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www.fairtax.org

February 12, 2010

As the nation drowns in a sea of red ink, more and more and more citizens of all political affiliations are asking “what went wrong with the American dream?”

From coast to American coast and driven by necessity, the American people are awakening to the need to wrest control of our destiny from those who advance their political fortunes at the cost of the genius of the American spirit of innovation, hard work, independence and liberty. There is a dawning realization among a rapidly growing number of citizens that the solution waits in FairTax legislation, HR25, which does more to shift power from government to the citizen than any other single change since the founding of the nation.

More and more experts warn of extended unemployment for what experts also define as the most productive workforce in the world. Once the envy of the world, Bethlehem steel no longer dominates the world, cotton miles across the south no longer ship to the once powerful textile industries in South Carolina, and workers in Detroit see the American automobile industry struggling to regain momentum and take the lead back from foreign manufacturers. From the San Joaquin valley of California to the wheat and corn fields of the Midwest, we grow enough food to feed the world but worry that we don’t have enough food to feed our own children.

In the nation that saw clipper ships ranging the world faster than any competitor, that developed the surgery to replace the human heart, , that brought the personal computer forth from a hometown garage in California, that won world wars and went on to rebuild Europe and Asia and that put man after a ten year effort on the moon, we now actually wonder whether the American people can trump the narrow self-interests of a few in Washington who profit lucratively by trading tax code favors against the best interests of nation and every taxpayer.

Our system of government, we are reminded, was never meant to be handed over to a “political class”. It does not fly right on “automatic pilot”. The Founding Fathers understood the inherent nature of government to gather more and more power unto itself and equipped our citizens with the means to restore the proper role of the people over jealously guarded power concentrated within small circles of influence and profit. It could not be more needed.

The FairTax shifts federal taxes away from what helps the economy—work, saving and investment—to what comes out of the economy—consumption. As significantly, the FairTax shift the power of federal taxation from the backrooms of Congress to the American citizen who then chooses, by personal consumption choices, the timing and size of each family’s tax burden. It exposes the cost of the federal government and makes each consumer a “stakeholder” in the spending habits of government and it frees the American economy to soar to heights not yet seen.

But this needed change waits for the will of the American people. It waits for the great awakening of self-determination that seems to have begun now in TEA parties, in living rooms and at the polls. There are now more Independent voters than either Democrats or Republicans or Libertarians. The FairTax unites all for a new era of American growth, the immediate healing of our economy and millions of needed jobs. It makes the American worker once more in demand and the genius of American productivity and invention again the envy of the world. It waits for the American people to find their voice and their clout to return our great nation to one that is “of, by and for” hometown America. It waits for us.

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Hyatt Regency Crystal City
2799 Jefferson Davis Hwy.
Arlington, VA 22202

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Operation FairTax, organized by members of FairTax Nation, is the first national conference for supporters of the FairTax — everyday citizens who are committed to actively promoting HR 25/S 296 and bringing it from an “It’s-a-great-idea-but-it-will-neverhappen” dream to a bill on the President’s desk. The conference promises to bring educational and motivational tools to volunteers who are willing to take the FairTax message to elected officials in Congress while here, and to spread the word to all Americans back home.

Arrive in DC at the Hyatt Regency Crystal City on Wednesday, April 14th and join us for an evening “Meet and Greet” and a briefing for plans to “Storm The Hill” on April 15th. Early sign-in begins.

On Thursday, April 15th, our “Storm the Hill” event promises to be one of the biggest public displays yet to create awareness of the FairTax, educating uncommitted and opposed members of Congress on why our country needs FairTax and why they must support it. We’ll make our presence known, alongside other rally-goers who have chosen this significant day for public awareness. Continued sign-ins throughout the day will facilitate head counts for Friday’ workshops, break-out groups and event seatings.

Friday, April 16th, the “meat” of the conference, will begin with late sign-ins. The day will be filled with inspiring speakers and grassroots workshops designed to provide attendees with new and creative tools to spread the word about FairTax far and wide.

