The Chairman’s Report July 18th, 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. 

The FAIRtax and reconciliation- How would it play out in Congress?

The FAIRtax Act, H.R. 25, was first introduced in Congress in 1999.  However, we very rarely discuss what would happen if the FAIRtax Act made it out of the House Ways and Means Committee, onto the House floor for a full vote and how the bill would advance in the Senate.
The Congressional concept of reconciliation has been in recent headlines as Congress attempts to pass the Big Beautiful Bill.  If the FAIRtax were the legislation being considered, would reconciliation even be a consideration?  First, let’s examine a brief history of this unique political construct. 

The Congressional Budget and Impoundment Control Act of 1974, created a congressional budget process and provided the special reconciliation rules with a primary goal of facilitating Senate consideration of deficit-reducing legislation.  This process begins with a budget resolution that instructs House committees regarding spending and income, which must first be passed by the House. 

In April 2025, the House passed the previously approved Senate budget blueprint which outlines spending for the federal government for the next 10 years. The measure calls for significant tax cuts, an increase in spending for immigration enforcement, an expansion of the Pentagon as well as unspecified spending cuts and a $5 trillion debt limit increase.  More specifically, the plan allows up to $5.3 trillion in tax cuts over the next decade. It will extend the 2017 tax cuts President Trump signed into law with the Tax Cuts and Jobs Act (TCJA) and provide for an additional $1.5 trillion in new tax cuts (no tax on tips, overtime, social security, etc.).

The budget resolution also directs both chambers to slash the deficit through spending cuts, with the Senate setting a minimum of just $4 billion for the next decade and the House calling for $1.5 trillion in cuts over the same period.

Fitting a budget reconciliation bill within these “targets” set out in the budget resolution can be cumbersome.  If the bill’s spending, net of new revenue exceeds the previously established targets, revenue offsets are then required, all while satisfying reconciliation rules that include not changing revenues during a fiscal year after the years covered by the reconciliation bill unless the provision’s title, as a whole, remains budget-neutral. Did your eyes just roll into the back of your head? 

These detailed requirements can force inclusion of “sunsets” of the type that set up the 2010 “fiscal cliff” of Bush tax cuts and that cause the individual provisions of the TCJA to expire after 2025, if not permanently extended with passage of the Big Beautiful Bill.

While avoiding the intricacies and minutiae of this process, and yes, there are quite a bit more, there are certain reconciliation restrictions referred as the “Byrd rule,” named for the late Senator Robert C. Byrd (D-WV) that Congress must adhere to.  Any provisions deemed “extraneous” are removed from the bill but consideration of the remainder of the legislation may continue. Many of the conditions applicable to the use of budget reconciliation, including determining which items included in legislation violate the Byrd rule, require consultation with the Senate parliamentarian.  We have seen the parliamentarian discussed more in June 2025 than I can ever recall. 

While all of this is certainly informative, what about the FAIRtax?  While certainly subject to debate that I hope we soon get the chance to explore, the FAIRtax would not require the unwieldly and burdensome process outlined above.  Why would this be the case with the FAIRtax? 

When the Congressional Budget Office (CBO) scores proposed legislation, the CBO has the requirement or at least flexibility depending on each House session’s established rules, to use dynamic (rather than static) scoring of proposed legislation in determining if the previously established budget resolution “targets” are met. 
This means that the FAIRtax, which was painstakingly crafted to be revenue neutral to the U.S. Treasury, would not increase the deficit by a single penny.  In fact, with dynamic scoring inclusive of conservative future economic growth assumptions that the FAIRtax has been shown to promote, drastically reduced illegal tax evasion, and other ancillary benefits, the FAIRtax would show a net reduction to our ever-increasing national debt and annual budget deficits. 

What does all of this mean?  When the FAIRtax passes the House, it would then only require a simple majority in the Senate to go to the President’s desk for signature!  All the back and forth with the CBO and the Senate parliamentarian on the effect of various provisions would all be nonexistent.  The FAIRtax does it again!  Even in its legislative approval process, the FAIRtax is strikingly more efficient than the outdated and abusive IRS and the current income and payroll tax system.  What are we waiting for?

CONCLUSION

Jade has done an excellent job of explaining the path that will be followed to enact the FAIRtax and improve the U.S. economy and the lives of all Americans.

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.