Meet Tom Patterson
Today’s Chairman’s Report is written by Tom Patterson. Tom is a graduate of Yale and obtained his M.D. at the University of Nebraska.
In addition to being an emergency room physician, Tom served in the Arizona State Senate as both the Majority Leader and the Minority Leader. He also served as the Chairman of the Goldwater Institute for thirteen years.
Tom is also on our Advisory Board.
Here is Tom’s article.
Critics of Donald Trump once counted tax evasion among his many faults. But it turned out that he wasn’t breaking any tax laws. He was simply utilizing the complex web of exemptions, deductions, and other rules available to reduce his tax bill to near zero.
It would be hard to imagine a worse tax system than our federal government’s. It is based on taxing economic productivity, which in a free market system benefits us all. Politicians use taxation not only to generate revenue but to pursue a grab bag of policies ranging from welfare programs to “climate change,” home ownership, and subsidization of state and local taxes.
The tax code is hopelessly complex and expensive to operate. Individuals and businesses spend around $37 billion and over 3 billion hours annually in tax compliance, up to 10 times as much as taxpayers in other wealthy countries.
Phil Gramm was right 25 years ago to suggest that the best option would be to scrap our entire tax system and replace it with a single national sales tax. He didn’t succeed, of course, but the concept is so sound it still remains active in academia, think tanks, and government white papers.
Representative Buddy Carter introduced the Fair Tax Act of 2023 in Congress this year and was promised a floor vote. This bill would eliminate all personal and corporate income taxes, payroll taxes for Medicare and Social Security, estate and gift taxes as well as the Internal Revenue Service itself.
Instead, there would be an effective 30% consumption tax, but households would get a tax rebate check each month adjusted for family size and income. The rebate would have the effect of exempting all purchases up to the poverty line from taxation. The tax rate and rebates could be adjusted to make the tax revenue neutral and roughly as progressive as our current structure.
Still, Democrats and their media buddies immediately attacked the proposal as “ tax cuts for the rich, period” and a “Republican dream to build a wealth aristocracy.” Even the Wall Street Journal criticized it on political grounds, worrying that even though it “made sense,” it might hand Democrats a juicy campaign issue.
But its critics, perhaps intentionally, misunderstand the bill. Americans would not, on the net, pay more taxes, nor would low income earners be punished. The tax burden wouldn’t grow but only be redistributed.
Outsized deductions and other tax shelters would vanish, meaning the ultra-wealthy and the big spenders would pay taxes more appropriate to their incomes. Savers would obviously benefit. Investments could grow tax-free.
Some critics argue that tax evasion would be a problem. But that’s true of any tax scheme, including the one we have now. The IRS estimates that Americans underpay their taxes by $500 billion annually, in addition to the billions of fraudulent claims in programs like the Earned Income Tax Credit.
The Fair Tax wouldn’t have to be perfect to be more efficient and less cumbersome than our current system of self-reporting buttressed with audits. Avoiding the stressful hassles with the IRS would be a welcome relief to many Americans.
A more substantial concern is that future legislatures may try to augment the consumption tax by adding back income and other taxes so that we end up with the worst of both worlds. A constitutional amendment prohibiting an income tax would be preferable. Otherwise, careful consideration must be given to rigid self-activating safeguards to protect taxpayers.
The Fair Tax has never passed because of political opposition from groups that have too much to lose by giving up the status quo. Yet if government wants to subsidize things like housing, electric vehicles, or healthcare, it would be more transparent and accountable to appropriate the money rather than disguising it as a tax deduction or credit. Likewise, if Americans want to financially support charitable causes, and they do, they should do it with their own money, not a partial government subsidy that comes with strings attached.
Tax reforms are always opposed by those who benefit from the current structure. But the Fair Tax would be a far more equitable and transparent way to fund government. It deserves a look.
Tom Patterson has devoted his life to trying to improve the lives of people around him. He backed Arizona school choice when no one seemed to support it and is proud that school choice is now available to all Arizona students.
He believes that the present income/payroll tax system is harming America and supports the FAIRtax because not only is truly fair but because of the economic benefits to Americans.
Tom agrees with the rest of us that the FAIRtax transfers power from the government and bureaucrats to the people. We, not the bureaucrats and D.C., decide how much tax we pay.
Congress and D.C. know that there is a better alternative to the present system—the FAIRtax.
Instead of spending time and money doing endless hours of paperwork that don’t create anything of value to yourself, your family or the nation, why not eliminate the unnecessary waste?
Isn’t it time to end this ludicrous tax collection system and the IRS?
When the FAIRtax is enacted, there will be no need to fear being audited by the IRS or raided by armed IRS agents because there will be no more IRS.
There is going to be a vote on the FAIRtax in the House of Representatives. McCarthy and the other elites didn’t want it, but it was forced on them.
We now have the opportunity to force all Members of the House to show where they stand. They can:
- Vote for the present income/payroll tax system or for the FAIRtax.
- Support the corrupt income tax and the IRS or eliminate it. It can’t be any simpler than that.
- Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
- Support the largest transfer of power from government to the people, the FAIRtax, or not.
If Members think that the FAIRtax needs to be changed, then they can propose the change. Don’t let them reject the entire bill because it has a “flaw” that can be easily addressed.
Please stand with us and demand that your representative support a much fairer, much simpler and much more efficient way to fund the government—the FAIRtax!
The FAIRtax doesn’t pick winners and losers. Because it taxes spending, not earnings, the FAIRtax lets everyone save for their retirement tax free.
The FAIRtax will allow us to TAKE BACK CONTROL.
The income/payroll tax system is broken and no longer working—we can’t repair it but we can replace it with the FAIRTAX!
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!
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