This week’s Chairman’s Report is written by Bob Paxton. Bob began his radio career while still in high school doing weekends at WMDE in Greensboro, North Carolina.
In 1983, Bob decided a career change was in order and left the radio business to become a computer programmer. He spent eleven years at Central Florida Community College and fifteen years at NEFEC in Palatka before retiring in 2011.
In 2013, FAIRtax Power Radio was born starting as a weekly program on Leading Edge Radio Network, evolving into a weekly podcast, and then a weekly digital video stream. Here is a link to listen to the show.
THE STATES WITH NO STATE INCOME TAX PROVIDE THE PROOF—BUT OTHER STATES NEED TO REPEAL THEIR INCOME TAX IMMEDIATELY
There are a good number of people promoting the FAIRtax at the national level who believe that success at the state level is going to be the first step in getting rid of the federal income tax and putting the IRS out of business. It’s sound, logical thinking.
As a FAIRtax volunteer, I’ve been asked more than once, “How do you know the FAIRtax will work? Has anything like the FAIRtax ever been tried anywhere?”
To date, the best answer we have for that question is to point out that Texas, Tennessee and Florida all have thriving economies and none of them impose a state income tax. All have a state sales tax, but in every case it’s a traditional, exclusive tax that’s added on at the cash register. Services are largely exempt, and there are a number of other exemptions and exclusions as well. None of them exempt purchases up to the poverty level with a Family Consumption Allowance and a prebate. Bottom line, there’s nothing like the FAIRtax in effect anywhere.
For several years, we’ve been watching efforts in both Georgia and Alabama to replace their state income taxes with a consumption tax modeled after the FAIRtax. It’s been slow going, but confidence is high that residents of those states will really like getting bigger paychecks because state withholding goes away. They’ll like getting a prebate every month, and they’ll like not having to file state income tax returns again.
Additionally, when people see for themselves that replacing an income tax with a FAIRtax-style consumption tax attracts jobs and stimulates economic growth, there will be a groundswell of support for adopting that same model at the national level. In other words, when people see just how well the FAIRtax works for a state, they’ll want the same thing for the nation.
As noted, efforts to implement a state level FAIRtax have been underway for years in Georgia and Alabama. So, imagine my surprise when a social media post pops up in my feed pointing me to an article loudly proclaiming that the governor of Mississippi has just signed a bill eliminating that state’s income tax. What?? Mississippi?? Didn’t see that coming.
Well, it turns out that Governor Tate Reeves of the Magnolia State has indeed signed legislation aimed at getting rid of the state’s income tax. That sounds good at first glance, but the rest of the story is not so encouraging.
According to television station WAPT in Jackson, here’s what Mississippi is actually doing. First, Mississippi’s income tax is not being replaced by anything that even remotely resembles the FAIRtax.
Instead, the bill calls for the income tax rate to be reduced by 0.25% every year until 2030. At that point, Mississippi residents will still be paying a state income tax of 3%. After that, further reductions in the tax rate will depend on the gap between the state’s revenues and its expenses until it is eventually eliminated altogether.
Now I’m not a betting man, but if I had to lay down a wager, I’d say that little provision means that Mississippi residents have been sold a pipe dream. There is no provision in the legislation that says the income tax will be gone as of a certain date. Instead, the state is telling its residents that we’ll get rid of our income tax when we reach the point where we don’t need your money any more. When do you think that day will come?
Instead of replacing the lost income tax revenue with a consumption tax, Mississippi is raising their gas tax from the current 18 cents per gallon to 27 cents per gallon by July 2027. After that, it could be raised even more if the state needs more money for roads. You shouldn’t need a crystal ball to tell what’s going to happen here, either.
Finally, the bill that Governor Reeves signed is an open ended phase out of the income tax over several years. In reality, the process could take a decade or more. That means that there is plenty of time for a subsequent state assembly to pass legislation stopping the whole process dead in its tracks long before it reaches completion.
So, while the headline “Mississippi Eliminates its State Income Tax” might look like something that FAIRtax advocates can applaud, there’s really nothing here that advances our cause.
Alabama, Georgia and possibly Nebraska remain the best hope for showing the nation what replacing the income tax with the FAIRtax would do.
CONCLUSION
As Bob points out that while many of us are delighted that many states and President Trump are calling for the end of the income tax and the IRS, we are only one election away from these reforms being stopped.
