December 20, 2014

FINALLY: We agree with the IRS | FairTax(R) Friday #TCOT #SGP #MIGOP #MIGOV

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Finally: We Agree With The IRS

"The tax code is a monstrosity and there's only one thing to do with it. Scrap it, kill it, drive a stake through its heart, bury it and hope it never rises again to terrorize the American people." - Steve Forbes

Ready for some good news?

Yesterday, IRS Commissioner John Koskinen warned of draconian measures the agency will have to take in order to manage recent budget cuts totaling $346 million. Koskinen hinted at a range of escalating options from employee furloughs to suspended overtime and hiring freezes. And then he said the agency might have to shut down for an unstated period of time.

According to Politico, "the agency estimates each closed day would save $29 million." Let's see – there are 52 weeks in a year, 5 days in a week at $29 million saved per day, minus 10 federal holidays, for a total savings of… Holy Cow – shut it down! After all, poor Commissioner Koskinen has already said there is nothing more he can cut.

Really sir. Did you think about that when you erroneously paid out $6 billion in child tax credit payments in 2013? How about when your agency wrongly paid $132 billion in earned income tax credits between 2003 to 2012? Yes, Congress cut $350 million, but that's just a drop in the bucket considering the IRS' $10.9 billion budget.

The bigger questions to every single member of Congress must be:

  • How can you continue to defend an agency that magically "lost" over 30,000 emails that were the subject of a major oversight investigation related to the IRS political targeting of conservative non-profits?

  • How can you continue perpetuating an agency that operates as a political retribution hammer?

  • How can you stand with an agency that acts with complete and total impunity while literally terrorizing your constituents – the very taxpayers who must fund its unethical, illegal and incompetent actions?

  • How can you defend an agency that, despite its heavy-handed methods, is seeing a tax gap between what should have been collected in tax and what was actually collected that has doubled in the past six years and was estimated at $500 billion for 2013 when there is a clear alternative - the FairTax?

So Commissioner Koskinen, hard as you try, it's very doubtful you are going to get much sympathy from the American people. Instead, they support the FairTax® Plan. The same plan that Congress has in its hands that is ready to immediately replace your agency.

And Commissioner Koskinen, the FairTax is the only tax replacement plan that disbands, defunds and eliminates the IRS. It is simple and transparent, generates desperately needed jobs and economic growth, and represents the largest transfer of power to We the People since the writing of the Constitution.

And instead of 74,000+ pages of garbled tax code written by Washington's finest self-serving special interests, the FairTax plan tops out at only 131 pages.

So please Commissioner, you have the support of the American people to take your agency and the 100 years of horror it has caused the American people and Shut. It. Down! They will forever thank you.

AFFT® Statement of Guiding Principles

Jim Bennett, AFFT board member from New Jersey, chairs the AFFT Board of Director's Credentials, Rules, Organization and Structure Committee (CORS). After the grassroots assumed governance of AFFT, CORS began working on a formal code of conduct for AFFT and the FairTax campaign. Over several months, they reviewed other non-profit organization's codes and solicited input from committee members, board members and the executive committee. They then drafted a document, which resulted in a new AFFT Statement of Guiding Principles (Statement).

The AFFT executive committee approved the Statement this week and we are pleased to share it with you. You may read and download it here:

Finally, this weekend many will begin their holiday travels and festivities. May we all take time to slow down and enjoy our friends and family, may our hearts be filled with joy and peace, and may the blessings of the holiday stay with us throughout the coming year.

Merry Christmas, Happy Hanukkah, Happy Holidays and Happy New Year!

Cindy Canevaro

Executive Director

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The FairTax – The Best Gift Of All!

The FairTax is the only tax replacement plan that will generate jobs, stimulate the economy and eliminate the IRS. That's a gift worth giving! So why not buy an AFFT membership for everyone on your shopping list. For as little as $5 per person, you can sponsor someone for AFFT membership. Just click here or go to and click on the membership button.

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The FairTax In The Media

The IRS Must Be Put Down Like a Rabid DogThe Blaze

…While political abuse of the taxpayer is a felony, economic abuse of the taxpayer is statutory. Thank the Congress for that...

These four problems—Offshore money, costs of compliance, underground economy and embedded costs—all remain in place when we nibble around the edges of the current code. All go away if we abolish the code and tax consumption rather than income.

