The Chairman’s Report July 15, 2022

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  • Source: FAIRtax
  • 07/15/2022

Congress Give Their Staff Double-Digit Raises
 

Every for-profit business must deliver products or services that people are willing to pay for, or they will cease to exist.  Similarly, every non-profit organization must show itself worthy of the contributions they seek, or they too will disappear.

The local bakery must sell enough baked goods to cover all its costs, including employee pay, and make enough of a profit to support the owner.  If the bakery employees want to earn more money, the only way that they can get a raise is if the bakery owners generate enough money to pay for the extra expense.  If the employees want more benefits, like a good medical plan, the bakery must have enough income to pay for the new benefits.

If the employees can find a better-paying job or a job with the benefits they seek, they will leave the bakery.  This is what is happening in our present economy.  People are moving, for the most part, to jobs that pay more and offer better benefits.

Non-profits who rely not on government grants but on donations from the public are in a similar situation as the for-profit bakery.   Non-profits are funded by donations.

For example, the non-profit food bank in your city has a purpose that all of us support.  In order to attract donations, the food bank must persuade donors that they are using the donated money in the best way to deliver their service to the needy. 

If the food bank wants to increase employee pay or offer other benefits like the medical plan, they must attract the additional donations it will take to cover the added expense.

Local and state governments are similarly constrained.  They can’t just print money.  They must operate with the money they receive from their citizens.  If they don’t, then they, like Detroit and the rest of us who cannot pay our obligations, are forced to declare bankruptcy.

The Rules For The Federal Government

Most Members of Congress have decided that the financial rules that apply to everyone else don’t apply to them.  In their world, if they decide to spend money because it is good for the rest of us, then they are not limited by the amount of tax dollars collected from us.  

If they want to spend more money than they receive, then the Federal Reserve just prints more money and this borrowed money pays for the additional spending.

Everyone knows this but why is it relevant?

An article in Townhall.com points out:
 
  • Included in the $1.5 trillion 2,700+ page omnibus bill is a $774 million increase in the Members Representational Allowance (MRA) which funds the House office budgets.
  • This is a 21% increase over last year.
  • There is also $18.2 million allocated for paid internships.
The House Committee on Ethics explains how the MRA can be used by Members:
 
  • The MRA may be used only for official expenses;
  • The MRA may not be converted to personal or campaign use or applied toward any unofficial activity;
  • As a general matter, only the MRA and Members’ personal funds may be used to defray official expenses;
  • House Rule 24, which sets forth the prohibition on unofficial office accounts, bars the use of private funds or in-kind support from outside sources for official activities;     
  • In addition to possibly violating House rules, the misuse of the MRA may also subject a Member or employee to criminal prosecution and actions to recover the misspent funds; 
On May 6, 2022, Speaker Pelosi, pictured above, sent a Dear Colleague Letter to all Members stating how the MRA increase was to be used. In this letter, Speaker Pelosi stated:
 
  • Pursuant to the statutory authority of the Speaker in 2 U.S.C. 4532, the House will for the first time ever set the minimum annual pay for staff at $45,000.  The deadline to implement this new Pay Order is September 1, 2022,
  • The maximum staffer pay is increased from $199,300 to $203,700.
  • The House will vote next week on a resolution to enable staffers to join a union.
The U.S. Senate received a similar large increase in their office accounts.

Nancy Pelosi and many other Members of Congress are surprised that anyone could question their decision to provide raises to their staff.

How could anyone object to helping people get a raise?  After all, these are the people who are helping the Members do such a good job of running the country.  

How could anyone complain about the quality of their work when:
 
  • Inflation is over 8%
  • Mortgage rates are now over 5.5% adding hundreds of dollars to the average mortgage payment amount
  • The national debt is nearing $31 trillion
  • The Bureau of Labor Statistics indicated that productivity is falling at an annual rate of 7.5 percent.
  • Gas prices are an average of $4.80 per gallon and in some states close to $6.00/gallon.

What Has This To Do With The FAIRtax?

The FAIRtax will not stop inflation or the federal government continuing to borrow more and more money.  But the FAIRtax will at least enlighten Members of Congress and their respective staff’s about the true costs of federal government spending.

Not even Members of Congress and their soon to be rewarded staffs have any idea about the actual amounts their family income is reduced by the income/payroll tax system.

Like all of us, they see that payroll taxes and income taxes are deducted from their checks.  But like us, they don’t see how much more they are paying for the goods and services they purchase because of the embedded costs of the income/payroll tax system being passed on to them.

