June 27, 2010

Fairtax Friday | These are the Times that Try Men's Souls



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Weekly Feature

These are the Times that Try Men's Souls

This is part of what was written by American patriot Thomas Paine and read to the Continental Army two days before the pivotal battle of Trenton that turned the tide of the Revolutionary War in our favor:

"These are the times that try men's souls: The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of his country; but he that stands by it now, deserves the love and thanks of man and woman.

Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph."

While your FairTax campaign is working its heart out to bring us closer to national consensus and strength toward enactment of the FairTax, the disaster in the Gulf of Mexico continues to work against us.

The nation has become so understandably transfixed by the unfolding catastrophe on our southern coastline that the national FairTax campaign has started to sputter for lack of funds. Our work continues, nonetheless, because passage of the FairTax is so important to the future of our nation---despite the disaster in the Gulf of Mexico.

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FairTax Fireworks Slated for July 4th

At 1:30 p.m. (eastern) the very first FairTax national TV broadcast will air on the Fox Business Channel. Made possible with private investments for production costs and grassroots donations to buy air time, the FairTax TV show is designed for those Americans who know very little about our issue.

"It's in the middle of the day before we take our families to fireworks shows," said Ken Hoagland, National Victory Campaign Chairman. "Our hope is that every FairTax supporter will spread the word to everyone they know and on websites and in e-mail correspondence. Our campaign must always do more with less so an advertising budget was out of the question," he said. "Instead, we have asked every FairTaxer to act as a kind of 'Paul Revere" and spread the word."

Around The Nation

Grass Roots Freedom Ride for FairTax

This week, the Grass Roots Freedom Ride for FairTax exceeded 5,200 miles - cutting through the middle of the country, from Virginia, west to Missouri and then south to Arkansas. Entering Virginia, the Welcome Center attendant, intrigued by Mike's FairTax pins was wowed by the FairTax bike and the whole FairTax concept. In Culpepper VA, the FairTax Bike participated in the Nite Train Rally. Riding with the Nite Train riders, the FairTax bike visited Montpelier, home to James Madison, remembered as the Father of our Constitution. I think Madison would approve of the checks and balances, simplicity and transparency in our system of taxation.

Also in Virginia, the Freedom Ride picked up some Sons of Liberty Riders (SOLR) from Florida and Virginia. These concerned bikers fully support passage of the FairTax and are organized throughout the country to raise awareness for this important legislation. Later in Springfield Missouri, Tim Woodsome, owner of Cruizin' 66, hosted a FairTax event with TV coverage by CBS along with Jack Edge, who organized the Springfield FairTax team. If it makes the cut, you can find footage at ozarksfirst.com.

Fairtax Webinar for July 2010: 

WHAT: Understanding the FairTax webinar for July 2010

SPECIAL TOPIC: The FT impact on the housing industry.

WHEN: Thursday July 22, 2010

TIME: 8 – 8:45pm Eastern Time 7 – 7:45pm Central, 6 – 6:45 Mountain, 5 – 5:45 Pacific

WHERE: Your home, your Personal Computer

WHY: To provide an interactive forum for people who cannot get to local meetings to learn about the FairTax and to present Special Topics that are frequently misunderstood or not generally discussed. Education is the weapon of the FairTax grassroots organizations and we are Educating the Nation on the web.

Join Marc Manieri, Americans for Fair Taxation Community Coordinator in the Greater Orlando, Florida Area. Into our second year now, Marc's webinars draw national participation from seasoned FairTax supporters as well as those just getting started as a supporter. We help build the knowledge base of those on the front lines as well as those wanting to know what the FairTax is about.

The PowerPoint presentations are available from Marc. When you get your email after the webinar just 'Reply' and it will be sent to you.

To participate it is necessary to pre-register at this web link: https://www2.gotomeeting.com/register/259690458

You will receive a confirmation email with instructions for signing in at the time of the Webinar.

For additional information contact Larry Walters at repeal_16@earthlink.net.

