Fairtax Power Radio

The presidential candidates have come out in favor of exempting certain kinds of income from taxation.  Both Donald Trump and Kamala Harris favor not taxing tips.  Trump also favors shielding both Social Security benefits and overtime pay from the income tax.This week, AFFT president Steve Hayes joins the FAIRtax Guys to discuss what these positions mean for the FAIRtax.  If not taxing some kinds of income is a popular idea with those who receive that income, imagine how popular the idea of not taxing any income would be.

What is income?  It sounds like a simple question, but when the Internal Revenue Code enters the picture, it gets really complicated really fast.In their weekly look at proposed changes to the tax code, the FAIRtax Guys have run across hundreds of bills that would exempt certain income from taxation or remove that exemption from other kinds of income.  With the FAIRtax, it’s simple.  The FAIRtax applies to the retail purchase of all new goods and services.

Ask 50 different tax preparers what a particular family owes in income tax and you’ll get 49 different answers.  With its ever changing myriads of exemptions, deductions, exclusions and credits, it’s impossible to predict what you’ll owe in income taxes.  But with the FAIRtax, a very simple calculation can determine your tax liability with incredible accuracy.This week, John Gaver joins the FAIRtax Guys to show off a simple calculator he developed that shows exactly what anybody’s tax liability will be under the FAIRtax.

IRS Publication 17 is a comprehensive guide designed to help taxpayers fill out their income tax returns correctly.  In reality, it’s 142 pages detailing why the income tax is a hopelessly complicated mess that needs to be thrown out and replaced with the FAIRtax.It’s also Bob Scarborough’s favorite reading material.  (Yeah, right).  Join the FAIRtax Guys as they delve into the latest version of Publication 17 and expose once again what a tangled mess the Internal Revenue Code really is.

Labor unions were spawned when employers imposed oppressive working conditions on their workers.  The Internal Revenue Code has spawned a union of its own in the National Taxpayers Union.  The NTU keeps an eye on Congress and rates its members on how their votes affect the taxpayers’ pockets.This week, the FAIRtax Guys examine the NTU scores for the 26 Congressional representatives who are current cosponsors of the FAIRtax bill.

Imagine ordering a dish in a restaurant that’s supposed to come with two sides.  But, when your server brings your order, there’s only one.  You’d notice that immediately and insist that she bring your second side.  You want to get everything you paid for.But when you get your paycheck and a big chunk of it is missing, you don’t seem to mind.  You probably don’t even notice that it’s gone.  That’s withholding.  And that goes away with the FAIRtax.

Iowa Senator Joni Ernst has uncovered a dirty little secret—there are thousands of people who work for the IRS who collectively owe millions of dollars in unpaid taxes.  With illegal tax evasion standing at around $1 trillion a year, you’d think that the IRS would at least make sure its own workforce was abiding by the law, but that’s clearly not the case.This week, the FAIRtax Guys go over a letter that Senator Ernst sent to the Commissioner of the IRS demanding action.  Of course, the only way to completely clean up the problem would be to replace the income tax with the FAIRtax and eliminate the IRS entirely.

Kamala Harris has picked up on Donald Trump’s idea of exempting tips from the income tax.    Clearly, both candidates are trying to woo votes from workers in the service industries who rely on tips for their living.  But what happens if you carry that idea even farther and stop taxing income altogether?This week the FAIRtax Guys examine an article published on fairtax.org detailing what happens to the economy if we switch from taxing income to taxing consumption.  Here’s a hint:  The economy takes off like wildfire.

The FAIRtax would represent a seismic shift in the paradigm of how taxes are collected in this country.  Consequently, there are bound to be questions and criticisms regarding how the FAIRtax would work and the impact it would have on the American taxpayer.  Some are honest, some are rooted in a vested interest in keeping the current income tax system.This week, the FAIRtax Guys conclude their journey through Boortz and Linder’s original FAIRtax book by covering some of the questions and objections noted in Chapter 15.

Over the years, the IRS has been described in a number of different ways.  Kind, understanding and co-operative are not on the list.  Instead, you’ll hear words like unreasonable, vicious, malicious, high-handed and vindictive.  Some have even labeled the agency as a criminal enterprise that operates with a flagrant disregard for the law and without regard for basic human decency.This week, the FAIRtax Guys review chapter 14 of the FAIRtax book in which Boortz and Linder detail some of the maddening, frustrating and even tragic encounters people have had with the IRS.