To register, each registrant must have a unique e-mail address. You must reserve the hotel room independently of event registration, and a 3-day minimum stay is required to obtain the group rate. Go to the hotel reservation information page for details prior to registering for this event. Be part of history! Attend the first annual conference of FairTax grassroots supporters!

Note: No refunds — your cancelled registration dues will be greatly appreciated as a FairTax donation. Donations to OFT are not deductible on federal income taxes. No registration information will ever be shared or sold to other organizations.

Register Now!

www.humanevents.com

by Michael Reagan
01/30/2010

We are speeding toward an economic cliff because our government can’t practice restraint.

We spend so much more than we take in because politicians at every level use the public treasury to win elections. The public mostly accepts lavish promises of more and more federal spending because the cost of government has been so effectively divorced from what actually comes out of our paychecks.

Ask almost anyone how they did on their taxes and you’re likely to hear a happy exclamation that the taxpayer got a little money back! But ask the same person how much they paid the government over the year in withheld income and payroll taxes and you’ll often see a blank look.

When the money that government spends seems so unconnected to the money we earn it is easy for many to see government expenditures as “free money.” It’s not, but the engineered divorce in perception between the fruits of our labors and spending by elected officials has resulted in a national debt that equals more than $500,000 per American household. If not for accounting sleights-of-hand the national debt would be seen as much higher than even the shocking figure of more than $12 trillion.

As my father, Ronald Reagan, once said, “Our federal tax system is, in short, utterly impossible, utterly unjust and completely counterproductive, it reeks with injustice and is fundamentally un-American… it has earned a rebellion and it’s time we rebelled.”

I agree and that’s why I am enthusiastically now helping FairTax.org with pending legislation to replace the income tax entirely with a fair, progressive and honest national consumption tax aptly called the FairTax. It ends all federal taxes on income and earnings and replaces every penny now raised with a 23% tax on personal consumption at the point of final retail sale.

In conducting research on the FairTax, I have become convinced of two things: the FairTax is the best way to create a new era of healthy American economic growth, and that my father would have been a strong proponent of the FairTax as a tax reform/replacement model had it existed during his time in government.

Among many virtues, like the effect the FairTax will have on bringing trillions of private, job-producing investment dollars into our economy, the FairTax restores critically needed transparency to government spending. Because the taxpayer sees the cost of government on every receipt, the relationship between personal earnings and government spending becomes crystal clear. This will inevitably lead to public pressure to restrain spending — and not a moment too soon.

Workers take home paychecks free of federal withholding and FICA taxes under the FairTax. This is a stimulus idea that we all need. Congressional corruption of the tax code disappears under the FairTax because there are no exemptions that can be expanded and sold for profit and power by tax writing committees to the favored few. In essence, those who spend more pay higher taxes.

Instead of exemptions that can manipulated by Congress, the FairTax issues a monthly “prebate” check that covers the taxes we will pay on the necessities of life and which wipes out all federal taxes on spending up to the poverty level. In addition, hidden income-tax costs now embedded in the price of products we pay will also be eliminated and brought into the bright light of public scrutiny.

When you consider that fat cats, illegal immigrants and the underground economy all become part of the tax base, as consumers, it is easy to see that we can all pay less of a share for government. It’s just a better, more honest and simple way to collect federal taxes, and one that makes April 15 just another spring day.

It’s time for the second American tax revolt and that’s why I am helping lead the FairTax national movement and encouraging everyone to join the cause by visiting www.fairtax.org.

Mike Reagan, the elder son of the late President Ronald Reagan, is heard on 130 radio stations nationally as part of American Family Radio. Look for Mike’s newest book “Twice Adopted” (Broadman & Holman Publishers) and “The City on a Hill,” other info at www.Reagan.com.

thehill.com

By Bob Cusack – 01/10/10 11:54 PM ET

IRS Commissioner Douglas Shulman does not file his own taxes in part because he believes the tax code is complex.

During an interview on C-SPAN’s “Newsmakers” program that aired on Sunday, Shulman said he uses a tax preparer for his own returns.