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In The News

IRS May Tax Payments to Gulf Coast Victims
From Associated Press
Published June 22, 2010

NEW ORLEANS — Out-of-work Gulf Coast shrimper Todd Pellegal spent his first $2,500 check from BP quickly, paying off bills and buying groceries for his family.

He never even considered putting some of it away for taxes.

Now he's among the people up and down the Gulf Coast reeling from the oil spill disaster who are surprised — and frustrated — to find out the Internal Revenue Service may take a chunk of the payments BP PLC is providing to help them stay afloat.

Many were already angry about how long the oil giant took to cut the checks. So when they got the money — generally about a few thousand dollars each so far — they spent it fast.

"If they're going to pay you a lump sum, like for a year, then bam, take the taxes out of the check," said Pellegal, of Boothville, La. "But a little bit at a time, they shouldn't."

Accountants have been trying to nail down the implications for thousands of taxpayers after President Barack Obama said BP would create a $20 billion disaster fund and provide another $100 million for oil workers who lose their jobs because of the six-month moratorium on deepwater drilling in the Gulf of Mexico.

Oil has been gushing into the sea since the rig Deepwater Horizon exploded April 20, killing 11 workers and triggering the worst oil spill in U.S. history.

Tax experts said generally all income is taxable under federal law unless specific exemptions are approved by Congress or the Treasury Department — and neither has acted yet on oil spill damage claims.

The IRS would not comment on whether exemptions would be made, citing a policy of not answering questions on specific tax issues. Adding to the confusion, Kenneth Feinberg, who was chosen by President Barack Obama and BP to oversee the Independent Claims Facility, said Friday it hasn't been determined if the payouts will be considered taxable income.

Some tax experts said they expected federal action soon to clarify the situation for Gulf Coast residents and business owners.

"With the experience we've had with tornadoes and hurricanes, they know they need to address this," said John Ams, executive vice president of the Alexandria, Va.-based National Society of Accountants.

It's not the first time the region has dealt with whether disaster money should be taxed.

In the aftermath of Hurricane Katrina, Louisiana and Mississippi residents received federal money to rebuild their homes after many claimed a casualty loss for the damage on the 2005 tax returns.

The IRS initially required people who received the money and took the deduction to add the value of the deduction to their 2007 returns as taxable income. That decision angered many residents, including some who were pushed into a higher tax bracket as a result.

After residents and local leaders protested, Congress in 2008 voted to negate the IRS decision.

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Georgia WTBF-TV, Channel 6—ABC (transcript of recent broadcast)
Channel 6—ABC
Port Huron, May 21

Augusta, GA -- Last week we aired a special piece on the FairTax. With the FairTax you would not have money taken out of your paycheck but instead you would pay based on consumption.

The FairTax would replace the national income tax but you'd still have to pay your regular state tax on top of that.

Pat Van Hooser says the FairTax is fair.

Van Hooser: "The idea behind the FairTax is to raise the same amount of money now."

She says it will force everyone to pay taxes unlike the current system.

Van Hooser: "There are so many in the underground economy and so many that support that unwittingly. if you think about the person that cuts your hair or someone who cleans your house or cuts your grass, they are probably in a cash economy, and while they are very nice people, they are not paying taxes like you and I have to pay taxes, and now it would be fair, we would all have to pay."

Lloyd Newsome, FairTax of Georgia: "Whenever I go to a store and buy groceries, I'll buy beanie weanies. but my boss will go to the store and buy steak and lobster. Since I bought beany weanies, I pay less tax and I still have food on my table. He buys steak and lobster, he pays more taxes because he has the ability to do so. The FairTax is places a tax on your lifestyle not on your basic necessities of life."

Proponents of the FairTax like Lloyd Newsome with the FairTax Organization of Georgia say you'd get money back from the government with a prebate. For example, if you made $20,000 dollars, you'd get 23% that divided equally into 12 monthly payments to offset for expenses like food, water and clothing.

Van Hooser: "Every legal American with a Social Security Number will get the prebate whether you're Bill Gates or Pat Van Hooser or you or anyone else."