The FairTax solves all of the above. It is a universal sales tax levied at the checkout counter on the purchase of new goods and services for personal use. There is no tax on used goods, since nothing should be taxed more than once…

Finally, the IRS will be put down like a rabid dog. No agency of government should have the power to abuse our personal information for political gain, which the IRS has proven its willing to do.

MGE Dental Clients Briefed On How FairTax Will Eliminate Federal Taxes Strangling Their GrowthNews Tribune

MGE Management Experts Dental Clients from across America gathered in August to hear AFFT (Americans For Fair Taxation®) Chairman and President, Steve Hayes, discuss the current state of the US economy and how FairTax® H.R.25 / S. 122, "The FairTax Act of 2013" will rid them of income and corporate taxes that are strangling their growth and the economic growth of their communities…

As reported by Chris Matthews in the September 8, 2014 issue of Fortune, a new survey from Harvard Business School shows a frightening picture for the health of small business in America and its competitiveness. They questioned thousands of Harvard alumni to get a sense of what business leaders feel is holding the economy back…

"The Harvard Survey aligns with own research and what our supporters who own small businesses tell us every day," said Hayes.

"If the FairTax becomes law small businesses like ours will thrive and we will finally be able to give our employees much deserved raises. They will receive their entire paycheck and can determine for themselves when and how much to purchase and pay taxes on. Equally important is that corporations like Burger King will stay in the U.S. and the trillions of offshore dollars could come home," said Luis Colon, CEO MGE Management Experts and host of the event.

Chairman's Corner

Want inside information on FairTax strategy? Read the Chairman's Report!

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FairTax Fact

The FairTax, unlike a flat income tax, eliminates the IRS both symbolically and literally. For an orderly end to the income tax system, the IRS is phased out within 3 years of the effective date of the FairTax, H.R. 25/S. 122.

Featured Paper

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If everyone knew all there is to know, they would not do half the things they do, including myself, therefore I must foregive them, including myself.

December 14, 2014

Must Read: D.C. Special Legislative Report | FairTax(R) Friday #tcot #SGP

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Special Legislative Report - December 2014

To read this report as a PDF with additional graphics, click here.

As we noted in last week's FairTax® Friday, we had an aggressive week of meetings in Washington, D.C. – meeting with Members of the House and Senate and key senior committee staff. The meetings were both productive and instructive regarding how the 114th Congress may be approaching near-term tax reform.

We found a general excitement in the halls and offices as the 113th Congress comes to a close and the 114th prepares for the opening gavel. It was clear that Members believe that the mid-term changes will lead to a resumption of more normal operations, which have been stalled for several years.

Newly-elected members are locating offices, retiring members are setting up K Street digs and Washington's elite are hosting farewell and holiday receptions, which is where deals are being made, votes are being bartered and power is being solidified. Yes, the mid-term elections brought significant change but rest assured, the power elite will always try to protect the status quo - something we must not allow to happen.

To refresh, we met with:

  • Congressman Paul Ryan (WI-1), 114th Chairman, Ways & Means Committee
  • Congressman Kevin Brady (TX-8), Ranking Member, Ways & Means Committee, Co-sponsor H.R. 25
  • Congresswoman Lynn Jenkins (KS-2), Member, Ways & Means Committee, Co-sponsor H.R. 25
  • Congressman Rob Woodall (GA-7), Sponsor H.R. 25
  • Congressman Jim Bridenstine (OK-1), Co-sponsor H.R. 25
  • Congressman Paul Broun (GA-10 retiring), Co-sponsor H.R. 25
  • Senator Mike Enzi (WY)
  • Chief Tax Counsel, Ways & Means Committee
  • Executive Director, 113th Joint Economic Committee
  • Director of Economic Policy, 113th Joint Economic Committee
  • Senior Economist, 113th Joint Economic Committee
  • David Burton, Senior Economic Fellow, Heritage Foundation Co-author H.R. 25
  • Dan Mastromarco, AFFT Trustee, Co-author H.R. 25
  • Dr. Laurence J. Kotlikoff, Professor of Economics, Boston University and Author, FairTax economic studies

Across all of our meetings, there were several key themes that emerged. These themes focused on the importance of tax reform, an essential change to dynamic scoring and the importance of increasing the effectiveness of our grassroots efforts.

