The Chairman’s Report - July 15th, 2016

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  • Source: FAIRtax
  • 04/09/2021
Tax Reform and the Liar’s Paradox

In the Imitation Game, Benedict Cumberbatch played Alan Turing.  Turing was the mathematics genius who is credited by many as being the father of the modern computer.  The movie showed how the machine developed by Turing was successful in breaking the German Enigma code—a development that is credited with helping save Britain and win World War II.
Turing said that he was able to make many of his discoveries because he kept in mind the Liar’s Paradox, a concept known since ancient times.  (According to, paradox means a statement or proposition that seems self-contradictory or absurd but in reality expresses a possible truth.)
Simply put, on a sheet of paper an essay is written and the first sentence says, “The first sentence in this essay is a lie.”  We all know that a lie is untrue.  The paradox here is that if the first sentence is a lie, it is untrue.  However, if it is untrue then the sentence is not a lie.  Therefore, in looking for a solution to a problem, keep in mind that what seems true may not be and what seems false may be true.
We should keep in mind the principle of the Liar’s Paradox when we look at tax reform.  Is it true reform or not?
Tax Reform Proposals in A Better Way
Almost everyone agrees that the present income tax system is broken and needs to be fixed.  To their credit, Speaker Ryan and Ways and Means Chairman Brady have released their list of the changes that must be included in any tax reform.  While in theory many of these changes would be great, it is, sadly, only a theory.  It is like the Liar’s Paradox applied to tax reform. 
If you keep the present income tax/payroll tax system in place, as the Ryan/Brady plan does, then there is no such thing as real tax reform.  It is the same as saying, “The proposed tax reform is a lie.” It has proven to be a lie that any reforms of the income tax/payroll tax system are at best only temporary.  It is like digging a hole on the beach and watching the incoming water fill in the hole that you just dug.
Tax Reform Act of 1986
We only need to go back to 1986 to read similar glowing reports of how tax reform will fix our broken tax system and bring prosperity. President Ronald Reagan said, "Fair and simpler for most Americans, this is a tax code designed to take us into a future of technological invention and economic achievement, one that will keep America competitive and growing into the 21st century."
Simplicity can be related to the number of pages comprising the Internal Revenue Code, regulations and rulings. In 1984, two years before the 1986 reform, the total was 26,300 pages.  In 2014, less than 20 years after “simplification”, the number of pages is 74,608.  The Tax Foundation estimates that more than 10,000 changes have been made since 1986.
Congress and the Scorpion
There is the story of the scorpion coming up to the turtle on a riverbank.  The scorpion asks the turtle to let it ride on the turtle’s shell.  The turtle asks the scorpion to assure him that the scorpion will not sting him. The scorpion replies that it is easy because if the scorpion stung the turtle while crossing the river, both would die.  The turtle agrees and halfway across the river, the scorpion stings the turtle.  With its last words the turtle asks why?  The scorpion replies that it's his nature.
When asked about the changes to the U.S. tax code since 1986, it really is predictable.  It is in the nature of Congress and the D.C. elites to change things—usually not for the best.  It is in their nature.
This is why we compare the Liar’s Paradox to any tax reform based on the present income tax/payroll tax system.  At first glance it seems to be true but when we analyze it we see that it is not true.  The only way to really accomplish, for more than a year, the real reform of our tax collecting method is to adapt the FAIRtax. 
We all know the benefits of the FAIRtax:
  • No filing of tax returns by individuals
  • No IRS
  • No more slowed economic growth because of the terrible income/payroll tax system
  • No pre-taxing of consumption but at the point of consumption
  • No need for “deductions” that only allow you to get back some of the taxes already paid
  • A border adjustable system
  • No more punishing U.S. exports and subsidizing imports and costing U.S. jobs
  • No more tax lobbyists
  • No more corporate inversions
  • No more rampant evasion 
  • Instead of backroom deals, any changes to the FAIRtax will be visible to all.  In addition, the cost of government will be seen by every American because we are all consumers.

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Recently Bob and Ron decided to start from scratch discussing the many problems with the current income tax system and the reason why REAL tax reform is so desperately needed in our country.  In episode 3, Thomas Jefferson paid them a visit and gave his opinion of our federal income tax.  As you might guess, he wasn’t very happy with what he saw.  Then we searched for “the perfect tax system”.  
In future episodes, you will hear from Bob “Paxworthy” famous for his “You Might Be A FAIRtax Fan!” routine.  The FAIRtax Guys are always open to your thoughts and opinions.  You can contact them at  
Episodes are still available on SoundCloud and YouTube but Spreaker is the site that lets up branch out to other, more popular sites that cater to podcasting.
The FAIRtax Guys will continue with FAIRtax Power Radio until HR 25 becomes the law of the land in 2017.  After that, I’m sure the episodes will go into the Radio Hall of Fame!  Please share this information with your constituents and anyone else you care to.  The more people we educate about the FAIRtax, the better the chances are that it will become a reality next year. 
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FTPR Program 30 on YouTube
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