The Chairman’s Report October 21, 2022

  • by:
  • Source: FAIRtax
  • 10/20/2022

WHEN THE FAIRTAX IS PASSED --FEDERAL INCENTIVE CREDITS WILL WORK BETTER!

By Steve Hayes



When politicians are asked why they ignore the fact that an income tax punishes production and hard work, they never answer the question.  

When they are asked if people will work harder if they get to keep more of what they earn, they ignore that question too.

They simply say the income tax is “fair” and rapidly change the subject.
However, when the politicians want to promote something that is “good for us”, they know that money talks.  Just look at how they “encourage” alternative energy sources and electric cars, for example.  They provide financial incentives to those who produce them and those who buy them.  

One of the stated purposes of the recently passed Inflation Reduction Act is to stimulate demand for electric cars. Electric cars are still considerably more expensive than comparably equipped gasoline-powered cars.  Consequently, the politicians have decided that they need to make electric cars more attractive by offering people money if they buy one.

As is usually the case, the incentive to buy an electric car doesn’t come in the form of a direct incentive payment.  It comes in the form of a federal tax credit.  Using the tax code in this manner allows the politicians to promise something to everyone, but limit the promised benefit only to the people and groups who support them. 

Here is an example. A family owes $10,000 in federal income taxes, and at least that much or more has been withheld from the family’s earnings.  They are offered an income tax credit of $7,500 if they purchase an electric car. This means that come tax time, they owe the IRS only $2,500 and are now due a $7,500 refund which they can use toward the purchase of the electric car.

Of course, the down side for the family is that they have to wait until they file their taxes to get the money.

As this article by EVLife illustrates, the Inflation Reduction Act picks the people and manufacturers that the politicians believe “deserve” assistance in purchasing electric cars.  
Here is the analysis:
 
  • Only cars where final assembly took place in the U.S. qualify.
  • Only cars selling for less than $55,000 qualify.
  • Only joint filers making less than $300,000 qualify.
  • The credit must be used in the tax year you purchase the car.
  • If you only owe $3,000 in taxes you will only get a $3,000 tax credit and lose the other $4,500.
While requiring the final assembly to take place in the U.S. makes sense to a lot of people, if you want to encourage ownership of electric cars, why eliminate people making over $300,000?

If you want to help lower income people purchase an electric car, why not allow the unused portion of the $7,500 tax credit to be carried over to future years?

If we all need to drive electric cars, why make it so difficult and confusing?
 

INCENTIVES UNDER THE FAIRTAX


When the FAIRtax becomes law, Congress will no longer be able to hide its bias and favoritism toward one group or another.  

With the FAIRtax, the federal income tax is gone and so is the IRS.  People will pay their federal taxes when they make retail purchases of new goods and services. The money will be collected by the states and remitted to the U.S. Treasury.  

If Congress wants to provide a $7,500 incentive for people to purchase electric cars, then they can have the dealer discount the price $7,500 and send the $7,500 to the dealer.  That way, buyers get their incentive immediately.  There’s no waiting until tax filing season, because with the FAIRtax, there is no tax filing season.

If they want to require final assembly in the U.S. or set a limit on the price of the car, they can write those stipulations into the law that establishes the incentive.

However, a more efficient way of delivering incentives is far from the only benefit we’d get from replacing the income tax with the FAIRtax.  Eliminating the embedded costs of the current income/payroll tax system would reduce the price of the car by at least 10%-15% making it more affordable for everyone.

Competition would force the price of a $50,000 car to sell for $45,000 or less.  

Other incentives, like child tax credits, can be paid by simply increasing the amount of the prebate for families with children.

By replacing the income tax with the FAIRtax, Congress can eliminate a great deal of unneeded waste and complexity, and get down to the business of spending the money the FAIRtax will raise.
 

CONCLUSION


What is the real justification Congress and the bureaucrats have for not making incentives easy?

TRUST!

Congress and the bureaucrats don’t trust us.  They believe that they, and only they, are smart enough and enlightened enough to determine what’s in our best interests, and they think we’re incapable of “doing the right thing” without their guidance and assistance.

It is time for Congress to actually trust the American people.  

Trust us by giving us all of our money and let us decide how much federal tax we pay by how much we spend on new retail goods and services.

Trust us by passing legislation that provides incentive payments directly to us without requiring us to file complex federal forms.

Trust that we will grow the economy and let the American people demonstrate how prosperous our country can become.

Nothing will demonstrate that Congress trusts the American people more than enacting the FAIRtax!

Nothing demonstrates that Congress DOESN’T TRUST the American people more than its repeated failure to enact the FAIRtax!

Congress, trust the American people--Eliminate the IRS and the income/payroll tax system and enact the FAIRtax!

The income/payroll tax system is broken and no longer working—we can’t repair it but we can replace it with the FAIRTAX!
 
The FAIRtax will allow Americans to TAKE BACK CONTROL over their government and their lives. 

Join us and TAKE BACK CONTROL OF OUR COUNTRY AND OUR LIVES—NOT WITH BULLETS BUT WITH THE ELIMINATION OF ONE OF THE BIGGEST THREATS TO OUR LIBERTY AND ECONOMIC PROSPERITY—THE INCOME/PAYROLL TAX.
 
We all should remember Edmund Burke’s warning that applies to our efforts to TAKE BACK CONTROL,
 
“Nobody made a greater mistake than he who did nothing because he could do only a little.”
 
We should also remember this quote from George Orwell's 1984, which, if we do nothing, may foretell your and your children's future:
 

“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
 

WHAT CAN EACH OF US DO? 
 
We can write letters and make calls to our elected representatives and attend Zoom town hall meetings demanding that if they really want to allow Americans to “TAKE BACK CONTROL”, the first step is to eliminate the income/payroll tax system and enact the FAIRTAX!
 
TAKE BACK CONTROL!   Help us PASS THE FAIRTAX!
 
The IRS will be gone and we will pay our taxes when we make purchases.  
 
WE and not the Ruling Class and their minions in D.C. will decide how much federal tax we pay!
 
WE will know how much tax we and everyone else are really paying because taxes will no longer be hidden from us.  It will be clearly shown on every retail receipt.
 
If you have friends who don’t know about the FAIRtax, send them to FAIRtax.org.  Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.
 
Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax.

 
Is it hopeless?  When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who wrote, You see things; and you say “Why?”  But I dream things that never were; and I say “Why not?”
 

Isn’t it time for us to ask, “Why not?”  
 

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Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!

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