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:  Government Spending and the FAIRtax          

The FAIRtax is a platform to collect the nation’s treasury receipts, just as the income and payroll tax system is a tax collection platform.  The FAIRtax was designed to be revenue neutral, bringing in the same revenue that the current income tax system does.  

According to the U.S. Treasury Department’s Bureau of the Fiscal Service, revenue intake was just under $5 trillion for our latest fiscal year ended September 30, 2024.  The FAIRtax system while revenue neutral is much simpler, more efficient, less burdensome, less costly, less intrusive, and the list goes on.

The unimaginable waste that DOGE has uncovered has focused a great deal of attention on our nation’s runaway spending.  Multiple initiatives and reports have documented case after case where those we elected to spend our money wisely have instead squandered it both in the U.S. and in the remote corners of the world. 

Then there was the April 28, 2025, Wall Street Journal article highlighting how many retirees have elected to receive their Social Security benefits earlier than planned.  They’re reacting to the Social Security Administration’s publicized notice that the trust fund is currently projected to be insolvent by 2033, necessitating an over 20% reduction in scheduled benefits.

So, what does the FAIRtax have to do with U.S. government spending?  The simple answer is transparency.  Sunlight is an incredible disinfectant, and the FAIRtax inherently and elegantly exposes aspects of our government that no other tax collection system can do.  Our treasury basically brings in revenue, or borrowings, and spends on various expenditures.  Funds are constantly coming in and then going out. 

Currently, the income tax includes a whole host of exemptions, exclusions, adjustments, deductions, credits, and other loopholes that effectively result in less tax revenue in favor of some purported socially desirable behavior (e.g., EV tax credits, home mortgage interest deduction, tax advantaged retirement savings accounts, etc.). 

This is effectively government spending, but it does not show up in our fiscal budget as an expenditure line item, since it is shrouded under the guise of reduced treasury inflows. 

Under the FAIRtax, these phantom expenditures would simply vanish.  The U.S. would collect the FAIRtax on the retail purchase of new goods and services.  A portion would be remitted back to every U.S. citizen in the form of the prebate, a refund of taxes paid on life’s basic necessities and not an entitlement expenditure (i.e., not a nebulous spending program in the form of a deduction, exclusion, exemption, etc.).
 
Beyond the prebate, the FAIRtax has no other provisions that reduce inflow other than a few commonsense nuances such as no taxation on investments and donations to charities not having to pay the FAIRtax. 

Our government’s spending would be in its own swim lane, separate from the FAIRtax collection system, meaning no more blurred lines.  If politicians want to spend more on pet projects or the socially desirable trend of the day, they’d have to convince the American people of its efficacy and benefits. 

There’d be only two ways to fund runaway spending under the FAIRtax- 1) Raise the FAIRtax rate on every American, or 2) Continue borrowing by issuing more T-bills and T-notes as long as there remain willing buyers. 

The FAIRtax inherently promotes socially desirable behavior, but it doesn’t beat our citizens over the head like the income tax does.  For example, the FAIRtax elegantly encourages recycling since only new goods and services are taxed. 

The FAIRtax encourages more legal immigration, since people residing in the U.S. illegally are not eligible for the prebate.  The FAIRtax encourages greater U.S. employment since the employer matching FICA 7.65% payroll tax is no more. 

The FAIRtax encourages U.S. investment and would ignite a manufacturing, business, and productivity renaissance since the U.S. would be the world’s tax haven with a zero percent (0%) corporate income tax rate.  These are only a few of the many gentle encouragements the FAIRtax brings to the U.S.

Now, I’m not for a minute suggesting that under the FAIRtax our politicians on both sides of the aisle will immediately seek help in an “I spend too much” rehabilitation facility.  However, the transparency and sunlight on our simplified tax collection system and our government’s separate and stand-alone spending programs will be a breath of fresh air, and drastically reduce the ambiguity around our runaway spending. 

Who knows, with enough sunlight, we the people might even finally demand a significant curtailment in our government’s spending, and help this experiment in freedom we call America, survive just a little bit longer.

CONCLUSION

Jade has done an excellent job of demonstrating that the FAIRtax will dramatically how we can make government spending more clear and accountable.

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.