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The Chairman's Report November 20, 2020

HOW TAXES AFFECT YOUR LIFE

Governments like ours may print money, but they don’t otherwise create wealth.  The wealth of a people is created by the production of goods and services.  Governments rely primarily on the taxes its citizens pay to fund their operations.

Throughout history, governments have survived as long as the governed believed that the governments were doing their jobs at an acceptable cost.  When the governed decided that the cost of government was too high or that the government was not providing the basic services they demanded, then that government failed.

Today, governments seem to have forgotten that every dollar a family pays in taxes is a dollar, like in the picture above, that cannot be used to pay other expenses or bills.

The following examples shed some light on the total income earned in the U.S. and the total taxes collected at all levels of government.

According to a report on statista.com, personal income was $17.83 trillion in 2018.

The Tax Policy Center looked at the breakdown of revenues collected by federal, state and local governments as stated in the US Bureau of Economic Analysis, 2020, National Income and Product Accounts.   They found:
 
  • Federal government current receipts were just under $3.5 trillion in 2018.
  • State government current receipts were just under $1.8 trillion in 2018.
  • While the 38% did not affect every taxpayer the same because it is generally based on varying things like income levels and property values, that’s still a significant amount of money that governments took out of the hands of the people who earned it.

Obviously, not all of the money that governments took from the people was returned to them in the form of services.  After all, governments have to pay salaries and benefits to their employees and cover overhead expenses.  Still, a lot of that money was just wasted.

Senator Rand Paul publishes the Waste Report.  Among the items he pointed out in his 2019 edition were:
 
  • Our government spent $2 million “to increase trust between Tunisian political parties and citizens
  • $2 billion was spent to convert an abandoned mental hospital (St. Elizabeth’s Hospital, an historic landmark) into a Department of Homeland Security headquarters 
  • There was a $10 million “Green Growth” initiative in Peru, $100,000 for the Pakistani film industry, and $46,991 to study frog mating calls in Panama.
  • More than $5.3 million of taxpayer money funded false claims for Superstorm Sandy in New York City, and $48 billion went toward fraudulent Medicare payments.

This was just the federal government.   Have we also not seen examples of enormous waste due to ineptitude or greed by state and local governments?

As Jade Walle pointed out in his excellent article highlighted last week about the advantages of implementing a FAIRtax in Texas, not only would there be substantial overhead savings by eliminating the property tax system, but it would also be much more apparent to all Texas taxpayers how much they were paying to the local and state governments.

CONCLUSION

Governments have found that sending families just one tax bill is not a good idea.  When people get a clear picture of just how much of their money governments are taking from them, they tend to get upset and question if they’re getting their money’s worth.

Consequently, almost no one really knows how much total tax they pay.  For example, a company providing goods or services has to price its products in such a way as to cover all of its costs and generate a reasonable profit.  Of course those costs include the property tax, the gasoline tax, sales taxes, state and federal income taxes, state and federal payroll taxes.  In the end, consumers have no idea how much these taxes are driving up the prices of the goods and services they buy.

A proposed Illinois constitutional amendment to allow the state to convert from a state flat tax to a progressive income tax was defeated soundly by Illinois voters.  Illinois governor J.B. Pritzker said,

One big reason the tax amendment failed is that people don’t trust the government. They’ve seen too many examples of corruption and mismanagement. They’ve encountered too many government employees who just don’t care.

Governor, the reason the proposed amendment failed is that people don’t trust government.  And that’s with good reason.  Four of Illinois’ last seven governors have spent time in prison.

Isn’t it time that governments at all levels recognize that they are in the service business?  The purpose of government is supposed to be to provide services to the citizens for which the citizens pay.

Why is government the only service we purchase where its true cost is hidden from us?  The answer is obvious.  Politicians know that if the people knew the full cost of government, many would find that they’re not getting their money’s worth and would demand change.  Politicians also believe that a less expensive government would not be good for them—and they are concerned primarily with what is good for them and not what is good for us.

When the FAIRtax is adopted at the federal level, the people can decide if the benefits they receive are worth the taxes they are paying.  If the FAIRtax is adopted by the states, then the costs of government become even more transparent.

As Winston Churchill said, Truth is incontrovertible. Panic may resent it. Ignorance may deride it. Malice may distort it. But there it is.

IT IS TIME FOR GOVERNMENTS TO TELL US THE TRUTH ABOUT HOW MUCH THEIR SERVICES ARE REALLY COSTING US!

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.

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.”

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?”

 
Thank you for staying FAIRtax strong!
 
Yours In Liberty!   Yours In Freedom!

Steve Hayes
Chairman, Americans For Fair Taxation


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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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