We found:

  • Tax reform continues to be on everyone's discussion card.It is clear that tax reform will be a priority agenda item in the broader 114th Congress and the House Ways and Means Committee.
  • At least in the early part of the 114th, it appears that tax reform will be incremental versus bold and sweeping. This strategy, if it holds, would acknowledge the differences and difficulties between the majority party in the House and Senate, and the executive branch.
  • The general principle of a national consumption tax seems to be gaining broader acceptance across the political spectrum. The challenge remains gaining non-partisan consensus that a single rate national consumption tax cannot co-exist with an income tax, and the FairTax must be the preferred delivery vehicle.
  • The FairTax continues to be favorably viewed. Our challenge is to fully identify those Members who are supportive of the FairTax but who have not made public their private support. It is vital that we work to further educate them and provide them with the necessary encouragement to make public their support of the FairTax Plan.
  • It was considered essential that the FairTax campaign have significant numbers of paid members in targeted districts where we are trying to exert influence.
  • The recommendation continues to be that AFFT needs to increase our paid membership as a demonstration of the growing depth and breadth of citizen support.
  • There was significant interest in the negative impact the growing evasion problem will have on the current income tax code and how the FairTax would effectively address this problem. In follow-up, recent studies that were shared verbally with Members and staff to document the magnitude of the problem will be sent to key staff.
  • Congressman Ryan is very eager to ensure that dynamic scoring (he calls it "accurate scoring") will be used in the evaluation of all tax reform plans (see below for a further explanation as to why this is so important to the FairTax campaign). According to recent media reports, the ranking member of the Senate Finance Committee (and expected Chairman in the 114th) Senator Orrin Hatch (UT), also enthusiastically supports the use of dynamic scoring.
  • It was strongly suggested that H.R. 25 must be scored again by the Joint Committee on Taxation (JCT) - this time using dynamic scoring - and one Member enthusiastically offered to lead the charge in getting this re-score underway.
  • It was repeatedly recommended that AFFT have key representative(s) in Washington at least one week per month, every month in 2015.

As a result of what we learned and the recommendations we heard, our immediate plan is to return to Washington for one week in mid-January, mid-February and mid-March.

Our goals will be to:

  • Introduce the FairTax to the newly elected Members of the House and Senate.
  • Visit every 114th co-sponsor of HR 25 and S 122.
  • Answer questions and concerns from Members who are favorably inclined towards the FairTax but who have not yet decided to publicly support it.
  • Identify areas of potential bi-partisan agreement on consumption taxes, scoring, elimination of the IRS etc., and how the FairTax benefits all Americans.
  • Establish trusted relationships with more key Members, staff and committee representatives.
  • Provide Members and staff with in-depth briefings and analysis, and become their "go to" expert on the FairTax.
  • Develop relationships with, educate and serve as a resource to senior tax and economic fellows at key public policy organizations in the greater Washington area.
  • Provide the FairTax voice at Washington-based tax reform coalitions.
  • Begin developing relationships with Washington area political, tax and economic journalists and bloggers.

These actions will be an interim measure while we continue our Club 535 fundraising that will fund a full-time Washington, D.C. FairTax office.

Since the Budget Act of 1974, the Joint Committee on Taxation (JCT) has the responsibility for scoring most revenue-related legislation, including tax reform legislation. The purpose of scoring is to predict the amount of money either raised or lost by the proposed tax legislation. The Congressional Budget Office (CBO) also provides scoring but generally does so for more limited revenue-affecting legislation like import tariffs.

The JCT consists of five members from the Senate Finance Committee and five members from the House Committee on Ways and Means.

The JCT Chairman rotates between the Senate and the House each Congressional term. In the 113th Congress, Senator Wyden (OR) chaired the JCT. In the first session of the 114th Congress, beginning in January 2015, the JCT will have six Republican members and four Democrat members, and will be chaired by Congressman Paul Ryan (WI-1). In the second session, beginning in 2016, the 114th Senate Finance Committee Chairman, Senator Orin Hatch (UT), will chair it.

By a majority vote, the JCT selects the chief of staff who then selects non-career staff. Career staff serve at the pleasure of the chairman and chief of staff and can be replaced at any time. The majority of the JCT will then direct the procedures used by the JCT staff in scoring legislation. Senator Hatch and Congressman Ryan have announced that they will insist that the JCT use dynamic, or as Congressman Ryan says, "Accurate Scoring."