Social Security and Medicare are two incredibly popular Federal programs that millions of seniors have grown to depend on in their retirement years.  There’s only one problem.  Both are going broke and politicians in both parties have been reluctant to make the tough changes necessary to bring them back to solvency.  No one is going to get re-elected by promising to cut benefits or tighten eligibility requirements.Fortunately, chapter 13 of the FAIRtax book has the solution.  Change the funding source from just those people working for a paycheck to everybody who buys things beyond their basic necessities.

Since the FAIRtax was introduced into Congress in 1999, one thing has remained consistent.  Economists from both sides of the aisle have been nearly unanimous in their agreement that a consumption tax like the FAIRtax would be much better for the economy than an income tax.This week, the FAIRtax Guys examine chapter 11 of the FAIRtax book in which Boortz and Linder look at what happens to the American economy on the day the FAIRtax replaces the income tax.  They also take a brief look at chapter 12 which details where opposition to the FAIRtax will come from.

The income tax is ridiculously easy to evade.  The latest estimates say that illegal tax evasion costs the government around $1 trillion a year.  A large part of the evasion problem is the fact that billions of dollars of income goes unreported.  Drug dealers, prostitutes, and those working for cash off the books aren’t subject to withholding and don’t file 1040 forms.  But those people buy things.This week, the FAIRtax Guys dissect chapter 10 of the FAIRtax Book and look at how the FAIRtax finally makes taxpayers out of those who make their living in the underground or offshore economy.

The FAIRtax is unlike any other sales tax on the planet in that it does not tax every dollar someone spends.  How can that be when the tax is included in the retail price of all new goods and services?  Enter the FAIRtax prebate.This week, the FAIRtax Guys discuss the most important chapter in the FAIRtax book—Chapter 9, the prebate.  This amazing feature is what makes the FAIRtax a fair tax by ensuring that no one pays the tax on the purchase of basic necessities.

In the first six chapters of the FAIRtax Book, authors Boortz and Linder cover a variety of problems with the current income tax system.  This includes topics from withholding to how the income tax inflates the prices of all of the goods and services we buy.Beginning with chapter seven, the focus shifts to the FAIRtax.  This week, the FAIRtax Guys explore the origins of the FAIRtax and begin to explain its basic structure.

Prior to 2017, income had to realized before it was taxable.  However, the Tax Cuts and Jobs Act contained a repatriation provision that made certain unrealized income taxable.  The constitutionality of that tax was challenged in court and just recently, the Supreme Court handed down its decision.This week on FAIRtax Power Radio, tax attorney and AFFT president Steve Hayes joins the FAIRtax Guys to break down the decision and discuss what it means for the future of taxation in the United States.

The FAIRtax Guys continue their journey through Boortz and Linder’s original FAIRtax book, published in 2005.This week, they tackle a subject that escapes most people’s attention—the embedded costs of the income tax system that are passed on to consumers in the prices of everything we buy.  We never see them.  They’re not listed on any receipt, but they are there nonetheless.  In fact, a surprisingly high percentage of what we pay for both goods and services today ends up at the IRS.

The FAIRtax book by Neal Boortz and John Linder is the definitive work highlighting the problems with the income tax system and presenting the FAIRtax as the elegantly simple solution to those problems.This week, the FAIRtax Guys use Boortz and Linder’s analysis to explode the myth of corporate taxation.  The myth in question is that shifting some of the tax burden onto rich corporations somehow lightens the load for individuals.  The truth is that individuals pay every penny of a “corporate” tax.

Neal Boortz and John Linder introduced the country to the FAIRtax in 2005 with the publication of their first FAIRtax book.  The FAIRtax Guys are doing an extended series of FAIRtax Power Radio programs going back and using Boortz and Linder’s words to explain what’s wrong with the current income tax system and why the FAIRtax is a much better alternative.In this episode, the Guys look at one of the most evil components of the income tax system—withholding.  It’s a system that not only hides how much tax people actually pay, it makes people unaware of exactly how much money they earn.

In 2005, Neal Boortz and John Linder wrote a fairly short book describing a revolutionary new way to fund the federal government.  This new plan would let everyone bring home their entire paychecks, do away with filing tax returns and hang an “Out of Business” sign on the front door of the Internal Revenue Service.This week, the FAIRtax Guys begin a multi-part series in which they will be going through the FAIRtax book from cover to cover starting with a rather amazing statement from a former Commissioner of Internal Revenue.