“I’ve used one for years. I find it convenient. I find the tax code complex so I use a preparer,” Shulman said.

Pressed on how he would make the tax code simpler, Shulman responded, “I don’t write the tax laws. Congress writes the tax laws so that’s a whole different discussion.”

The IRS this month announced it will be scrutinizing the tax preparer industry. Shulman said the IRS is looking to set “a minimal level of competence in the preparer community.”

Later in the C-SPAN interview, Shulman downplayed his use of a tax preparer, saying he has used one for 10 years. He noted that he and President Barack Obama are proponents of simplifying the tax code.

Shulman said about 60 percent of Americans use tax preparers and another 20 percent use software to file their returns.

He added, “So you’re over 80 percent of people who aren’t just sitting down and filling out the forms themselves.”

www.ncpa.org

Taxes

January 12, 2010

As legislators wrestle with Washington state’s budget shortfall, it’s important that they recognize the effects of tax hikes on job preservation and creation, says Dr. Kriss Sjoblom, an economist with the Washington Research Council.

According to the Council’s new study, “The Economic Impact of Hiking Taxes to Close the Budget Gap”:

• Increasing the state Business and Occupation tax (B&O) by $1 billion would eliminate up to 15,072 jobs.
• A $2.6 billion B&O tax increase would cost 38,968 Washingtonian’s their jobs.

Raising the B&O tax on businesses, some of which are struggling and are not making a profit, would have serious ramifications not only on businesses but also workers, says Carl Gipson, Small Business Director for the Washington Policy Center (WPC).  Thousands of jobs are at stake with this decision.   Burdening small businesses with higher taxes today will lead to fewer jobs and lower economic output tomorrow.  For example:

• A $1 billion sales tax increase would eliminate 14,759 jobs.
• A $2.6 billion sales tax increase would eliminate 38,024 jobs.

Washingtonians are already struggling in the worst economy since the 1930s.  Lawmakers should not try to make balancing the budget easier by making people’s lives harder, says Paul Guppy, the WPC’s Vice President for Research.

The study shows job losses could be mitigated depending on how lawmakers chose to spend the new tax revenue.

To put Washington state on firm fiscal footing, any budget adopted must not raise taxes during a recession, or result in a projected deficit in the next biennium, says Jason Mercier, Government Reform Director for WPC.  This will mean that some of the programs we’ve grown accustomed to during good times must be eliminated.  Taking more money from businesses and cutting people’s take-home pay through higher taxes is not the solution.

Source: “Tax Increases Will Cost Even More Washingtonians Their Jobs,” Washington Policy Center, January 11, 2010.

For text:

http://www.washingtonpolicy.org/pressroom/pressreleases/TaxAd2010.html

For study:

http://www.researchcouncil.org/publications_container/Tax%20Hike%20Impact%20Final.pdf

For more on Taxes:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=20

online.wsj.com

How One Woman Went to Tax Court and Won Deduction

By LAURA SAUNDERS

A Maryland nurse accomplished two rare feats in her battle with the Internal Revenue Service: She defended herself against the agency’s lawyers and won, and she got a ruling that could help tens of thousands of students deduct the cost of an M.B.A. degree on their taxes.

The U.S. Tax Court handed Lori Singleton-Clarke her victory last month, saying the 47-year-old Bryantown, Md., woman had properly deducted nearly $15,000 in business school tuition. The Tax Court ruling should make it easier for many other professionals to deduct the expense of a Master in Business Administration degree.

After getting word of the court decision, “I nearly yelled the roof off the house,” Ms. Singleton-Clarke says. “I still can hardly believe it.”

The IRS’s rules on deducting work-related tuition are complicated and onerous, ultimately preventing most students from deducting their tuition. But this case clarifies the rules and will likely lead to more taxpayers taking the deduction, tax experts say.

