There is an ongoing debate among economists about how the 2017 tax reform bill impacted the tax burden for the highest earners.
The papers and opinions are flying about and the fact “smart people” are spending so much time on this reminds me of why I decided to stop doing income-tax related work in the 1980’s.
The work was profitable, and knowing how to arrange transactions in a legal way lessening the amount of Federal tax my clients had to pay was very valuable to those who were willing to pay for the advice.
Almost all of the CPA’s and attorneys I worked with in the tax planning business were very bright people. They could have devoted their skills to helping create businesses or provide guidance to business owners on how to expand their businesses.
Instead, their talents were largely devoted to helping business owners minimize their tax liability, thereby increasing the amount of money a business or individual could keep. Sometimes, the ideas proposed were not good for the overall growth of a business, but were all but FORCED on these businesses by the income-tax laws.
At many Washington, DC think tanks, we have pretty much the same problem. Some very bright people are not working on things which could improve production or solve problems. They’re not figuring out how to make U.S. products more competitive, or working on solving problems in education, health, or improving the well-being of starving nations. Instead, they are spending countless hours debating, essentially, the definition of “is” as President Clinton famously said during a deposition.
These economists and many other “talking heads” are arguing about the progressivity of the income-tax code. In an article written by Scott Ganz and Alex Brill, Resident Fellows at the American Enterprise Institute, the authors take issue with the conclusion reached by fellow economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman who found the income-tax is far less progressive after the tax cuts in the 2017 tax reform bill.
Ganz and Brill cite the work done by economists Gerald Auten and David Splinter, and point out some assumptions made by Piketty, Saez and Zucman were not accurate because they left out important data. These economists continue to argue over:
- Whether a college student with a part-time job who is claimed as a dependent by her parents is counted as a separate, poor household, or if she is considered a part of her parents’ household?
- How unreported income is distributed and counted?
- How the value of health insurance and retirement savings and distributions are measured?
- What fraction of taxes paid by corporations is actually borne by workers rather than by capital owners?
- Should realized capital gains data or corporate retained earnings be used as a better way of distributing corporate profits among households?
The irony of all this is NONE of these extensive discussions would be needed if we replaced the Federal income-payroll-tax-system with The FAIRtax.
It would be simple. Instead of debating how many angels are on a pinhead, these “smart people” would be forced to find other areas to debate.
Again, almost any other subject would be more productive for mankind than a needless debate over the progressive nature of a corrupt and broken income-tax-code-system.
Conclusion
When I see actions by the “smart people” that baffle me, I remember what I call The Hearse Ruling.
In 1999 the National Highway Safety Administration (“NHSA”) ruled automakers had to put child-safety anchors on every passenger seat of every vehicle they built. The makers of funeral hearses were also required by this rule to install the safety anchors in their vehicles.
In 2000, one of the hearse makers petitioned the NHSA for an exemption. They pointed out the hearse is a single-purpose vehicle, transporting a body and casket, and children do not ride in the hearse’s only seat, the front seat.
It was not until October 15, 2004, 4 years later, the agency said, “All funeral coaches (now officially defined as “a vehicle that contains only 1 row of occupant seats, is designed exclusively for transporting a body and casket and that is equipped with features to secure a casket in place during the operation of the vehicle”) were permanently exempt from all child-safety provisions".
It took 4 years for the “smart people” at the NHSA to correct this rather silly rule for hearse makers. How long would it have taken you? See what I mean?
I wonder how much was paid to lobbyists to get them to contact the NHSA to have the rule changed?
Perhaps the “smart people” will still want to debate things which don’t interest most of us. However, if we enact The FAIRtax, we at least guarantee the “smart people” and The Swamp and the other members of The Ruling Class will have to find other ways to try and show how much smarter they are than the rest of us, and find other ways to profit from benefits they currently sell to the highest bidder.
If we are going to keep the present corrupt and incomprehensible income-payroll-tax-system, then tax professionals will still be needed to help people keep more of their income. However, that just points out the sheer idiocy, like requiring child-safety anchors in hearses, of keeping a tax system that everyone, except the people who make money off the system or use it to control us, knows is just a plain, stupid system.
It is 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
The FAIRtax Guys
Ron Maiellaro & Bob Paxton perform their FAIRtax Power Digital-TV Show & Podcast. When the show streams to Facebook, The FAIRtax Guys plus a few AFFT experts are responding “live” to your comments and questions. A free app is available for iOS and Android.
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Digital TV are available on The FAIRtax Guys
This week's Episode #182 - "The IRS & The Bill Of Rights"
Did you know IRS Publication#1 contains "The Taxpayer Bill Of Rights"? Yes, the IRS wants to assure you you have certain rights when it comes to dealing with the income-tax and the IRS.
For example, "The Right to Be Informed" is the 1st item. “Taxpayers… are entitled to clear explanations of the laws and IRS procedures, notices, and correspondence".
Of course this assumes the people at the IRS have a firm grasp of the laws & IRS procedures, notices, and correspondence, which is impossible since it’s over 76,000 pages!
The document goes on with a total of 10 items.
The FAIRtax Guys discuss each item and then ask the question, Why do we need a "Taxpayer Bill of Rights" when we have the REAL Bill Of Rights in our Constitution?
We DEMAND a tax system simple enough so we don’t need a "Taxpayer Bill of Rights" or any of the other 1,200 IRS publications.
The FAIRtax is the answer!
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!
Steve Hayes
Chairman, Americans For Fair Taxation