We need to move now and put a stake in the heart of the income tax and the IRS so that they cannot be easily resurrected by a subsequent administration.
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.
In 1983, Bob decided a career change was in order and left the radio business to become a computer programmer. He spent eleven years at Central Florida Community College and fifteen years at NEFEC in Palatka before retiring in 2011.
In 2013, FAIRtax Power Radio was born starting as a weekly program on Leading Edge Radio Network, evolving into a weekly podcast, and then a weekly digital video stream. Here is a link to listen to the show.
THE STATES WITH NO STATE INCOME TAX PROVIDE THE PROOF—BUT OTHER STATES NEED TO REPEAL THEIR INCOME TAX IMMEDIATELY
There are a good number of people promoting the FAIRtax at the national level who believe that success at the state level is going to be the first step in getting rid of the federal income tax and putting the IRS out of business. It’s sound, logical thinking.
As a FAIRtax volunteer, I’ve been asked more than once, “How do you know the FAIRtax will work? Has anything like the FAIRtax ever been tried anywhere?”
To date, the best answer we have for that question is to point out that Texas, Tennessee and Florida all have thriving economies and none of them impose a state income tax. All have a state sales tax, but in every case it’s a traditional, exclusive tax that’s added on at the cash register. Services are largely exempt, and there are a number of other exemptions and exclusions as well. None of them exempt purchases up to the poverty level with a Family Consumption Allowance and a prebate. Bottom line, there’s nothing like the FAIRtax in effect anywhere.
For several years, we’ve been watching efforts in both Georgia and Alabama to replace their state income taxes with a consumption tax modeled after the FAIRtax. It’s been slow going, but confidence is high that residents of those states will really like getting bigger paychecks because state withholding goes away. They’ll like getting a prebate every month, and they’ll like not having to file state income tax returns again.
Additionally, when people see for themselves that replacing an income tax with a FAIRtax-style consumption tax attracts jobs and stimulates economic growth, there will be a groundswell of support for adopting that same model at the national level. In other words, when people see just how well the FAIRtax works for a state, they’ll want the same thing for the nation.
As noted, efforts to implement a state level FAIRtax have been underway for years in Georgia and Alabama. So, imagine my surprise when a social media post pops up in my feed pointing me to an article loudly proclaiming that the governor of Mississippi has just signed a bill eliminating that state’s income tax. What?? Mississippi?? Didn’t see that coming.
Well, it turns out that Governor Tate Reeves of the Magnolia State has indeed signed legislation aimed at getting rid of the state’s income tax. That sounds good at first glance, but the rest of the story is not so encouraging.
According to television station WAPT in Jackson, here’s what Mississippi is actually doing. First, Mississippi’s income tax is not being replaced by anything that even remotely resembles the FAIRtax.
Instead, the bill calls for the income tax rate to be reduced by 0.25% every year until 2030. At that point, Mississippi residents will still be paying a state income tax of 3%. After that, further reductions in the tax rate will depend on the gap between the state’s revenues and its expenses until it is eventually eliminated altogether.
Now I’m not a betting man, but if I had to lay down a wager, I’d say that little provision means that Mississippi residents have been sold a pipe dream. There is no provision in the legislation that says the income tax will be gone as of a certain date. Instead, the state is telling its residents that we’ll get rid of our income tax when we reach the point where we don’t need your money any more. When do you think that day will come?
Instead of replacing the lost income tax revenue with a consumption tax, Mississippi is raising their gas tax from the current 18 cents per gallon to 27 cents per gallon by July 2027. After that, it could be raised even more if the state needs more money for roads. You shouldn’t need a crystal ball to tell what’s going to happen here, either.
Finally, the bill that Governor Reeves signed is an open ended phase out of the income tax over several years. In reality, the process could take a decade or more. That means that there is plenty of time for a subsequent state assembly to pass legislation stopping the whole process dead in its tracks long before it reaches completion.
So, while the headline “Mississippi Eliminates its State Income Tax” might look like something that FAIRtax advocates can applaud, there’s really nothing here that advances our cause.
Alabama, Georgia and possibly Nebraska remain the best hope for showing the nation what replacing the income tax with the FAIRtax would do.
CONCLUSION
As Bob points out that while many of us are delighted that many states and President Trump are calling for the end of the income tax and the IRS, we are only one election away from these reforms being stopped.
We need to move now and put a stake in the heart of the income tax and the IRS so that they cannot be easily resurrected by a subsequent administration.
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.