 The FAIRtax will make the federal government more accountable to all of us because:
 
  • Every person in America will clearly see the costs of the federal government on every retail purchase of a new product or retail service.
  • Every person in America can calculate the amount of the FAIRtax allocable to every program in the federal budget.
  • Every wage earner will receive all of their pay.
  • Every company owner that provides new retail goods or retail services will file a simple sales tax return and they will be compensated for collecting taxes for the federal government.
  • Every company owner that is not in the retail business will not have to file any kind of tax return at all.
  • No one will ever again have to spend time, effort and money filling out complicated federal tax returns or trying to interpret the incomprehensible federal Income Tax Code.
  • Members of Congress can no longer make millions of dollars from lobbyists seeking to buy favorable tax treatment for their clients.
  • The rules upon which both individual and corporate financial and retirement planning were based will no longer be constantly changing.

Conclusion

The young man wagging his finger in the picture is actually my seven-year-old grandson.  Like everyone else’s grandson, he is very smart besides being very cute.

There are two reasons why this picture is important.  The first is that our grandchildren have no problem understanding that any system that prevents Americans from being as prosperous as they could be is just wrong.  

Does he understand all of the economic arguments?   No, but he really doesn’t need to understand them.  All he needs to understand is that enacting the FAIRtax and eliminating the income/payroll tax system will improve the lives of his family and all of his friends by simply changing the ludicrous way the federal government taxes its citizens—that is easy for him and for anyone else who doesn’t have a vested interest in the present system to understand.

No one can really argue that enacting the FAIRtax will do more to stimulate U.S. economic growth than any number of “reforms” to the present income/payroll tax system could possibly do.

Under the FAIRtax, U.S. companies:
 
  • Will have large financial incentives to purchase U.S.-sourced raw materials.
  • Will have large financial incentives to purchase equipment made in the U.S. 
  • Will have large financial incentives to do their research and development with U.S. companies and institutions.
  • Will be much more competitive both in the U.S. and abroad.
Of course, enacting the FAIRtax will also:
 
  • Eliminate all tax returns, both personal and corporate
  • Eliminate Federal withholding from our paychecks.
  • Eliminate government bureaucrats’ ability to dictate how much tax we owe and put us back in control of when we pay our taxes and how much we pay.
  • Eliminate public leaks of our private and personal information by bureaucrats.
  • Eliminate the billions of dollars now paid to tax lobbyists.
  • Eliminate the billions of dollars paid to the income/payroll tax industry.  This is an industry that creates no products but only helps those who can afford it to navigate the insanely complex and totally unnecessary income/payroll tax system.
  • Eliminate Congress’ ability to hide social programs, like the earned income tax credit or child tax credits, in the income tax code and force them to pass legislation separately.
  • Eliminate the Ruling Elite’s ability to directly control us by threatening us with adverse tax code changes if we dare oppose them.
If we eliminate greed and personal advantage by Members of Congress, then the only reason that they oppose enacting the FAIRtax is that they are not capable of grasping concepts that are simple enough for children to understand.  

This we know is not the case.

THE SECOND REASON IS ACTUALLY MORE IMPORTANT.  This is a reminder of the real reason why all of us are still working to replace the income/payroll tax.  It is for all of our children and grandchildren and their children.  We want them to have the opportunity to live in a prosperous country where they are limited only by their own ability.
  
That is why we must continue—not just for us even though it will help us, but for the future generations.


​​​​​The income/payroll tax system is broken and no longer working—we can’t repair it but we can replace it with the FAIRTAX!

ALL AMERICANS MUST JOIN US BEFORE IT IS TOO LATE AND THE WONDERFUL COUNTRY WE LOVE IS FURTHER HARMED.

Join us and TAKE BACK CONTROL OF OUR COUNTRY—NOT WITH BULLETS BUT WITH THE ELIMINATION OF ONE OF THE BIGGEST THREATS TO OUR LIBERTY AND ECONOMIC PROSPERITY—THE INCOME/PAYROLL TAX.

We all should remember Edmund Burke’s warning that applies to our efforts to TAKE BACK CONTROL,
 
“Nobody made a greater mistake than he who did nothing because he could do only a little.”

We should also remember this quote from George Orwell's 1984, which, if we do nothing, may foretell your and your 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?

 

We can write letters and make calls to our elected representatives and attend Zoom town hall meetings demanding that if they really want to allow Americans to “TAKE BACK CONTROL”, the first step is to eliminate the income/payroll tax system and enact the FAIRTAX!

TAKE BACK CONTROL!   Help us PASS THE FAIRTAX!

The IRS will be gone and we will pay our taxes when we make purchases.  

WE and not the Ruling Class and their minions in D.C. will decide how much federal tax we pay!

WE will know how much tax we and everyone else are really paying because taxes will no longer be hidden from us.  It will be clearly shown on every retail receipt.


If you have friends who don’t know about the FAIRtax, send them to FAIRtax.org.  Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.

Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax

Is it hopeless?  When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who 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?”

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Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!

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