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The Treasury Inspector General for Tax Administration released a report on August 30th that revealed that over 1,000,000 taxpayers had their social security numbers stolen over a five-year period in employment-related identity theft.
The thieves, mostly illegal aliens, would steal the Social Security numbers and the identity of the victims in order to get a job. Those wages would be reported by employers each year to the IRS. This activity hurts real taxpayers in one of two ways. The thief would file a tax return under the stolen identity and receive a refund from the IRS for taxes paid during the year by the real taxpayer. Then the taxpayer files the real return and the IRS tells the taxpayer that it has already sent the taxpayer (the thief) a refund. Now the taxpayer has fight to prove to the IRS that it sent the refund to the wrong person and wait months to have the situation resolved and receive any refund that the taxpayer might be entitled to.
The other way that this stolen identity might hurt the taxpayer is that the income earned by the thief would be added to the income earned by the real taxpayer, who would then owe more taxes due to a supposed higher amount of income and a supposed underpayment of taxes. Again, it would take months to get the situation straightened out.
What is particularly galling about these identity thefts is that IRS did not inform the taxpayers who had their identities stolen. They have promised to start telling the victims of new identity thefts in 2017.
Senator Daniel Coats has introduced legislation that would help protect victims of employment-related identity theft. But the real solution to this whole problem is to replace the income tax with the FairTax®. No one would have to report income or file tax returns. Thieves would not be able to steal tax refunds. And the IRS would no longer exist.
While many people believe that changing our tax system from the income tax to the FairTax is unrealistic, we aim to prove that it is viable by enacting the FairTax on the state level. If Georgia can get a FairTax passed in this state, other states will follow. And when we show just how dynamic the FairTax will be in our state, providing us with a growing economy and increased employment, the people will demand the FairTax for the country.
In an effort to streamline our signup process at fairs and other events, we have finally dumped the cumbersome multi-step paper system we were using to gather names and addresses of visitors who were interested in joining us in our efforts to pass the FairTax. We have replaced pencil and paper with tablet PCs which enable us to enter the data automatically.
The electronic system greatly reduces the errors that occur when trying to read paper forms. And it saves a great deal of time over the paper system. The electronic system also enables us to reach out to those who are interested in helping us in our efforts to pass the FairTax.
Hitched your wagon to fallen candidate? Your enthusiasm not so great?
You may be one of those people who supported a candidate who has now disappeared from the scene. You may feel lukewarm about the current field, frustrated that your voice isn’t being heard, and lacking enthusiasm for active participation in the electoral process.
The 2016 free-for-all that unfolded in the Presidential race has surprised many. No fewer than 17 GOP candidates took a shot to be POTUS. An avowed Socialist emerged from the Democratic ranks to become the spear point for young, left wing idealists and a thorn in the side of establishment favorite, Hilary Clinton.
Maybe you pinned your hopes on an individual whose campaign went down in flames or whose performance has disappointed. Maybe you feel indifferent about the remaining candidates in the presidential race. Maybe you’re not too satisfied with the way things are going. If so, you’re not alone. Shortly after President Obama’s January 2016 State of the Union speech, Gallup reported that only 23% of Americans were satisfied with the way things were going. Fully 44% said they were “very dissatisfied.” The coming political fireworks may be even more unsettling.
Maybe it’s time to refocus your attention. How about getting behind a cause that is gaining momentum, won’t disappear after the next election cycle, and can have a direct benefit to you and all other Georgians now and into the future?
In February 2016, Rep. Emory Dunahoo introduced the Georgia FairTax® Act of 2016. For the first time, Georgia has a comprehensive bill that will turbocharge Georgia’s economy by eliminating the Georgia state personal and corporate income tax and replacing it with a 1.5¢ increase in the state sales tax. Georgians for Fair Taxation is working to make this legislation a reality. There’s more support behind this movement than ever before.
Passing this bill would result in bigger paychecks and more jobs right here in Georgia. That will give you more control over your money – how you spend it and how you save it.
