The Chairman’s Report September 8th, 2023

  • by:
  • Source: FAIRtax
  • 09/08/2023

The Internal Revenue Code—A Tool for Social Engineering


Most of us naively think the Internal Revenue Code (IRC) is intended to raise the income needed to fund the operations of the U.S. government.  Most of us don’t like the income/payroll tax system and want to replace it with the FAIRtax.

It’s long been established that the DC elites love the income/payroll tax system because it’s a great source of money and power for them.  However, there’s a lesser known reason why DC has been so steadfastly opposed to replacing the income tax with the FAIRtax.  The income/payroll tax system gives them a place to hide their social engineering in the tax code.  This August 2023 report from the Tax Foundation explains that raising income is not the only goal of the IRC and that the IRC is being used for social engineering.

Here are some of the key findings:
  • In tax year 2020, taxpayers claimed more than 159 million tax credits on their individual income tax returns worth a total of more than $277 billion-- an increase of $35.3 billion from tax year 2019.
  • Taxpayers with adjusted gross income below $50,000 claimed 54 percent ($149.6 billion) of tax credits by amount while taxpayers with adjusted gross income above $200,000 claimed 13 percent ($36.8 billion) in 2020.
  • The largest tax credit by both number of claims and by amount was the Child and Dependent Tax Credit, claimed on 39.3 million tax returns for a total benefit of $84.4 billion.
  • From 1990 to 2020, the value of tax credits has increased nearly 10-fold after adjusting for inflation, reflecting how lawmakers have increasingly relied on the tax code to administer social benefits.
  • In tax year 2020, more than 164 million people filed tax returns with the Internal Revenue Service, and they reduced the taxes they owed by more than $277 billion using the tax credits.
  • There are more than 28 different tax credits in the IRC.

A tax credit is different from a deduction.  A tax credit is applied directly against the amount of tax owed, while a deduction merely reduces the amount of income subject to taxation.  If you received a  $1,000 deduction and were in the 20% federal income tax bracket, you would reduce your federal income taxes by $200.

But, if you receive a $1,000 tax credit, you would reduce your federal income taxes by the full $1,000 regardless of your tax bracket.  

Until recently, a tax credit applied only to the amount of tax owed.   For example, if you got a $1,000 tax credit but only owed $750 in federal income taxes, the credit would reduce your taxes to zero, and the remaining $250 would go unused.

Many in Congress quickly saw an opportunity and began making more and more of these credits “refundable.”  This means that in my example above, the unused $250 would become a refund to the taxpayer.  Giving refundable tax credits to people who owe little to no income tax has become a great way to just give people money.  Of course, most of these credits come with strings attached.  You have to do what the elites want you to do in order to qualify for the credit.


Prior to realizing that they can hide their social engineering programs in the tax code, Congress was required to pass a bill specifically enabling a program.  For Americans, it was relatively simple—you either qualified or you didn’t.

Congress quickly discovered that putting cash handouts in bills of their own exposed the proposed benefit to more debate and discussion.  D.C. doesn’t like the rest of us seeing what they are doing.  They think they know better than we do what’s best for us.  Consequently, when people question them, they consider that an insult and a waste of their time.

Of course, when a benefit is hidden in the tax code as a refundable tax credit, those receiving the benefit have to file a tax return in order to get it.  As is the case with almost everything created by the bureaucrats regarding income tax returns, the required forms and schedules can be complicated and very difficult to understand and complete.

As a result, some may decide that claiming the benefit isn’t worth the time an effort required to get it.  Many others who do try to get it make mistakes and find themselves being harassed by the IRS.

The income/payroll tax system is hopelessly corrupt.  It provides the DC elites with a way to control us and with a way to raise enormous amounts of money.  Simply threatening to tax an industry more consistently leads to that industry making huge donations trying to stave off the tax increases.

Why would D.C. willingly give up this almost unlimited source of donations?  They won’t.  The only way that they will is if the rest of us demand it!

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?
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.

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!
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.”
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!

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