According to the JCT's website (,

"The starting point for a revenue estimate prepared by the Joint Committee staff is the Congressional Budget Office ("CBO") 10-year projection of Federal receipts, referred to as the "revenue baseline." The revenue baseline serves as the benchmark for measuring the effects of proposed tax law changes. The baseline assumes that present law remains unchanged during the 10-year budget period. Thus, the revenue baseline is an estimate of the Federal revenues that will be collected over the next 10 years in the absence of statutory changes. In providing conventional estimates, the Joint Committee staff assumes that a proposal will not change total income and therefore holds Gross National Product ("GNP") fixed."

Static scoring assumes that tax cuts will have no change on the economic behavior of affected individuals and no impact on economic growth. For example, static scoring assumes if $100 is taxed at 50% (producing $50 in revenue), and the government lowers the tax rate to 25% (now producing $25 in governmental revenue with a $25 revenue loss), the lower tax rate won't encourage anyone to behave any differently than they currently do.

Dynamic scoring tries to estimate the changes tax cuts have on economic behavior. For example, dynamic scoring assumes that if a 50% tax on $100 produces $50 in revenue, then lowering the tax rate to 25% will produce $25 in revenue, as static scoring predicts, and predicts that individuals will work more (if it's an income tax cut) or realize more capital gains (if it's a capital gains tax cut, etc.) because they will get to keep more of their money. This changed behavior will produce an extra $100, for example, which is also taxed at $25, resulting in a total of $50 in revenue, and no loss for the government.

The logic behind static scoring reminds us of the story once told by a Member of the Senate Finance Committee in the mid-'80s during another series of tax reform debates. Late one night the Senator, as a joke, asked the JCT to prepare a revenue estimate of all income over $250,000 per year if it was taxed at 100%. To his astonishment, the next morning the JCT sent over an estimate of how much additional revenue this would produce. The Senator was stunned that anyone would think that people would continue to work as hard when 100% of their income was withheld for taxes.

Economic Effects of The FairTax®

When static scoring is used to project the income produced by the FairTax (as was done in earlier scoring models on the FairTax prepared by the JCT and most recently in 2014), it does not take into account any of the economic benefits that will be produced by the FairTax Plan. More important, static scoring requires a higher FairTax rate to produce the same income as the present income tax code.

Dynamic scoring accounts for these variables and places the FairTax Plan on a much more level playing field with other tax reform measures that are being considered. All reform measures, however, can only be reviewed properly if all other assumptions, e.g. evasion etc., are properly stated and counted.

When the FairTax is properly scored using the dynamic scoring methodology, we are confident the contrast between the FairTax and the present income tax will dramatically reflect how the FairTax will:

  • Increase the rate of economic growth;
  • Increase U.S. job growth;
  • Increase federal revenues;
  • Reduce evasion; and
  • Provide all Americans with simple and fair taxation.

Our meetings this past week would not have been possible without your support. We thank you and ask you for your continued support. Now more than ever, it is vital that the FairTax have a steady and strong presence in the nation's capital. Our campaign relies entirely upon your generosity – to have that presence we need your continued support.

We need to prepare now for our return in January. While you are preparing your end of year donations, please consider an extra gift to Americans For Fair Taxation®. Whatever you can afford, $5, $10, $25, $50, $100, $500 or more, will be most appreciated.

In humble gratitude,

Cindy Canevaro

Executive Director

Steve Hayes

Chairman and President

Americans For Fair Taxation®
P.O. Box 27487
Houston, Texas 77227-7487
(800)-FAIRTAX (324-7829)

Americans For Fair Taxation® is a 501(c)(4) non-profit organization. One provision in the 74,000+ pages of the federal tax code makes investments in your non-profit FairTax organization non-deductible.

This email was sent to by | P.O. Box 27487 | Houston | TX | 77227-7487

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If everyone knew all there is to know, they would not do half the things they do, including myself, therefore I must foregive them, including myself.

December 12, 2014

W/ #MI House gas tax proposal, Schools still increase funding for 4 yrs #migov #MEA #michigan #migop

State funding for public schools is projected to increase by $2.5 billion over the next eight years, even if a House GOP plan is adopted that would shift some sales tax revenue from schools to roads.

If everyone knew all there is to know, they would not do half the things they do, including myself, therefore I must foregive them, including myself.