Taxes don’t make headlines every day like other short-lived dramas that clutter the media. But they have real impact on you, your children, and every other Georgian now and in the years to come. Georgians for Fair Taxation meets with legislators directly, monitors their support for tax reform, spreads the word both at events and on gafairtax.org, and alerts you and people like you to ways you can really influence how legislation takes shape.
We need your help to keep our efforts moving forward. Please make a donation to Georgians for Fair Taxation today. We’re an all-volunteer, non-profit, organization. We don’t spend money on offices and have no paid staff. We’re in this for you. We’re in this to help people like you take control of their own future and make sure candidates for office know where you stand. Go to gafairtax.org/donate/ and help us keep pushing forward until the politicians get your message and pass the bill.
Thank you for your support!
In a Reuters article on May 2nd, author Susan Cornwell highlighted the Republican Study Committee’s position regarding the IRS. The committee called for the complete elimination of the IRS. Over two-thirds of the Republicans in the House of Representatives are members of the committee. The idea of abolishing the IRS is becoming more popular.
Of course, in order to abolish the IRS, the current tax system would have to be replaced. The article does not go into replacing the tax system, but it does mention that Rob Woodall, Georgia’s Republican representative, has introduced legislation every year since he entered Congress in 2011 to eliminate income taxes and abolish the IRS. It also mentions that his bill has 73 co-sponsors, including the heads of the House tax and budget committees. But the article does not mention that bill is the FairTax® Bill! Let’s hope that future articles will explore the ability of the FairTax Bill to improve our economy and abolish the IRS.
Remember the classic Willie Nelson song? Georgia FairTax advocates were glad to be “on the road again” in October and November, traveling to Moultrie for the Sunbelt Agricultural Expo, to Lawrenceville for a GOP Chili Cook-Off, and will be on our way Bostwick for our debut at the Cotton Gin Festival (delayed a week due to record-breaking rainfall) on November 14th. Meeting folks and talking with them about the FairTax – both the national bill and our campaign to introduce a state bill in the Georgia General Assembly in January – is our kind of fun.
The Sunbelt Ag Expo is our biggest event of the year, whether we’re talking about the number of people who attend this three-day annual gathering or the size of the farm equipment displayed on the 650-acre site. Five intrepid volunteers (Chief Operating Officer Tom Brown, Mike and Marian Warlick, Chip Spradley, and Jack Shulin) drove a total of about 2,100 miles round trip from North Georgia. The team worked more than 135 hours during the three days of the Expo, talked to hundreds of people, signed up 100 new GFFT supporters, distributed hundreds more Fact Cards, and attached 700 bright red or blue balloons to the wrists of kids from toddlers to teenagers. The balloons provided FairTax advertising all over the Expo and brought families to our booth, where parents learned about the FairTax while we secured the balloons to their kids. When we had a few minutes to walk outside the Family Life Center, we saw our balloons bobbing along everywhere. We also recruited several folks who accepted the offer of a free tee shirt by agreeing to wear it immediately.
We were very pleased when another exhibitor, who saw Georgians for Fair Taxation listed in the Expo program, stopped at our booth late Tuesday afternoon, chatted a few minutes, and added $60 to our donation jar. Thank you!
We have a challenge for the nearly 400 GFFT members who live in Moultrie, Tifton, Albany, Cordele, Valdosta, Sylvester, and the smaller towns around them: save the date now to join the North Georgia contingent in 2016. (Expo dates are October 18-20.) The Expo draws enough visitors that we could have used at least two or even three more people. Volunteer for the entire event, or for a day, a morning or afternoon shift, or any combination that works for you. You don’t have to be a FairTax expert, but you must like balloons. After all, why should the north Georgia folks have all the fun? We’ll begin recruiting enthusiastic advocates in September for Sunbelt Ag Expo 2016.