Augusta State University (ASU) professor Doctor Craig Albert says he's concerned about the prebate.

Albert: "So on the one hand for tax advocates say it'll help consumers save just by having the FairTax. but on the other hand you also get a prebate. it causes me take to take caution because why are you giving a prebate if its naturally going to help you save anyway."

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Greenspan's Case That US Borrowing Power Will Disappear
From the Wall St. Journal (blog)
Posted: June 18, 2010

Alan Greenspan still occasionally shows up on the global stage to sell a new book or defend his legacy as Fed chairman. He must find it irritating that his predecessor Paul Volcker has become such an important figure in US financial reform. Greenspan's opinions on the matter are almost never aired.

The aging economist argued recently that the US is about to run out of its ability to raise debt at low rates to finance its growing deficits. His disagrees with most economists who worry about the effects of the US debt in a few years, but believe that very low borrowing costs will help American fund its government spending in the meantime.Greenspan's argument is that the US is about to be unpleasantly surprised by the global capital markets. These markets will begin to reject American borrowing because the federal government has no realistic plan to bring down spending and reign-in the national debt.

"The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms," Greenspan said according to Bloomberg. The "very severity of the pending crisis and growing analogies to Greece set the stage for a serious response." Greenspan expects that the price the US will have to pay for new debt could rise quickly to 4%, which would increase debt service by tens of billions of dollars a year. The CBO already forecasts that total federal debt service will be $700 billion at the end of the decade.

Greenspan, like most economists and many members of Congress, believes that rising deficits and debt will be the nation's financial undoing.

The President recently set up a deficit reduction panel with 18 members, co-chaired by former Republican Senator Alan Simpson of Wyoming and former Clinton chief of staff Erskine Bowles of North Carolina. The group is scheduled to give its report in December.

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FairTax makes strongest possible case for reform
From The Times-Herald (Letter to the Editor)
May 30, 2010

Eighty economists have written to Congress and the White House that the FairTax, with $22 million of peer-reviewed research behind it, is the best federal tax system to create economic growth.

By taxing what comes out of the economy--consumption -- instead of what makes the economy grow-- work, savings and investment -- the tax base is dramatically expanded and every worker takes home paychecks free of all federal withholding and payroll taxes.

Foreign investment, estimated in the $10 trillion range, comes, upon enactment, rushing into the American economy creating needed jobs.

The benefits to the nation and every taxpayer are not enough to easily overcome Washington insiders' lucrative self-interest in an income tax system that allows Congress to play politics with the nation's wealth.

The FairTax breaks a lot of "rice bowls" inside Washington. It makes visible the cost of the federal government on every sales receipt, and it shifts tax decisions from Congress to individual citizens through their consumption choices.

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Did You Know?
Origins of the Income Tax

The federal income tax was established in 1913. It actually required an amendment to the United States Constitution to make it legal. Why? Our Founding Fathers believed that taxing individuals on their private income was economic folly. They were right. The absence of an income tax, a tax on productivity, allowed our economy to grow and individuals to prosper for 124 years.

The original income tax legislation affected only individuals earning $4,000 or more per year, at a time when the overwhelming majority of Americans earned far less. The 16th Amendment was eventually ratified and added to the Constitution, and a national income tax was born.

That 16th Amendment was simply worded, the tax return consisted of only one page, and the entire tax code itself consisted of only 14 pages. No one could have imagined the vast impact it would have on the lives of their children, grandchildren, and future generations of Americans.

Since then, the federal income tax system has become so complex that it requires tens of millions of Americans to seek professional help to comply with it, not to mention the enormous, expensive federal bureaucracy required to enforce and administer the tax. The Internal Revenue Service employs more investigative agents than the FBI and the CIA combined, and with 144,000 employees, employs more people than all but the 36 largest corporations in the United States.

In addition to the $10 billion needed to operate the IRS, at least $265 billion (that is $900 for every man, woman, and child in this country) must be added to account for the cost of complying with the tax code. Massive amounts of our national wealth are consumed merely by measuring, tracking, sheltering, documenting, and filing our annual income.
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