The Chairman’s Report September 20th, 2024

A study issued by the Institute on Taxation and Economic Policy looked at the federal, state and local taxes paid by undocumented immigrants:

•        Undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. Most of that amount, $59.4 billion, was paid to the federal government while the remaining $37.3 billion was paid to state and local governments.
•        Undocumented immigrants paid federal, state, and local taxes of $8,889 per person in 2022. In other words, for every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue.
•        More than a third of the tax dollars paid by undocumented immigrants go toward payroll taxes dedicated to funding programs that these workers are barred from accessing. Undocumented immigrants paid $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes in 2022.
•        At the state and local levels, slightly less than half (46 percent, or $15.1 billion) of the tax payments made by undocumented immigrants are through sales and excise taxes levied on their purchases. Most other payments are made through property taxes, such as those levied on homeowners and renters (31 percent, or $10.4 billion), or through personal and business income taxes (21 percent, or $7.0 billion).
•        Six states raised more than $1 billion each in tax revenue from undocumented immigrants living within their borders. Those states are California ($8.5 billion), Texas ($4.9 billion), New York ($3.1 billion), Florida ($1.8 billion), Illinois ($1.5 billion), and New Jersey ($1.3 billion).
•        In a large majority of states (40), undocumented immigrants pay higher state and local tax rates than the top 1 percent of households living within their borders.

Of course, on the other side of that coin, there are many undocumented immigrants in the country who are working for cash and paying no federal taxes. 
 
How does the FAIRtax force Congress to address the immigration issues?

The FAIRtax is very progressive because of the prebate which is calculated from the Family Consumption Allowance.  The current poverty level for a family of four is roughly $40,000.  Consequently, a family of four pays no FAIRtax on their first $40,000 of spending for new goods and services.  The tax they pay at the cash register on that spending is refunded to them in the prebate.  They only start paying the FAIRtax out of their own pocket when their retail spending for new goods and services exceeds $40,000.

However, a key feature of the FAIRtax is that the prebate is available only to legal U.S. residents with legally issued Social Security numbers.  Not only will the parents need valid Social Security cards, but each of their children will need one as well.  It will be much more difficult to obtain illegal cards for this many people and the likelihood of fraud being discovered will increase.

Under the FAIRtax, undocumented immigrants will find that they are paying at least 20% more out of pocket than legal residents are on the same purchases.  That’s because with no prebate, they are paying the full 23% FAIRtax out of their own pocket on every retail purchase they make.  This will put pressure on those who hire these workers to increase their pay by at least 20%.

When undocumented workers are 20% more expensive to hire, hiring legal US workers becomes much more attractive leading to fewer jobs for undocumented immigrants.

Fewer available jobs for undocumented immigrants will discourage immigrants from coming to the U.S. if they cannot find jobs to support themselves or their family.
  
Another factor to those of us who believe in the rule of law, almost all the $59.4 billion of federal tax is paid by the undocumented immigrants who are illegally using forged Social Security cards to gain employment.

Why will the FAIRtax force action on immigration?  It will happen because America needs immigrants but in order to receive the prebate, those immigrants will have to be in the country legally.  No one wants to see starving people and undocumented immigrants who can no longer feed their families.  Solving this problem will create immense pressure on Congress to stem the flow of illegal immigration and encourage legal immigration.

The solution may be to deport some and allow others to have work permits and a pathway to citizenship.   However, after the passage of the FAIRtax, the issue will have to be confronted.

People ask, with all these benefits to the U.S., why doesn’t the Congress enact the FAIRtax?  The Elites and Congress know about the FAIRtax. They’ll even admit that the FAIRtax:
 

•        Is so simple everyone can understand and comply with it without having to hire expensive professional help.
•        Shows the true cost of the federal government on every retail receipt so all of us can understand how much we are paying in federal taxes and determine if the benefits that we are receiving are worth the cost.
•        Helps U.S. companies compete with foreign competitors and not be required to move overseas to stay in business.
•        Keeps jobs in the U.S. rather than exporting them to other countries.
•        Permanently establishes the solvency of Social Security and Medicare.
•        Eliminates special treatment for any group of taxpayers.
•        Benefits lower income groups more than the present income/payroll tax system and is FAIR.
•        Eliminates the need to file tax returns.
•        Eliminates the need for the IRS!
•        Allows each of us, not the Elites and their minions, to determine the amount of federal tax we pay.
•        IS THE LARGEST TRANSFER OF POWER FROM D.C. TO THE PEOPLE SINCE THE CONSTITUTION WAS ADOPTED.

Still, they refuse to act.  The reason is simple.  The current income/payroll tax system gives the elites the two things they crave the most—power and money.  The elites and many Members of Congress have found that simply proposing a change to the tax law brings a flood of donations from both those who would benefit from the change and want to see it enacted, and from those who would be hurt by it and want to discourage its passage.

The elites have also discovered that they can use the tax code to reward their friends, punish their enemies and influence people’s decisions by giving tax breaks to those who engage in favored behavior and tax penalties to those who go against their will.

The American people will overwhelmingly support the FAIRtax if they are given the chance and all of us will benefit.

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?

There is going to be a vote on the FAIRtax in the House of Representatives. 

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 amended to address a problem, then they can propose the change.  Don’t reject the entire bill because it has a perceived “flaw” that can be addressed and, if it is a real “flaw”, corrected in the final bill.
 
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.