The Chairman’s Report April 21, 2023

  • by:
  • Source: FAIRtax
  • 04/20/2023

The D.C. Magicians

An April 14, 2023 article in the Wall Street Journal by Laura Sanders demonstrates how effective the D.C. magicians have been in disguising the amount of income/payroll taxes Americans pay.

In the article, she makes the following points:
  • According to the Joint Committee on Taxation, the sources of federal revenue are as follows:
    • 54.2% individual income tax
    • 30.3% social insurance taxes (Social Security and Medicare payroll taxes)
    • 1.8% excise taxes
    • 8.2% corporate income taxes
    • 0.6% estate and gift taxes
    • 4.9% other revenue
The article goes on to analyze how the tax burden falls across different groups of taxpayers.
  • 43% of taxpayers earn $50,000 or less of income.  This group will earn about 10% of total income and pay 3.5% of total taxes.
  • Nearly 80% of projected income taxes for 2022 will be paid by about 10% of filers earning $200,000 or more, and those earning $1 million or more will pay half of that.
  • Over 70% of long-term gains are expected to be reported by people earning $1 million or more.
  • The number of filers with $1 million or more of income is expected to be 917,000 for 2022, compared with 597,000 in 2018, a 54% increase. 

For decades, the DC magicians have been making the following incorrect assertions about the income/payroll tax system:
  • Corporate income taxes have no impact on individual taxpayers
  • Higher corporate taxes do not result in higher prices for goods and services.
  • Making sure that higher earners pay a much higher percentage of the total tax burden is more important than the amount of spendable income Americans are left with after taxes.

Here are the actual facts:
  • Corporations are owned by shareholders.  Any taxes paid by corporations reduces the amount of money the corporation has to distribute to its shareholders.
  • Income/payroll taxes are costs of doing business, just like labor, rent, utilities, materials, etc.
  • Every business must generate enough income to cover all of its costs and make a sufficient profit to stay in business.
  • While it is impossible to calculate exact amounts, most economists agree that the costs imposed on businesses by the income/payroll tax system increase retail prices by at least 10%.
  • Lower earners spend almost all of their income on retail goods and services.
  • Consequently, the income/payroll tax reduces the spendable income of lower earners by at least 10%.
  • The actual “taxes” paid by people making $50,000 or less are not 3.5% but 13.5%


The people in D.C. have demonstrated that the “Big Lie”, the title given to the reporting of Hitler’s propagandist, Joseph Goebbels, works even in our time.

D.C. is like the magician that distracts our attention with a flourish while he puts the rabbit into the hat that he will later pull out to our astonishment.

We are all told that the only income/payroll tax we pay is what we see on our W2.  We are constantly told that the wealthy don’t pay their “fair share.”

People point out that D.C. wants to keep the income/payroll tax system because they use it to extort money from special interests by threatening to change the tax laws.  While that’s true, there will still be plenty of other ways to get money from special interests when the income tax is replaced by the FAIRtax.

Others point out that D.C. wants to keep the income payroll/tax system because of the control it gives them over people’s lives.  They can influence our decisions by offering tax breaks for desired behavior like buying an electric car.  They can also punish people who disagree with them with tax penalties.

One of the big reasons that the DC elites fear the FAIRtax is that the FAIRtax would show everyone the true cost of government on every receipt.  With the costs of the income/payroll tax system embedded in the prices of everything we buy, a significant portion of our total tax burden is hidden from us.  

The DC elites fear that when Americans clearly see how much their government is costing them, they will rise up in outrage.

If the family making $50,000 per year realizes that the income/payroll tax system is really taking an additional $400/month out of their budget, they will realize they have been conned and take their vengeance on D.C. in the next election.

The elites know that if the American people ever saw the full cost of government, they would demand massive changes in the D.C. establishment and enforce these demands at the polls.

Isn’t it time to end this ludicrous tax collection system and the IRS?

When the FAIRtax is enacted, there will be no need to fear being audited by the IRS because there will be no more IRS.  

Under the FAIRtax, there will be no more tax returns.  We will pay our taxes when we make retail purchases of new goods and services.
There is going to be a vote on the FAIRtax in the House of Representatives.  McCarthy and the other elites didn’t want it, but it was forced on them.

We now have the opportunity to force all Members of the House to show where they stand.  They can:
  • Vote for the present income/payroll tax system or for the FAIRtax.
  • Support the corrupt income tax and the IRS or eliminate it.  It can’t be any simpler than that.
  • Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
  • Support the largest transfer of power from government to the people, the FAIRtax, or not.
If Members think that the FAIRtax needs to be changed, then they can propose the change.  Don’t let them reject the entire bill because it has a “flaw” that can be easily addressed.  

Please stand with us and demand that your representative support a much fairer, much simpler and much more efficient way to fund the government—the FAIRtax!

The FAIRtax doesn’t pick winners and losers.  Because it taxes spending, not earnings, the FAIRtax lets everyone save for their retirement tax free.  

The FAIRtax collects the revenue that the federal government needs to operate but does it in a way that has the least impact on our individual freedom and the least impact on our economic prosperity.  

There are no tax returns to file and no records to keep.  We pay our federal taxes when we make retail purchases of new goods and services, and there is no need for the IRS.  If you sell a used couch or used jet ski online, there is no FAIRtax due on that transaction.

The FAIRtax will allow us to TAKE BACK CONTROL.

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

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