Few taxpayers decide to go toe to toe with the IRS as Ms. Singleton-Clarke did, arguing her case without a lawyer. For good reason: In 2009, individuals won only about 10% of about 300 such cases, according to data from Tax Analysts. Ms. Singleton-Clarke fought her case in Tax Court, a venue where taxpayers don’t have to pay the contested tax before going to trial. The court has a special procedure for small cases.

Some of the losers, such as several dozen tax protesters who defended the filing of frivolous returns, were tilting at tax windmills. Others were simply on the wrong side of the law, including a horse enthusiast who wanted to deduct his hobby losses, an unsuccessful comedian who tried to classify his expenses as business losses, and an attorney who claimed over $100,000 in medical deductions for his visits to prostitutes.

Of the few who did prevail against the IRS, nearly half came to court on a single issue: requests for “innocent spouse” treatment that decouples a spouse from a partner who is a tax cheat. This provision has been used mostly to protect unknowing wives against their husbands’ tax misdeeds. One of the spouses granted relief last year was formerly married to an investment banker who didn’t pay his taxes after his bonus didn’t come though.

Ms. Singleton-Clarke’s encounter with the tax system shows what it can take for one individual to prevail over the IRS against the long odds: favorable facts, obsessive organization, and fearlessness. She says she didn’t have a lawyer because she couldn’t afford one.

Her odyssey began in 2006, when she filed her 2005 return. It showed just over $50,000 of income, several smaller deductions, and one large one—for $14,787 of expenses for an M.B.A. from the University of Phoenix, an online school. Ms. Singleton-Clarke deducted the tuition because her tax preparer told her she met the law’s narrow definitions.

When the IRS audited the return in late 2006, she conceded all the IRS’s challenges to her deductions but one. She dug in her heels on the tuition deduction because, after looking at a complex diagram in IRS Publication 970, she believed she qualified for it.

The audit process first involved several rounds of confusing IRS correspondence. “At one point I had three requests for the same records, each with a different contact name. I had to spend hours calling to figure out who needed what,” says Ms. Singleton-Clarke, a steely but soft-spoken woman.

After that she was summoned to an IRS office in downtown Washington where she had to provide more copies of her résumé, a job description, and other records. She felt overwhelmed and intimidated.

Melissa Golden for The Wall Street JournalLori Singleton-Clarke, in her battle against the IRS, was lauded for her meticulous record-keeping.

Both the IRS’s actions and her reactions are typical, says Christopher Bergin, president of Tax Analysts, a group that fights for tax-system transparency and since l972 has won a series of freedom-of-information cases against the IRS. “Without doing anything illegal, they muscled her. That’s what they do. The pressure can be terrifying,” he says.

A spokesman for the IRS says that it never comments on issues with specific taxpayers.

As Ms. Singleton-Clarke held fast to her conviction that she deserved the deduction, she drew on skills she developed as a nurse responsible for dealing with doctors who may have infringed hospital rules. That was why she studied for her M.B.A., she says: “I didn’t want to feel outmatched by surgeons who didn’t want to talk to me.”

When the IRS again denied her deduction by mail after her meeting with the agent, Ms. Singleton-Clarke wound up going to Tax Court to set a trial date. But when she came to court in November 2008, it seemed that everyone else had settled their cases: “There was just me by myself at one table and the [IRS] tax team of at another in a big courtroom.”

The tax team consisted of a two attorneys and several assistants or paralegals. Ms. Singleton-Clarke had been told to bring copies of her documents in triplicate, including a time line of her career. Judge Stanley Goldberg questioned her closely and complimented her on her record-keeping during the hour-long trial. “The whole time,” she says: “I was thinking, here is this god-like man who is going to make an important decision for me. But he wasn’t a bully. I had met with the bullies before.”

Reached Friday by phone, Judge Goldberg said: “I remember the case well because Ms. Singleton-Clarke was so articulate and well-prepared. Too many taxpayers are not.”

Ms. Singleton-Clarke’s victory came when the ruling was issued a year later. It is unusual in that it helps not only her but others as well. Decisions in small cases aren’t allowed to be cited as precedent. “But everyone uses them,” says Melissa Labant, a tax expert with the American Institute of CPAs. “This case definitely provides a road map others can use, especially M.B.A. students.”

