The Chairman’s Report May 24th, 2024

  • by:
  • Source: FAIRtax
  • 05/24/2024

The FAIRtax and the National Debt 

Many people understand that the FAIRtax, a national retail sales tax on new retail goods and services, replaces the income/payroll tax system as the way that the federal government obtains the funds it needs to operate.

There is nearly universal agreement among the nation’s economists that replacing the federal income/payroll tax system with the FAIRtax would result in a thriving economy with unprecedented economic growth.

The logic is very clear, as the economy grows and more capital is available, the rapid increase in productivity will create more income for people.  As a result, consumption of new retail goods and services will increase leading to much higher US Treasury collections.  The increased funds could be applied to start reducing the $34,623,521,250 U.S. national debt.

Unfortunately, the DC elites have shown a stunning lack of concern for the nation’s burgeoning debt.  Consequently, it is exceedingly likely that should federal revenues rise, the elites would just increase  spending, continue to borrow more and more money and keep digging a deeper and deeper hole.

The DC elites and their minions are confident that ordinary people—those who aren’t in DC and who don’t work for a university—aren’t smart enough to understand how the growing national debt directly harms each of us.

In an article entitled, The More the Feds ‘Borrow,’ the More We Pay for Mortgages, Credit Cards, Student Loans, by E.J. Antoni, a public finance economist at the Heritage Foundation, sets out the real impact of the massive federal debt on each of us. 

Here are some of his observations:
  • The Biden administration and  Congress racked up $6.8 trillion of additional debt which was paid by the Federal Reserve creating the money. 
  • The result, the highest inflation rate in 40 years. 
  • When the Federal Reserve had to stop printing money to reduce inflation, the Treasury had to borrow from the public.
  • Interest rates on Treasury bills, notes, and bonds increased--often more than four times the rate they were four years ago. 
  • When there is a surge in demand for loanable funds--interest rates rise.
  • When we apply at a bank for a mortgage, or online for a credit card, or at a dealership for an auto loan, we are competing with the U.S. Treasury to borrow money. 
  • Because the Treasury instruments are essentially guaranteed, our loans will have more risk of default and be priced higher.
  • The result has been a tripling of mortgage interest rates for many borrowers, record high interest rates on credit cards, and the highest student and auto loan interest rates in more than a decade.
  • Americans are paying more than $240 billion annually just in credit card interest, before they put a dime toward paying down their balances. For the first time ever, interest on non-mortgage debt has caught up to the interest families are paying on their mortgages.
  • Higher interest rates have increased the monthly payment on a median price home by over $1,000 compared to three years ago. That’s an extra $12,000 each year—for 30 years—for the same house.

The fiscal year 2022 budget was $6.01 trillion and only $4.2 trillion was raised from all federal taxes.  The remaining $1.8 trillion had to be borrowed.  If we were sitting around our kitchen table and saw that we outspent our earnings by nearly 50%, we would instinctively know that if we didn’t reduce our spending to match our earnings, we would go bankrupt.

Reducing household spending by that much would no doubt be painful.  The family would likely have to forgo vacations, purchase fewer clothes, eat out less and drive less expensive cars.  While downgrading one’s lifestyle would certainly involve some sacrifice, the alternative would be losing it all.

In the last days of the Roman empire, the Roman emperors knew that the only way to remain in power was to distract the Roman citizens from what was happening to them by providing them circuses, gladiator fights and food.

It’s possible that some of the elites do indeed realize that ignoring the debt will eventually lead to a widespread economic disaster if not confronted and handled soon.  However, they have a problem--mandatory entitlement programs, such as Social Security, Medicare, and the Supplemental Nutrition Assistance Program, which account for about 65% of the federal budget.

Balancing the 2022 US budget would require a 33% reduction in spending.  Because we need defense, roads, etc., much of the required spending cuts will have to come from the entitlement programs.  And that presents a real problem for the elites.

The elites know that as long as people continue to receive their benefits from the federal government, they will not be subject to scrutiny.  As long as the money keeps flowing in, the people will tolerate the elites’ gross ineptitude.

However, if people receiving Social Security and other federal payments find out that their benefits are going to be cut by 33%, there will such an uproar that the elites and Congress know that they will be exposed and thrown out of power—if not worse.

There is an elegant solution to this problem.  Pass the FAIRtax:
  • The economy and tax revenues will grow much more rapidly.  
  • Budget cuts are still required but will not need to be as painful.
  • Interest costs on the National Debt will come down and again be less than we pay for defense spending.
  • Rates for mortgages, car loans and credit card loans will quickly go down.
  • All Americans will be more prosperous and confident about their future.
  • Social Security and Medicare will be fully solvent, and no senior will worry about having their retirement income reduced because of the inability to finance the National Debt.
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. 


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 let reject the entire bill because it has a perceived “flaw” that can be addressed.  

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. 
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