Chairman's Report - October 20, 2017

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Chairman's Report - October 20, 2017


One account about Harry Truman shortly after being thrust into the presidency after the death of President Roosevelt has stayed with me for many years.

Soon after he became President, Truman was asked to support a bill.  He knew nothing about it.  He asked his advisors if he should support it.  His advisors started explaining that it was politically very beneficial for him to support it and why.  Truman pounded on the desk and said something like (and I have cleaned it up) I didn't ask you if it was politically good, I want to know if it is the right thing to do.

If you listen to the talking heads and read the headlines about this action or that action by Congress or by President Trump, there is one thing they have in common.  Almost all of them are giving an opinion not of the benefits to the people but the perceived "political benefits."  

This attitude is not confined to the pundits but seems to have infected almost all of the Members of Congress.  They are more concerned about the perceived "political" effects than they are the impact on the rest of us.  This blatant disregard for the rest of us reminds me of another statement by Truman:  “My choice early in life was either to be a piano player in a whorehouse or a politician. And to tell the truth, there’s hardly any difference.” 

Tax Cuts Not Tax Reform

This attitude of doing what is right politically explains why there is now a shift by politicians and pundits to tell the rest of us that tax cuts are really the best we can expect, and we should be very grateful to the ruling class that they are going to steal less of our money.

If you give a starving man a crumb to eat, he will be grateful.  However, what he really needs is to be able to eat enough not to starve and to keep what he is able to create on his own.  Giving us the crumb of tax cuts is not really solving the problem that we have--a broken income/payroll tax system that will continue to be lucrative for the Swamp and Members of Congress but not the rest of us.

If we had real tax reform, like the FAIRtax, the only ones who will not benefit are the politicians and members of the Swamp who profit from the current system.  Ultimately, politics is about power and the politicians and the members of the Swamp love to tell the special interests that if they don't come forward with money, they will not continue to have their favored treatment.

If the politicians and members of the Swamp just admitted to us that they were making sure they could continue to extort money, we could understand more easily--perhaps.  However, it is very insulting to be told that all of this is "for our benefit" when it is only for their benefit.  We don't expect politicians and members of the Swamp to be honest, but we do expect them to be more clever liars.

How Do Good People Go Wrong?

The answer is one step at a time.  Fyodor Dostoevsky, the great 19th century Russian author, saw many of the people around him start as people seeking to help and become people seeking to help only themselves.  He said, "The man who lies to himself and listens to his own lie comes to such a pass that he cannot distinguish the truth within him."

During my visits to D.C. representing the FAIRtax, it has been my privilege to meet many Members of Congress and other people who were gracious and friendly.  Often these people said that they were looking at a real solution to our broken tax system.  They listened politely to my explanations about the FAIRtax, asked intelligent questions and said that it made a lot of sense.

Then later, these same people and Members of Congress would appear on television discussing how some bandaid or another added to the present income/payroll tax system was all that was needed.  They would then vote along the lines of the leaders who could ensure they received favorable committee appointments. The first time they did it, they probably said to themselves that it was done to help them become more able to get good things done.  However, if a person agrees to compromise his or her own beliefs for the sake of "party unity" or appointment to this committee or that one, it becomes easier to compromise more and more until they have lost sight of what is best for the people--one step at a time.


Groucho Marx was not joking when he said, "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies."

This is particularly true about the desire to avoid replacing the failed income/payroll tax system.  Most of the Swamp and Congress say the existing system is not working.  They "diagnose" the cure as simply making minor changes.  There is no apparent concern for what is right for us but what is right for them.  

However, the rest of us are starting to see that it doesn't matter if the label is Democrat or Republican, what matters is whose interests are these Members of Congress and the Swamp serving.  If it is not our interest, then it is time for a change.

It is time for us to act like plain speaking Harry Truman who was often accused of giving opponents hell.  Truman said, "I never did give anybody hell.  I just told the truth and they thought it was hell."  

We just need to start telling the truth and people who are actually only looking out for themselves will believe we are giving them hell.  

Please call your Members and explain to their staff members that you want to really understand why the Member is not looking out for them but for himself or herself.  When the staff person denies it then say that the Member not being willing to enact the FAIRtax, real tax reform, says it all about who the Member really supports.

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.”


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.



In Part 2 of the interview with Jade Walle, he explains how the oldest profession in the world will finally be taxed under the FAIRtax. That’s because it’s very hard to escape a sales tax. Listen in and learn why evasion of a national sales tax will be very small even compared to a state sales tax. (Hint: it has to do with the state “use tax.”) Much more great information that you can use to convince others that the FAIRtax is the only REAL tax reform proposal in Congress.

In last week’s episode, Jade Walle, a CPA with a large accounting firm, dispelled that myth and explained why the FAIRtax will be a boon to the CPAs of America. Mr. Walle knows what he is talking about. As a CPA of 20 years, he has taken the time to thoroughly educate himself on the FAIRtax and has become an authority.  This is part one of the interview. Listen, Learn and Share it with others.

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