The Chairman’s Report August 15th, 2025

This week’s Chairman’s Report is written by Jade Walle.  A practicing CPA has been on the American For Fair Taxation board of directors. 

FAIRtax and the Retail Small Business or Sole Proprietor

America is amazing!  The entrepreneurial spirit of our U.S. brothers and sisters is unparalleled in the world. 

According to the U.S. Small Business Administration (“SBA”), there are 33.2 million small businesses in the country.  The SBA defines “small business” as having revenue of $1 million to $40 million with fewer than 500 employees.  These small businesses were responsible for the creation of nearly two-thirds of newly created jobs from 1995-2021, according to the U.S. Chamber of Commerce, and are responsible for almost half of our nation’s GDP. 

However, what about very small businesses, like my wife’s interior design sole proprietorship?  My wife is an incredible decorator and depending on what is going on with our children, college, family, etc., she occasionally works, but like many small businesses, her revenue is not anywhere close to this SBA $1 million threshold. 

Although it’s difficult to pinpoint exactly, some estimate that when every U.S. business is tallied, including those sometimes but not always passive endeavors that may only include one person, there are approximately 100 million U.S. businesses.  What an incredible achievement for a country with a total population of 342 million!

Of these 100 million businesses, only around 2 ½% are retail businesses, or 2.5 million, with about 15% of these 2.5 million companies representing 90%-95% of all U.S. retail sales (e.g., Wal-Mart, Amazon, etc.).  However, what about the small fry, those small businesses like my wife’s?  How would the FAIRtax affect those small businesses?

If the small business in question was one of the 97.5 million businesses that do not make retail sales, then there is nothing for these businesses to comply with under the FAIRtax.  They would only see reduced costs as the legacy income and payroll tax system’s embedded costs fall out of their supply chain.  They would make their wholesale purchases paying no FAIRtax and make their sales to other companies without collecting nor remitting any FAIRtax. 

So, for small retail companies like my wife’s interior design business where she assists people with their home décor, how would the FAIRtax affect them?  Virtually all U.S. states collect state sales taxes, and these retail businesses apply for a state sales tax permit or license in order to purchase goods wholesale without state sales taxes.  Then, when making their retail sales, they charge their customers the state sales tax and remit the collections to the state each month, quarter, or year. 

Under the FAIRtax, the process is exactly the same.  The small business charges their customers the FAIRtax for a retail sale, and continues to remit the collection to their individual state.  The states would then remit the FAIRtax collections to the U.S. Treasury.  There would be no new entities or federal bureaucracies for the small business to contend with from that time forward.

However, it is important to examine the current landscape of state sales tax collections.  Each state’s sales tax collections system is different, complex, and cumbersome, often differing county by county with differences in each jurisdiction.  Often, labor services like my wife’s interior design consultations, are not subject to state sales taxes, but sales of products are.  Is the business engaged in selling alcohol or tobacco? 

Get ready for a few pages of exceptions, credits, adjustments, and other exclusions to contend with on your periodic remittance to the state.  What about that special county that has a unique exception for certain qualified activities or sales?  Oh my, even our state sales tax collections get complex, difficult, and full of exceptions and one-off nuances. 

The FAIRtax does not affect individual state laws or state sales taxes, so these state sales tax calculation headaches for our best and brightest may still endure.  However, the FAIRtax would be an incredibly easy add-on for these patriots.  Here’s the simple calculation:  What were your retail sales?  (Let’s say $30,000 this month). Multiply by 23%, which is $6,900 (which was collected by you from your customers this month).  Subtract the administration credit of one quarter of one percent for your collection efforts ($6,900 X .0025), $17.25, and remit the balance to the state ($6,882.75).  It is that easy!  Note that if you’re a small business, the FAIRtax pays you for your time and effort in collecting the tax, what a novel concept!

This will cover the vast majority of our small U.S. companies’ remittances of the FAIRtax to their state of residence.  Of course, for extremely unusual circumstances there are other provisions to help out, but these will rarely be needed (e.g., bad debt credit, business use conversion credit, intermediate and export sales credit, or insurance proceeds credit). 

The small business FAIRtax remittance will be extremely straightforward and simple, as calculated above.  No county by county exceptions, no add-backs, no variance of rate depending on the city or county where the sale occurred, etc., just one simple calculation.

If you have a small business that makes retail consumer sales, the FAIRtax would be a bonanza for you and all of our incredible U.S. entrepreneurs!   What are we waiting for?

CONCLUSION

Jade clearly explains that the FAIRtax simplifies federal tax collection and is good for all of us.

The D.C. Elites and almost all politicians and their minions profit from the complexity of the income/payroll tax.  They will oppose this simplification unless we the people demand it.

Many of you have labored tirelessly for freedom from the federal income tax and the IRS.  You deserve a great deal of credit for your efforts to educate the American people on the need to fund the American government in a way that is good for America and returns freedom to the American people.

It is imperative, though, that we don’t replace the current income tax and the IRS with an alternative system that can still be manipulated by the Ruling Elite.  We must let Congress and the President know that the best way to replace the income tax and the IRS is with the FAIRtax. 

Make no mistake about it.  The FAIRtax is a grave threat to the Ruling Elites.  It will strip them of their power and their ability to control us though the tax system.  Their opposition to the FAIRtax will be fierce and unrelenting.  And don’t think for an instant that they won’t use half-truths, deception and downright lies in their desperate attempt to hang on to their power. 

However, with the support of this President, we can finally eliminate the income tax and the IRS!!!

Of course, the best course of action is to not only repeal the income tax and abolish the IRS but to repeal the 16^th Amendment as well so no future administration can ever shackle the American people with an income tax again.

We must come together and ensure that real tax reform, the FAIRtax, is not subverted by the Elites in D.C.

This will take the diligent efforts of all of us.  We need your financial assistance, and we need your grass roots assistance.

If you have contacts that will allow us to get more information to President Trump about the FAIRtax please let us know.

Please email us at info@fairtax.org and we will give you some options on how you can best help us. 

At a minimum, please call your Congressional representative and ask if he or she supports the FAIRtax.  If so, thank him/her for their support and suggest they become a cosponsor of HR-25 if they’re not one already.  If not, ask why not.  If your representative claims to be unfamiliar with the FAIRtax, offer to have someone come to their office and explain it to them. 

Please go to this link to invest in AFFT and help us pass the FAIRtax.  It’s an investment in your and your family’s future. 

THE SOLUTION—PASS THE FAIRTAX!

Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations?  The only way that they will is if the rest of us demand it!
   
Isn’t it time to end this ludicrous tax collection system and the IRS?

HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES

By contributing (investing) $10.40 per month, you help provide a financial base to AFFT.  If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
 
Please go to this link to invest in AFFT and help us pass the FAIRtax.  It’s an investment in your and your family’s future.