and payroll taxes were taken into account, earning additional income would actually cost these taxpayers money since the effective tax rate on incomes over the threshold would exceed 100%
- Even if people continued to work when all of their income was being confiscated, these taxes would only fund between 37% and 72% of the costs of the proposed new programs
What If The Fairtax Was The Law Of The Land Now?
The people making these promises to us are intelligent people. They actually believe we will look at all the presents they are offering us and “trust” them to find the money to fund them in a way that doesn’t make us pay more or harm anyone.
Politicians know none of us really understand the income-tax-code [even the politicans don't fully understand it] and how it works. In fact, they count on our not understanding it to make us believe somehow they are going to convert tin into gold with a few clever adjustments to the income-tax-code.
Under The FAIRtax, all of us would be paying a percentage of our retail purchases of new goods and services. It wouldn’t take any Einstein-type calculations to figure it out. Simple fifth grade math does it.
For example, if each percent of The FAIRtax is going to bring, for simplicity, $200 billion dollars into the U.S. Treasury, and the proposed new spending is $1 trillion dollars, you divide the 1 trillion by 200 billion. The result is you would need to add 5% to the 23% rate to pay for the new $1 trillion dollars of spending. Assuming we insisted new spending be currently paid for, on the day after The FAIRtax rate increase, all of us would see the additional tax on every retail purchase of new goods and services.
The only way to change this would be to add the $1 trillion dollars to the national debt. Then if the interest on the $1 trillion dollars is 3%, this would mean that an additional $33 billion dollars would need to be raised. This would only increase the 23% rate by $33 billion dollars divided by $200 billion dollars. This calculation assumes we never have to repay the debt and can keep getting gullible people to finance our debt.
We elect people who will represent us and they are supposed to carry out our wishes. We all wish for health, happiness, and freedom from crime and huge medical bills. We want our children to have the opportunity to have an education and then find a good job. We want our children and grandchildren to see their lives are actually better than ours.
Politicians want us to be like the driver going down the street listening to music who hears a strange knocking sound coming from the engine.
The driver has two choices. One is he can look for an auto repair shop and have the problem diagnosed. The other is he simply turns up the volume of the music until he can’t hear the knock. The driver knows this is not the best thing to do, but some part of him thinks if he doesn’t hear the knocking it will not be a problem, at least not for now.
Before long though, the driver will go to start his car and find it won’t run because the knocking led to a total breakdown of the engine. He only delayed the time when a small problem would become a huge problem and most likely a catastrophe.
If our decision is to be like the guy who turns up the volume on the radio, then why even have elections? Just appoint people to the office for life and these people will determine what is best for us. It’s much more honest than electing people and not really understanding our federal-income-tax-system when we need such an understanding to really determine if they are doing a good job and should be re-elected.
If we really want to take responsibility for the mess our politicians have created, we must start by lifting the veil of confusion around how we raise money to fund our federal government. If you raise money through The FAIRtax, there is no confusion about how much government costs you and I.
If someone says they want to forgive the student debt and it will require all of us to pay an additional 3% of FAIRtax for 4 years, maybe we will accept the rate because the majority of us agree. At least we will understand it.
Isn’t it time the rest of us said to The Ruling Class, “We demand the facts about raising money to fund programs!".
It's time for Congress to have serious discussions about replacing the FAILED income-payroll-tax-system with The FAIRtax, the only truly "Fair tax"!
The author George Bernard Shaw said these words in a play he wrote, You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”
Isn’t it time for us to ask, “Why not?”
President Trump, “Embrace the FAIRtax, the only Fair Tax the only fair tax and the only 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 Again! Pass The FAIRtax Now!
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Read Evasion Study Summary
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This week's Episode #184 - "STOP Social Engineering via the Tax Code!"
Congress Critters + Income Tax = Social Engineering.
It's time to rewrite this equation!
Is the purpose of the tax code to collect our taxes in the most Simple, Transparent, Fair manner as possible? Of course it is and that’s the way it should be!
However, many in Congress use the tax code to steer the American society in a particular direction or to promote one of their pet projects. Spurred on by the gobs of campaign cash from lobbyists, members of Congress are proposing changes to the tax code at the rate of over 10 per day while they are in session.
- Do we wish to encourage construction of buildings? Then we pass an accelerated depreciation tax law which assumes the building is declining in value when in fact it may be increasing in value
- Do we wish to encourage participation in political campaigns? Then we provide for partial credits for such contributions in the tax law
There’s always more in FAIRtax Power Radio such as a reminder of the promotional items available now at Our Store and a review of Jim Bennett’s Grassroots Corner Report.
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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Yours In Liberty!
Chairman, Americans For Fair Taxation
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