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Chairman's Report - September 29th, 2017

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Chairman's Report - September 29th, 2017
TAX REFORM THAT PROTECTS THE SWAMP

The tax reform proposal that is supposed to make all of us believe that the Swamp inhabitants have actually tried to do something for us is now public.  To be fair, many of the proposals will improve the present income tax code--if they are passed and remain in place for longer than this term of Congress.

Here is a summary of the main points released today:
  • Reduces the number of individual tax brackets from seven to three with rates of 12 percent, 25 percent and 35 percent, with the proviso that a higher rate can be added for wealthy taxpayers but does not define "wealthy".
  • Increases the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples but eliminates the deductions for personal exemptions.
  • Increases the amount of the child tax credit.
  • Eliminates all itemized donations except for mortgage interest and charitable contributions.
  • Repeals the estate tax and the alternative minimum tax.
  • Lowers the corporate tax rate from 35 percent to 20 percent.
  • Lowers the top rate on income for so-called “pass-through” businesses to 25 percent.
  • Allows businesses to immediately write off 100% of the costs of their capital investments for at least five years.
  • Limits a business’ ability to deduct interest expenses.
  • Delegates to the tax-writing committees the duty to decide which business tax breaks to eliminate, but calls for the preservation of the research and development tax credit and the low-income housing tax credit.
  • Signals a move to a “territorial” system that doesn’t tax dividends from U.S. companies’ foreign subsidiaries.
  • Requires a minimum tax on foreign profits at a reduced rate to ensure that companies that use tax havens pay at least a certain level of taxes on a global basis.
  • Includes a one-time tax on the foreign earnings that U.S. companies currently have held overseas. There would be two repatriation rates: one for cash and cash equivalents and a lower rate for other types of assets. The numbers for the rates aren’t specified.

This Proposal Is Not Real Tax Reform

The Merriam-Webster Dictionary defines "reform" as, "removal or correction of errors or of an abuse or a wrong."  While the "reform" proposed by the Swamp does, if enacted, provide some "removal or correction of errors", it is not really reform.

You can liken the efforts of the proponents of this proposal to the dentist who sees a patient that has a badly infected tooth. Instead of treating the decay in the tooth, the dentist gives the patient a shot of Novocain and a script to get more so that the patient can keep the area numb.  

Because the actual cause was not repaired, the tooth just gets worse and the patient will either lose it or the infection could spread into the body and have even worse consequences.

Here are the reasons the tax proposal is not real reform and primarily helps the inhabitants of the Swamp.

 
Reason Winner
Eliminates deductions for most special interests and ensures that huge amounts of money will be spent to change the bill Swamp
Maintains the present income/payroll tax system Swamp
Keeps the IRS in place Swamp
Keeps the corporate tax and its complexity Swamp
Requires complicated business tax returns Swamp
Can be changed behind the scenes if the money is right Swamp
Ignores the growing evasion of at least $9 trillion over the next decade Cheats


The real problem is that Congress and the inhabitants of the Swamp do not want to really fix the decay that is the present income/payroll tax system.  They would rather give us Novocain and tell us that what we are eating is not spam but filet mignon.  They really think we are that dumb.

Conclusion

When confronted with a proposal that did not accomplish his goal, Abraham Lincoln asked the man proposing the proposal,   How many legs does a dog have if you call his tail a leg?"  The man answered, "Five."  Lincoln shook his head and said, "Saying that a tail is a leg doesn't make it a leg."

The inhabitants of the Swamp trying to tell us that their tax proposal is anything other than calling a tail a leg might have worked a few years ago.  Now more and more people are no longer listening to words but looking for actual results.  

The only true tax reform is the FAIRtax because only it accomplishes all of the tax reform goals promised by the Swamp inhabitants.  We have to send a strong wake-up call to the inhabitants of the Swamp that we are on to their games and if they don't change, we will elect people who really care for us--not just for themselves and their friends.

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.

HOW DOES THE PRESIDENT’S TAX PLAN STACK UP?
FAIRTAX POWER RADIO EPISODE #76

First The FAIRtax Guys respond to “a short note” from Jade Walle, author of two featured articles on FAIRtax Friday.   Previous to those articles being published, Mr. Walle sent The FAIRtax Guys an email with his perspective, as a CPA, on the income tax vs. the FAIRtax.  Also, President Trump published his tax plan a few weeks ago and the FAIRtax Guys analyze it and compare it to the FAIRtax. Listen and learn why the FAIRtax is superior to the President’s tax plan and what YOU can do to promote the FAIRtax with the President and in Congress. 

In last week’s episode, we discussed “How You Can Become a Lobbyist?” Yes, “We The People” can lobby Congress too!  The FAIRtax Guys gave you the information necessary for you to become a Class A FAIRtax Lobbyist. Use this information to lobby your Congressman or Woman and Senators to become cosponsors of the FAIRtax, the only REAL tax reform legislation in Congress at this time. 

ARE SPREADING THE WORD ABOUT FAIRTAX POWER RADIO?  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/27oJYlV), 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.  

As stated earlier, 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!


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