The Chairman’s Report October 8, 2021

  • by:
  • Source: FAIRtax
  • 10/08/2021

SENATOR SANDERS, THE FAIRTAX WILL FUND YOUR SPENDING PLANS

There are many ideas in Washington, D.C. that their supporters believe will be beneficial to America and the American people.  Whether these ideas are Democrat or Republican, liberal or conservative, they all have one thing in common—they need funding.

Most of us who want to make a major purchase have a limited number of options.   For example, if we want to add a pool to our home, the first thing we do is get estimates of the cost.  If the lowest estimate is $50,000 and we’re willing to pay that, the next step is to figure out where to get the money.

If we have $50,000 in the bank, we can use that money.  For most of us, though, we will have to borrow the money we need.  Maybe we have enough equity in our home that we can borrow what we need either by refinancing our mortgage or by obtaining a home equity loan.

Another option is to borrow the money from a bank or from an individual.  Once we get the money, we can have the pool built.  Then we repay the loan each month as we enjoy the pool.

Of course, before we can obtain a loan from any source, we have to prove to the lender that we can pay it back.  If our income is too low, if we’re carrying too much debt already or if we have a history of not making payments on time, it’s going to be really hard to find someone who is willing to loan us the $50,000.

So, even though the pool would be a great thing to have, our ability to pay for it will be determined by our income and our credit score.  These are the basic rules of economics that apply to all of us.

Our state and local governments are in much the same situation.  Their ability to borrow is limited by their credit rating and their ability to repay the loan.  These government entities need sufficient income sources to pay back any loans they make, or they cannot obtain loans.

The federal government, though, is different.  While the federal government does have a credit rating based on its borrowing history and projected revenue, the basic rules of economics don’t apply to the federal government because of three primary factors:
 
  • Unlike individuals, private businesses and other governments, the federal government can just print whatever money it needs.  If we need to make more money, we have to find a way to earn it or get a raise.  The federal government can just push a button and create whatever it needs.
  • As shaky as our debt-ridden economy may seem to some of us, compared to other economies around the world, the U.S. is still considered the most secure economy in the world.
  • Despite the rapidly increasing deficits, inflation is just now starting to pick up.  For decades, though, it has defied traditional economic rules and has remained very low meaning that all the additional money that the government has been printing hasn’t  materially reduced the value of the other money in circulation.  As long as inflation stayed low, the federal government could continue to print money with no apparent consequence and people accepted the new money with no reservations.
SOURCES OF FUNDING

Senator Bernie Sanders is advocating spending $6 trillion for programs that he believes are necessary to fulfill his dreams for America.  While many Americans may not agree with all of his proposals, there are many other Americans who enthusiastically endorse his ideas.

Because of resistance from within his own party, Senator Sanders has seen his spending proposals reduced from $6 trillion to $3.5 trillion and the amount will likely be reduced even more.

Regardless of how much the final authorized amount ends up being, it will be far more than the federal government is currently collecting.  Therefore, it will have to be funded in one of three ways.
 
  • By increasing the amount of federal taxes being collected;
  • By printing more money thereby increasing the deficit and the total debt;
  • A combination of tax increases and printing more money.
There’s a lot of talk in Congress about raising taxes on “the wealthy” and leaving the middle class alone.  The reality, though, is that higher taxes on the wealthy and big corporations inevitably impact the rest of us.  While these measures will be sold to the masses as affecting only the wealthy, history indicates that they will contain language allowing “the wealthy” to escape most of the new taxation and that the actual revenue collected will be far less than projected.  That’s always been the case in the past, and there’s no reason to believe it will be any different this time around.

The reason for this is clear.  The bureaucrats doing the revenue projections never seem to understand that people will adapt their behavior to any new tax law.  They believe that if they double the tax rate, they’ll get twice as much revenue.  They cling to that belief in spite of the fact that it never has worked out that way and it never will.

This means that most of the new spending will have to be paid for with more printed money—increasing the deficit and increasing the likelihood that the “temporary” inflation we are experiencing now will become permanent.

This increase in federal taxes will:
 
  • Have the greatest impact on average Americans, not “the wealthy”.  Wealthy taxpayers who can afford the best professional tax help available have always found ways to minimize their own taxes and pass much of the burden on to the rest of us.
  • Provide even more incentive for people to evade their federal taxes.  Some will be motivated by economic reasons but most who evade federal taxes and the people who participate with them are protesting against the actions of the Ruling Class;
  • This increased evasion will further reduce the amount of tax money collected and require the government to print even more money;
  • As inflation rises, the people Senator Sanders says he wants to help will be harmed the most.
SOLUTION—ENACT THE FAIRTAX

Senator Sanders, if you will join us in our effort to replace the income/payroll tax system with the FAIRtax, you will immediately see the following happen:
 
  • All of the countless hours of debate over how to change the complex and corrupt income tax code will be eliminated;
  • This time can be devoted to “selling” the benefits of your spending proposals to the American people;
  • It will be simple to show how much of your spending plan will be paid for by the FAIRtax because if more money is needed, then the FAIRtax rate can be increased;
  • If the people agree that your programs are needed, they will not object to the higher FAIRtax rate;
  • If enough of your colleagues agree, the effect of the higher rate can be lessened on lower earning Americans by increasing the Prebate.  Raise the amount that families can spend tax free, and you will lessen the impact the FAIRtax has on lower income Americans;
  • The amount of tax evasion will go down dramatically without having to trample the privacy rights of Americans and require the IRS to become even more “weaponized” and oppressive to Americans;
  • The reduction in evasion will mean that D.C. will have at least another $1 trillion of funds that can be allocated to your programs;
  • The ordinary Americans that you believe you are speaking for would be rewarded with more and better paying jobs that are now being forced overseas by the income/payroll tax;
  • The economy will grow much more rapidly and more revenues will flow into D.C. to fund the spending programs that you propose;
  • Instead of a Social Security/Medicare system nearing insolvency, both programs will have stable funding for the future;
  • Less borrowing will reduce the harm from inflation suffered by the people for whom you are speaking;
  • You will be a hero to all Americans because you helped free them from the unfair and despised income/payroll tax system and helped create a great era of prosperity for all—not just the wealthy.
CONCLUSION

E.F. Schumacher, a British statistician and economist said, Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius—and a lot of courage—to move in the opposite direction.

Senator Sanders, you can demonstrate how much you want to help all ordinary Americans by endorsing and actively promoting the FAIRtax! You can show that you have the genius and courage to adopt a real solution to many of America’s problems.

We are the people that you want to help. We will demand that our representatives either join with you to eliminate the income/payroll tax system or be thrown out of office at the next election.

SENATOR SANDERS, WILL YOU JOIN US TO PASS THE FAIRTAX AND REALLY SAVE AMERICA?

What can each of us do?

We can write letters and make calls to our elected representatives demanding that if the government really wants to eliminate the burden of filing income tax returns, they should enact the FAIRtax and do away with tax returns altogether.

The great 18th century Irish statesman Edmund Burke made a statement that applies in many ways,

“Nobody made a greater mistake than he who did nothing because he could do only a little.”

If you want to prevent the IRS from being further weaponized to punish those of us who may object to the D.C. opinions and dictates of what is good for us, then help us PASS THE FAIRTAX!

The IRS will be gone and we will pay our taxes when we make purchases.  WE and not D.C. Elites will decide how much federal tax we pay!

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?”

HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES


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Bernie Sanders by Gage Skidmore is licensed under Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)

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