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 Will Not Make Prices Rise
One of the most common mischaracterizations of the FAIRtax is that it’s a massive tax on everything people buy, and that it will result in skyrocketing prices that people simply can’t afford.
But is that what’s really going to happen? The answer is unequivocably no!
This very fair question is worth greater examination. How will the FAIRtax not result in massive price increases? We must first start with the economic reality that today’s retail prices are significantly inflated by the costs of the current tax system being passed on to us, the retail consumers. We don’t see it on our receipts, but those costs are definitely present in the price of every product and service we buy today.
Every employer who matches the 7.65% payroll taxes we pay incurs another cost of doing business. Corporations, both large and small pay income taxes that subtract away from profits otherwise available to employees and shareholders. The economic reality that most people don’t see is that income and payroll taxes are just like electricity, rent, payroll, and equipment. These are all costs of doing business that every business must add up and consider in total when determining how much to charge for their product or service.
Studies from multiple renowned economists available on fairtax.org note that these hidden tax costs account for anywhere from 15% to 25% of an item’s retail price depending on the industry. This means that while we can’t see that the $100 item at Wal-Mart would be only $80 if there were no income and payroll taxes, it is an economic certainty. The U.S. capital markets are efficient, or at the very least semi-efficient, meaning that with competition, prices will drop as much as possible. Competing business will strive to take away market share from competitors by lowering their prices, if they are able to lower their product or service’s cost makeup.
With the FAIRtax, we will keep our entire paycheck free of federal income and payroll tax withholdings. Then, instead of paying another embedded 15% to 25% income and payroll tax on most everything we purchase, we will pay an inclusive 23% FAIRtax when purchasing new goods and services. The difference is that those embedded costs are invisible. The FAIRtax will be clearly shown on your receipt. We will be exchanging a nebulous unknown embedded cost of income taxes for something simple, fair, and visible.
The economic truth is indisputable. First, with the FAIRtax we will bring home our entire paychecks free of any federal withholding or payroll taxes. Then, instead of paying a massive new tax on top of the prices we’re currently paying, we’ll simply engage in the “exchange” discussed above. The result will be a clear increase in purchasing power and Americans’ overall economic circumstances. It also results in positive macro effects on the U.S. economy with increases in GDP, real wages, and so on.
So, when we get the FAIRtax closer and closer to passage, do not be fooled by the false arguments that will undoubtedly be thrown our way. You’ll be told by dishonest politicians and the media that, “The FAIRtax will increase the price of everything you buy by 23% to 30%.” This is undeniably and demonstrably false! Be prepared when this deceptive and deceitful argument rears its ugly head. The FAIRtax will be included in the cost of new goods and services, true, but that is only the beginning of the FAIRtax story.
The rest of the story is that the FAIRtax will eliminate the existing embedded taxes that lurk unseen in today’s retail prices. Getting rid of these costs will drive the cost of everything down substantially. Remember also that the prebate refunds to you the FAIRtax you paid on life’s necessities.
With the FAIRtax you keep your entire paycheck. No more having to buy our goods and services with “after tax” dollars. This is only the tip of the iceberg when it comes to FAIRtax. Its benefits will more than offset its cost to us at the retail cash register. The inevitable argument that will be hurled in our direction is lazy, uninformed and completely untruthful, and now you can articulate exactly why.
CONCLUSION
Jade’s article clearly exposes the fact that we already have a retail sales tax. It is in two forms. One is the that we have money withheld from our paychecks and can only make purchases with the remaining amount we have.
The other sales tax is hidden the cost of the goods and services we purchase. With the FAIRtax, all these taxes levied on behalf of the federal government are clear for all of us to see.
The American people actually seeing the real costs of the federal government being paid by each of us is the biggest fear of the Elites.
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.