Today’s Chairman’s Report is authored by Roger Buchholtz. Roger has founded and served as president for five corporations with operations in Michigan, Florida and Illinois. He is on the American For Fair Taxation Board of Governors and is an active and very effective supporter of the FAIRtax. Here is an article written by Roger.
A Tax for Trump & America
President Trump has said he wants to eliminate the income tax and create a Department of External Revenue Service (ERS). His tariffs will be a primary revenue source for the ERS but that revenue will likely be insufficient to fund our government, even if it is reduced in size. A simple flat income tax has been suggested by some, but such a tax will remain neither simple nor flat for very long. The income tax in 1913 started out as a simple flat tax. Every tax reform effort since then has been to make the tax simpler and flatter, but where are we today? We have a more complicated, incomprehensible, intrusive, inefficient tax system than ever, and worse yet, it is impossible to comply with our current income tax code. Because of this, all taxpayers are in violation of the law and therefore subject to criminal prosecution at the whim of IRS personnel or corrupt politicians.
Any income tax is partially hidden as it is paid at every stage of production of American made goods and services and adds about 20% to the finished prices we pay. This places American products at a ~20% competitive disadvantage to foreign produced goods and services which generally come into the U.S. untaxed. Tariff opponents claim that tariffs will raise prices on foreign products but they fail to point out that income taxes raise the prices much more on American made products, which are a much larger portion of American consumer purchases.
A flat income tax will allow the resale of all the tax favors that have gotten our current tax code to where it is today. More lobbyist money goes to DC to buy tax favors than any other purpose. This lobby money corrupts our representative form of government because our representatives do not need to talk to constituents when there is someone standing in their doorway with all the money they need for their reelection (and often piggy bank for themselves and their friends). The simplest flat tax is a retail sales tax with no exceptions, exemptions, etc.
A sales tax could readily be collected by the states and remitted to the ERS. Millions of dollars have been spent on researching this concept by some of America’s top economists and a bill is now before Congress (HR 25) called the FAIRtax. Everyone pays the retail sales tax every time they make a purchase, so it is very visible. This visibility creates a natural limiter to the level of taxation. The FAIRtax proposal and the research behind it can be viewed at: FAIRtax.org. Reduced government spending and tariff revenues would allow a lower HR 25 tax rate than stated.
Our current income tax system costs our economy more than it collects when collection and compliance costs and the cost of less-than-optimal financial decisions for tax minimization purposes are included. With a retail sales tax, collection and compliance cost are reduced by 90% and less-than-optimal financial decisions to minimize taxation are eliminated, as the sales tax is paid only on retail purchases (no business-to-business taxes). America will have the most attractive business environment in the world with tariffs protecting American businesses and the FAIRtax eliminating their income taxes.
The passage of a flat income tax will delay true tax reform for another generation. Don’t be fooled. Our Founding Fathers thrice prohibited an income type tax in the Constitution. It was for good reasons, one of which is that such direct taxes (to the individual or organization) are subject to abuse, as we have witnessed.
Another problem is that any income tax is applied to income earned when a person or organization is being productive, such as working, investing, saving, etc. An income tax is a reduction in the reward for productive behavior.
It is counterproductive for a society and economy to punish productive behavior. Consumption taxes, like sales taxes (and tariffs), minimize this drag on an economy and, as pointed out above, improves our competitiveness with foreign produced goods and services by ~20%. The elimination of productive-behavior-punishment and improved competitiveness would provide us with a permanent economic stimulus.
Income taxes tend to corrupt our elected officials and create excessive lobby influence. This was not intended by our Founding Fathers. A retail sales tax returns the power to the people and reinforces our representative form of government. Economists and political scientists readily recognize the desirability of consumption taxes. If Trump can get this through Congress, we could more easily handle our national debt due to the resulting more robust economy… What a legacy!
Congress, however, can be an impediment as the FAIRtax reduces their power and money largess. Passage will require presidential leadership, DOGE and pressure from the people.
CONCLUSION
Roger is a businessman who has experienced the drag on business development created by the income tax system and the IRS. His article
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 again 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.