The Grassroots Corner November 27th, 2023

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  • Source: FAIRtax
  • 11/27/2023

How to make people angry - and demand the FAIRtax


Taxation is not yet an issue that upsets most people. We in the FAIRtax movement have been trying for decades to motivate people to rise up and demand an end to the income tax. We've documented abuses by the IRS. We've pointed out how intrusive, unfair, and complicated the income tax is. We've shown how the income tax hurts the economy and drives jobs overseas. We've even shown how the IRS has failed to safeguard our most sensitive personal data. Nevertheless, the electorate remains largely apathetic.  

That may be about to change.

Most people are unaware that two federal courts, so far, have upheld Congress’ right to:
  1. Tax you on income you never received,
  2. Tax you on income from past years that you rightly thought was tax-free,
  3. Tax you on a company over which you had no control, and
  4. Tax you for periods when you never owned its stock in a company,
… all at the same time.

If the United States Supreme Court affirms those rulings, and the IRS starts collecting tax on money people don’t have, this event could push enough people to revolt against the income tax and start demanding the FAIRtax.

Moore vs. United States is currently pending in the United States Supreme Court. See Docket 22-800. Here are the facts (from the petition asking the Supreme Court to hear the case). In 2006, Charles and Kathleen Moore invested money to help launch an overseas company to empower India's underserved rural farmers. Farmers in India's most impoverished regions lacked access to even the most basic tools available in American hardware stores. A friend of the Moores founded an India-based company to import, manufacture, and distribute affordable farming equipment. The Moores put up $40,000 and received about 13% of the company's shares.

The company was successful from the start. True to its original business plan, the company reinvested all its earnings to grow the business. By 2017, the company employed over 350 representatives in 14 regional offices, serving 2,500 local dealers. Charles Moore visited India several times and was impressed with the difference that the company was making in the lives of India’s rural poor.

The Moores never received any distributions, dividends, or other payments from the company. As minority shareholders without any role in the company’s management, they had no ability to force the company to issue a dividend. 

But none of that mattered to the IRS. The Moores received their tax bill in 2018, in which the IRS said the Moores owed income tax under the Mandatory Repatriation Tax going back to 2006 on “income” of $132,512. The bill demanded payment of $14,729. The so-called “income,” which the Moores never saw, was the company’s earnings for each year from 2006 through 2017, proportional to the Moore’s ownership stake in 2017.

The Mandatory Repatriation Act of 2017 targets U.S. shareholders who own 10% or more of a foreign company primarily controlled by “U.S. Persons.” Before this act, shareholders usually paid tax when a foreign company distributed its earnings. Now, the act deems earnings going back to 1986 to be “earned” in 2017 and allows the IRS to send shareholders a bill for years they had nothing to do with the company. 

It gets worse. The Mandatory Repatriation Act is a one-time tax on U.S. companies to partially fund the shift of their income tax from a worldwide system to a system that taxes only income earned in the United States. But the tax is one-time only for U.S. companies, not one-time for individuals like the Moores.

Again, as minority stakeholders, the Moores had no say in how the company in India is run. Since the company reinvested all of its earnings, the Moores have not received a dime in dividends. If Congress can get away with taxing them on money they haven’t received, taxing them on money that had been tax-free in the past, and yes, even potentially taxing them for years when they never owned stock in the company, what do you think they can do to you? 

Just imagine that Congress could pass a law declaring that you owe income taxes on the appreciation in the value of the home you live in that accumulated over decades. You could be forced to sell your home to pay the taxes.

Or if you own stocks, bonds, rental property, precious metals, or any other capital asset, you could owe taxes on the appreciation in value of those assets even though you haven’t sold them and don’t have the money in hand.

If Congress can tax unrealized income, there’s no limit on what “income” Congress could attribute to you. Congress could bankrupt you on a whim.

The Moore case came to the U.S. Supreme Court from the U.S. District Court for the Western District of Washington and the U.S. Circuit Court of Appeals for the Ninth Circuit in San Francisco. Both of those courts sided with the IRS. Predicting what the Supreme Court will do with this case is difficult. 

Our Toronto attorney, John Richardson, thinks the Obama appointees will sustain the Ninth Circuit ruling. Alito and Thomas are likely to strike the Ninth Circuit down. Gorsuch will get into a discussion about exporting the tax code, and he will likely also strike it down. The newest appointees are challenging to read. John is unsure about Kavanaugh. John recently submitted a brief in this case to the U.S. Supreme Court for a group named Stop Extraterritorial American Taxation. In that brief, he argued against the constitutionality of the Mandatory Repatriation Act.

The FAIRtax, to state the obvious, is the solution. With the FAIRtax, income would disappear as a basis for taxation, and the Moores could continue their good work without looking over their shoulders to see where the IRS is lurking. 

So, what can you do when you talk to your local Rotary, Kiwanis, or Lions? You might get your audience’s attention by directing them to the extraordinary powers of Congress that two federal courts have upheld. Talk about Moore, and then use the FAIRtax as a hammer. Urge your audience to go to and scroll down to "Get Updates." Remind your listeners that we do not sell the list, so they do not have to worry about spam. Then, if they have time, contact their representatives, write letters to the editor, talk to their friends, neighbors, family, and colleagues, and organize a group. If the hosts allow you, have pocket cards to pass out. Pocket cards are available to order at

I would love to hear from you if you follow up on Moore.
We need more of you to send in pictures and news. If you have something to share, please send your material to me,, (908) 578-4975, or fax (908) 598-2888. When others see your activity, they are inspired, and the process snowballs. When the process snowballs, Congress Members, Senators, and even the President start to listen.
Jim Bennett
AFFT Grassroots Coordinator & Secretary


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