Today’s Chairman’s Report is written by retired Congressman John Linder. John was the lead sponsor of the FAIRtax from its introduction to when he retired.
MR. PRESIDENT—REPLACE THE INCOME TAX WITH THE FAIRTAX
President Trump’s successful election to a second term was also the 50th anniversary of my election to the Georgia House of Representatives. I’ve been around politics a long time. No one in my lifetime, not even the sainted Ronald Reagan, accomplished as much fundamental change in eight years as Donald Trump accomplished in ten months.
He has:
- Used the power of his personality and of his office to put in motion the resolution of conflicts all over the world.
- Achieved a realignment in the Middle East that we were told was an unreachable goal.
- Made permanent tax provisions that provided relief to the middle class-- that the media assured us couldn’t be done.
- And in so doing, brought substantial tax relief to service workers, hourly employees and people who rely on Social Security for their retirement.
The disclosures of IRS abuses of conservative groups in 2010 – 2013 should have been enough to shut them down, but the IRS survived to leak President Trump’s tax information at a politically convenient time and leaked the tax information of prominent wealthy tax payers.
But the IRS’s most damaging activity is not their illegal political stunts, but the legal consequences resulting from our income tax laws.
The price we pay for every loaf of bread carries the tax costs of every company that it took to get that bread to your table. That includes fuel suppliers, refiners, ore miners, steel makers, tractor and truck manufacturers as well as the bakers, distributors and grocery stores. Each company pays Social Security taxes for their employees and federal income taxes on their profits and these increase the costs of their products and, thus, increase the price we pay.
A study has concluded that the embedded cost of the IRS is, on average, 22% of the price charged to consumers.
Yet, perhaps even more costly is the impact the IRS has on the decisions those companies make on a daily basis. The management of a business is focused on the customers, employees and owners of the business. But sitting in the front row of that board room is the IRS tax code shading every decision they make.
What does this do to our companies in the global markets? Our competing nations have a Value Added Tax. This is a tax where each company that participates in making a product pays a tax on the value they add. When they sell us an automobile, the VAT is refunded at their border and it arrives in our show rooms with no tax burden to compete with our automobiles with a 22% tax component in the price. That is a huge price disadvantage for the US. The tax component in our price system works against us when we ship into their markets also.
There is a simple way to fix this. Abolish the IRS and repeal all taxes on income and on our ability to transfer assets to our loved ones. Gone are income taxes, payroll taxes, business taxes, gift taxes and death taxes. In their place will be a one-time tax on personal consumption of new goods and services collected when you pay.
No one will know how you earn, how much you earn or how you spend. No agency of government will know more about you than you are willing to tell your children.
This changes the world! If we eliminate all taxes on capital and labor and tax only personal consumption every company in the world will build their next plant in the US.
When Bill Archer was the Chairman of the Ways & Means committee, he liked to quote a study of a large number of foreign corporations. When asked what they would do in their planning if the US eliminated all taxes on capital and labor and taxed personal consumption instead, eighty percent said they would build their next plant in the US. Twenty percent said they would re-locate their international headquarters to the US.
The FairTax accomplishes all of this and more. The Department of Health and Human Services determines each year how much a given sized family must spend to buy their essentials. They call that number the "Federal Poverty Guideline". For 2025 that number for a family of four is $42,300. Every household, regardless of wealth, will receive a distribution each month to totally cover the tax costs on that amount of spending. Beyond that we are all voluntary taxpayers and we will all pay the same.
Our current system taxes income. The FairTax taxes wealth. The first thing wealthy people do is stop receiving income and live off capital gains. They pay nothing into our retirement programs. Wealthy people control their income tax burden legally with the help of tax attorneys and tax accountants. But they all spend, and under the FairTax every dime they spend will contribute to Social Security and Medicare. No one can help them avoid the sales tax. And ultimately, all wealth is spent. If not by the earner, it will be spent by the heirs.
That which is in the banks and markets in the meantime will be borrowed by us to create businesses and jobs.
All legal and illegal visitors will contribute. So will the $3 trillion underground economy. But what will overwhelm those sources will be the $20 to 30 trillion in offshore financial centers that will come to the US. I once asked Alan Greenspan how long it would take see that money in our markets and banks. He said, “Months.”
In our country, fundamental change requires economics to take a back seat to politics, and the politics is on the side of the FairTax.
In Georgia, several candidates are promising to eliminate the income tax. We commissioned Insider Advantage to conduct a poll of Georgians to test support for the National FairTax. Once explained, as I have explained it here, 55% support the FairTax. Republicans support it at 63% and Democrats at 49%. Support among Blacks is at 56%.
And then there is this: In the 2004 election, several candidates ran on the FairTax and won. The following June Democrat Leader Nancy Pelosi and their budget leader John Spratt held a press conference to trash the FairTax. A Roll Call article repeated all of their talking points, then closed with a quote from a senior Democrat staff member: “If the American people catch on to how simple and fair this is, we’re toast.”
President Trump must add the FairTax to his many successes. With no income tax, your take-home pay will rise and with no tax component in the price system, prices will fall. Everyone’s purchasing power will dramatically grow. But more important, President
Trump will dramatically increase your freedom.
In order for other nations to keep their industries and jobs at home they too will have to eliminate all taxes on capital and labor and tax only personal consumption and President Trump will have spread lasting freedom across the world.
Just imagine the nations of Europe racing to see who could be first to pass … the TrumpTax?
CONCLUSION
John has clearly stated why the FAIRtax is the answer to President Trump as he moves to eliminate the income tax.
Please send this report to your Members of Congress and ask if they agree with Congressman Linder.
The FAIRtax, a national retail sales tax on new retail goods and retail services, provides a family credit so that all purchases up to the poverty level for each family are not taxed. There is no withholding from your paycheck and YOU NEVER HAVE TO FILE A TAX RETURN TELLING THE GOVERNMENT HOW MUCH YOU EARNED AND HOW MUCH YOU SPENT, AND YOU’LL NEVER BE HARASSED BY THE IRS EVER AGAIN.
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 16th 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.