Halloween was the perfect day (except for the weather) for the Gwinnett GOP Chili Cook Off, as costumed volunteers served up chili and FairTax information. With the beautiful Rhodes Jordan Park Lake in the background, Georgians for FairTaxation participated in the third annual Gwinnett GOP Chili Cook-Off. It was cold. It was windy. It was Halloween. But the FairTax Super Heroes were undaunted. Lisa Chambers, Karen Joines, Melissa Earnest, and Diane Earnest braved the weather to serve up chili and FairTax facts.
Competing with the Georgia – Florida football game and Halloween, the Cook-Off had a bit smaller crowd this year than last year. In spite of that, we were able to add some names to our supporter database. We didn’t win awards for our chili or our decorations, but we’re sure next year will be our year! All you chili aficionados out there, mark your calendar for next year to help us take the prize. The chili competition is friendly and the prize is bragging rights. No pressure. Just fun!
Philip L. Hinson, CPA
Georgians for Fair Taxation (GFFT) has been hard at work on a state tax reform proposal modeled after the national FairTax proposal, which enjoys widespread support in Georgia. Although the model would work somewhat differently at the state level than at the national level(1), the basic model would nevertheless address the primary concerns of state legislators in a balanced and economically sound way. State legislators and governors all over the nation are already seeking ways to:
(a) Compete more effectively in attracting business and industry, in order to
i. Expand their state’s revenue base, and
ii. Create good paying jobs for their citizens, and
(b) Do all of the above without unfairly shifting the tax burden to any subset of the population.
The FairTax model addresses each of these goals more effectively than any other known approach. The essential elements of the FairTax state model are as follows:
- Complete and immediate elimination of state income taxes – both individual and corporate;
- Revenue neutrality – when calculated statically, the model neither increases nor decreases the state’s revenues. However, due to faster economic growth, over the longer term, revenues increase at a faster rate than they otherwise would;
- Replacement of income tax revenues by broadening the sales tax base, not primarily by increasing the sales tax rate. This is accomplished in two ways:
(A) Services are added to the state’s sales tax revenue base, and
(B) The myriad of exemptions, exclusions, and special interest carve-outs in the current code are replaced with a simple, easy to understand and administer “prebate.”
GFFT commissioned Beacon Hill Institute (BHI) of Boston’s Suffolk University, one of this country’s leading economic and tax policy organizations, to calculate what the sales tax base would be and the associated revenue-neutral rate. BHI determined that the rate would be around 5½%. This rate compares quite favorably to the current rate; the effective FairTax rate for most Georgia families, net of the rebate, would be less than the 4% state sales tax they are now paying. In fact, a family would have to spend at four times the federal poverty level before their effective rate under the Georgia FairTax would equal the 4% they now pay. For the vast majority of Georgians, not only is the income tax eliminated, but the effective rate of the sales tax is reduced. Yes, more things are taxed under the new sales tax – there is no free lunch. But the rebate effectively protects those at the bottom of the economic ladder while making the consumption tax truly progressive in terms of the effective rate.
There is more good news concerning Georgia’s highly coveted AAA bond rating. Replacement of Georgia’s current tax system with the FairTax model will not negatively impact its bond rating. First, the empirical data clearly show that consumption taxes are more predictable and stable than income taxes. Second, there are 15 states with a AAA bond rating, the highest that Standard and Poor’s awards. Of the nine states with no income tax (on wages), four — almost half — have a AAA rating, a disproportionately high level of representation. In fact, a careful analysis of the current bond ratings of all fifty states over 7 rating categories does not support the belief that the presence of an income tax leads to a higher bond rating(2). Furthermore, according to ALEC (American Legislative Exchange Council), eight of the nine no-income-tax states rank in the upper half of the 50 states in terms of economic performance(3). Clearly, any concern over the FairTax having a negative impact on the state’s excellent bond rating is misplaced. There simply is no positive correlation between the presence of an income tax and a state’s bond rating – nor should there be, given the historical economic performance of the various states.
