INCOME TAX EVASION- THE REASON SOCIAL SECURITY AND MEDICARE ARE GOING BROKE
In April of 2021, Charles Rettig, former IRS Commissioner, admitted what everyone paying attention already knew--there is at least $1 trillion of income tax that is illegally evaded each year. That’s $1 trillion a year that is legally owed, but never collected.
Unsurprisingly, the reaction outside of D.C. was more resignation than outrage. Many have commented that they feel like they’re paying more than they should, and wish that they could find a way to pay less in federal income taxes even if they have to resort to less than legal means to do it.
D.C.knows that having to cut back government programs like Social Security will create a massive amount of outrage at them.
Their solution is not to “fix” the problem but to hide it by borrowing more money by selling government pledges (securities).
Decades of low interest rates have lured D.C. into thinking that borrowed money is essentially free. But that idea is being proven false by the recent rapid and dramatic increases in interest rates.
Moneywise provided the following data:
- America’s gross national debt hit an eye-watering $33 trillion for the first time in September — mere months after eclipsing the $32 trillion mark earlier in the year.
- In the current fiscal year through the end of September, the Treasury has shelled out $879.3 billion in interest on its debt securities, while the Department of Defense’s budget for military programs totaled just $775.9 billion in the same period.
- Michael A. Peterson, CEO of the Peter G. Peterson Foundation, said, “With more than $10 trillion of interest costs over the next decade, this compounding fiscal cycle will only continue to do damage to our kids and grandkids.”
All but the totally dimwitted can see that if the government continues to fund itself and the interest on the federal debt with borrowed money, the day will come when interest on the national debt will consume 100% of the federal budget. If interest rates continue to rise, that day will come sooner than later.
INCOME TAX EVASION AND SOCIAL SECURITY/MEDICARE
One impact of federal income tax evasion is largely ignored--the impact on the Social Security Trust Fund.
The 2023 Social Security Trustees Report reported:
- Social Security’s cost exceeded income by $22.1 billion.
- Social Security will be unable to pay 100% of benefits after 2033.
- Medicare in-patient hospital and post-acute care costs exceeded income by $53.9 billion and Medicare will have to stop paying full benefits after 2031.
Not reporting income and exaggerating deductions are ways most of the income tax evaders reduce their taxable income.
In order to have $1 trillion worth of tax evasion, you had to have at least $10 trillion of taxable income that is escaping taxation—assuming an effective federal income tax rate of 10%.
If that $10 trillion was reported as taxable income, $10 trillion times 15.3% (7.65% Employee + 7.65% Employer) equals an additional $1.53 trillion for the Social Security Trust Fund. If that money was coming into the Trust Fund, that would eliminate the current deficits and ensure the solvency of the Trust Fund into the future.
CONCLUSION
It’s easy to see that eliminating or greatly reducing federal tax evasion would eliminate or greatly reduce the current shortfall in Social Security funding. So, the question for DC is how to best accomplish that. Unfortunately, DC’s “solution” is both incredibly expensive, oppressive and ineffective.
Evaders don’t mark their federal income tax return—EVADER OF INCOME TAX. Quite the contrary. They do everything they possibly can to mask their evasion and make their returns look legitimate.
Under DC’s plan, the IRS will have to aggressively audit 100% of taxpayers to locate the 15% to 20% of taxpayers who are evading their taxes. Even then, the IRS auditors are unlikely to uncover it all.
In the name of catching evaders, DC will insist on probing deeper and deeper into everyone’s personal business. They’ll want to know more and more about the financial dealings of all Americans.
Do you want the IRS knowing:
- How much is deposited in your bank accounts each month?
- Where or to whom the deposited money is paid?
- All of your credit card records?
- How any cash you withdrew from your accounts was spent?
- If you received gifts from your family or payments from friends for their share of a meal then you have to prove the money received is not income?
- An inventory of any safe deposit box or safe that you have?
All of the above will help the IRS find “federal income tax evaders”—they say.
We know that a country where the government believes that it is entitled to know that much about you is a country of subjects not citizens. It is what so many have toiled and even died to prevent but D.C. desperately wants this control.
DC is ignoring the one real solution that allows us to remain citizens and not subjects, the FAIRtax. The FAIRtax is simple, non-invasive, but most of all, IT WORKS!
While there will be some people who will find a way to evade the FAIRtax, the FAIRtax will greatly reduce federal tax evasion.
Here is why:
- Over 90% of retail sales are made by less than 10% of sellers—think Amazon, Walmart, Target, etc.
- To have a 10% overall evasion rate on retail sales, the other 90% of retailers will have to evade at 100%.
- Sellers of retail services will collect the FAIRtax as they provide the services.
- All sellers of retail services will use a resale permit to acquire any goods or services needed to provide their services.
- The states will develop models to find service providers who are not collecting the FAIRtax.
- The states will collect the FAIRtax and use the same technology they use for state sales taxes that has resulted in an evasion rate of less than 5%.
The FAIRtax will ensure the future solvency of Social Security in two primary ways:
- Greatly reducing illegal evasion
- Extending the tax base from just those working for a paycheck to everyone whose spending exceeds their poverty level
THE SOLUTION—PASS THE FAIRTAX!
If you don’t like the idea of the IRS and D.C. requiring you to reveal more and more of your private financial data and changing us from citizens to subjects, you should be helping to pass the FAIRtax.
- Under the FAIRtax, there are no more tax returns. You no longer have to disclose your personal financial information to the government.
- Banks and other financial institutions no longer have to tell the government about the dividends and interest you received, or about how much you made trading stocks, bonds or other capital assets.
- There is no need for the government to know anything about your IRA because you won’t need an IRA. The FAIRtax lets everyone save for their retirement tax free.
- And of course, if the government doesn’t have your confidential financial data, they can’t leak it.
In addition to solving the confidentiality problem, the FAIRtax lets business owners concentrate on making their business more profitable and beneficial for their shareholders and employees.
President Biden and Congress, pass the FAIRtax and:
- Do the right thing for the people of America and fix the broken income/payroll tax system!
- Go down in history as the ones who freed all present and future Americans from the tyranny of the income/payroll tax system.
- Ensure that there can be no more leaks of our confidential information.
- Transfer power back to the American people over how much tax they pay!
The FAIRtax transfers power from Congress and the bureaucrats to the people. We, not D.C., decide how much federal tax we pay.
There is no IRS—the states collect the FAIRtax.
Only retail businesses will have to collect the FAIRtax and remit it to the government.
Since less than 10% of the retailers account for 90% of retail purchases, there will be much less opportunity for evasion.
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.
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!
Join us and TAKE BACK CONTROL OF OUR COUNTRY AND OUR LIVES—NOT WITH BULLETS BUT WITH THE ELIMINATION OF ONE OF THE BIGGEST THREATS TO OUR LIBERTY AND ECONOMIC PROSPERITY—THE INCOME/PAYROLL TAX.
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.”
WHAT CAN EACH OF US DO?
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!
TAKE BACK CONTROL! Help us PASS THE FAIRTAX!
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
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. It’s an investment in your and your family’s future.