The FairTax was designed using a range of marketing techniques to find out what the American people as a whole wanted in a tax system. Not what Democrats or Republicans or independents wanted, but what all Americans wanted. This methodology effectively removed partisan bias from the resulting proposal to the maximum possible extent. That is one of its greatest strengths, as well as its greatest weakness. We live in a highly polarized nation, deeply divided by partisan differences. Our state and national legislative systems have become a microcosm of this unfortunate situation. FairTax supporters do not seek to impose a partisan agenda through tax policy. They simply wish to promote an approach to taxation that minimizes economic distortion and maximizes economic growth. This non-partisan approach creates immediate and strong opposition from some legislators and from ideologues in the general public. Conservatives often oppose the prebate, which totally untaxes the poor. Progressives sometimes reflexively oppose eliminating income taxes because of concerns about regressivity, while ignoring the protections provided by the rebate mechanism.
FairTax supporters have resisted temptations to modify the FairTax in an attempt to attract support from one side of the partisan divide or the other. As someone once said, if you are being attacked by both sides, you must be doing something right. We believe that we are doing something not only right, but something meaningful for Georgia and the nation. Georgia has a rare opportunity to set an important example for the nation. We can show the rest of the country that we are still capable of setting aside our partisan differences (as we once did) on issues of vital importance. We are capable of saying to the special interests: We are restoring the concept of equal protection under the law to our tax laws for the first time in 102 years. In essence, the FairTax model treats the entire 10.8 million population of Georgia as a single interest group and serves their interests, rather than carving up the electorate and pitting various factions against others or against the rest of the state. And perhaps most important, we are saying to the business community that Georgia is open for business, not via the path of crony capitalism, but through a truly innovative and creative approach to collecting the vital revenues that our state needs to ensure that our infrastructure measures up to the demands of the 21st century.
GFFT is having a bill crafted around the sales tax base and 5½% rate that Beacon Hill has calculated. It is expected that the bill will be dropped in the 2016 session of the General Assembly. While we understand that this will be a very tough battle, it is a fight that must be won. FairTax supporters are not yet ready to accept what 76% of Americans now believe to be our future: the next generation will have a lower quality of life than the generation which preceded it for the first time in our nation’s history(4). The “baby boomers” only have a few more short years to affect the legacy that they leave behind. As it stands right now, that legacy is not one that we can be proud of.
However, there is still time to change that belief. Finger-pointing and rigid political ideology won’t get it done. Thoughtful, open-minded consideration is required. We are confident that Georgia legislators and the public are up to the task.
(1) For example, payroll taxes would not need to be replaced at the state level.
As the 2016 presidential campaign gathers momentum, candidates are offering several flavors of tax reform; several of them are promising to eliminate the IRS; and all of them are saying their plan is the best. Only one candidate wholeheartedly supports the FairTax® as a key component of his platform. Don’t the others understand?
Apparently not. Most candidates who talk about abolishing the IRS still believe they can do so without tinkering with their treasure chest: the income tax gravy train that enables them to accumulate campaign cash in return for tax loopholes. When they mention a flat tax, or a flatter tax, or a “fair and flat tax,” or a simpler tax, they all conveniently omit a key word: INCOME. These proposals are income taxes. One candidate even believes increasing taxes on corporations is the answer, conveniently forgetting that corporations don’t pay taxes! Ultimately the American people pay all corporate taxes when they purchase goods and services. Our 35% corporate tax rate, the highest in the world, drives businesses away, and that costs us jobs.
As a nonpartisan 501(c)(4) corporation, Georgians for Fair Taxation does not endorse candidates, but we can let you know which ones have embraced the FairTax, and we can provide ammunition to help you explain to your families, friends, and neighbors why a flat INCOME tax can’t and won’t eliminate the IRS. This short video provides an easy to understand – even entertaining – explanation of why a flat INCOME tax won’t eliminate the IRS. Watch it. Then add it your information arsenal. Share it on your Facebook page, Tweet it, email it. Do whatever you can do to promote the FairTax as the only true solution to our disastrous income tax system. The FairTax is the only tax plan that will eliminate the IRS!