Write to Laura Saunders at laura.saunders@wsj.com

www.foxnews.com

President will seek modifications to the law that sent billions in bailout money in 2008 and 2009 to a flailing Wall Street that was approaching collapse, an official says.

Updated January 12, 2010

WASHINGTON — Targeting an industry whose political deafness has vexed his administration, President Barack Obama is weighing recovering tax dollars from government-rescued financial institutions with a levy.

The proposed levy could put Obama on the popular side of public opinion that is decidedly against Wall Street and angry over shortfalls in a $700 billion bank bailout fund.

A senior administration official said Monday that Obama would seek modifications to the law that sent billions in bailout money in 2008 and 2009 to a flailing Wall Street that was approaching collapse. The government official spoke on the condition of anonymity to discuss the president’s thinking.

The idea received an early boost from Speaker Nancy Pelosi, the top Democrat in the House, where there have been calls for a hefty tax on bank bonuses.

“While we have not seen any specific language from the administration, Congress will certainly examine any serious proposals to lower the deficit and recoup even more of the TARP funds for the taxpayers,” said Nadeam Elshami, a spokesman for Pelosi, D-Calif.

The 2008 law that created the Troubled Asset Relief Program requires the president to seek a way to recoup unrecovered TARP money from financial institutions, but five years after the law was enacted. It does not specify how the money should be recovered.

An industry official said consideration of a levy now would be premature.

“Current law doesn’t trigger this tax proposal for another four years,” said Scott Talbott, chief lobbyist for the Financial Services Roundtable, an industry group for some of the largest financial firms.

“We look forward to seeing the details of the complexity of the formula, of who it’s applied to and what the assessment is based on and when it is applied,” he said.

Government officials have conceded that they don’t expect to recoup billions in TARP money used to rescue insurance conglomerate American International Group Inc. and the auto industry. Banks have been repaying their infusions, in part to get out from under compensation limits imposed on the bailout recipients. Banks have also paid dividends from the government help.

The administration is projecting the losses to the government from the bailout program will be about $120 billion, most of it due to auto and AIG assistance.

According to the law, the status of the TARP fund must be assessed by late 2013, five years after it passed. “In any case where there is a shortfall,” the statute says, “the President shall submit a legislative proposal that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national debt.”

It is unclear how the administration would seek to recoup shortfalls due to TARP infusions into the auto industry or AIG. And any fee could potentially be imposed on banks that have already repaid their TARP infusions in full. Congress would have to approve any fee plan.

Discussion of a bank fee to reduce the federal deficit comes as the administration is preparing to submit its 2011 budget proposal next month and as Wall Street banks this month prepare to hand out near-record compensation for last year’s performance.

Obama has been strident in his criticism of bankers, calling them “fat cats” last month in an interview that aired on the eve of their visit to the White House. With public anger over the bailout still strong, Obama has embraced populist rhetoric in an effort to shame bank executives into paying back the government more quickly and their executives less lavishly.

At the White House on Monday, Obama spokesman Robert Gibbs jabbed at the perceived disconnect between Wall Street executives and their customers. The spokesman said the disparity angered his boss.

“I don’t know anybody, save for a few that work for those banks, that don’t get visibly angry … in reading those stories,” Gibbs said. “I think they’re not listening to the American people.”

Funds collected from such a levy would go to pay down the $1.4 trillion deficit amid the Obama-backed stimulus package and aid to Detroit’s automakers.

Washington spent about $245 billion to help banks in the Troubled Asset Relief Program, much less than President George W. Bush’s Treasury Department secured to keep financial firms afloat.

So far, $162 billion of that has been repaid, including $20 billion each from Citigroup and Bank of America under a special targeted program.

www.cnsnews.com

Monday, January 11, 2010
By Staff, Associated Press

Washington (AP) – The Obama administration will announce on Monday funding for nine projects designed to significantly increase fuel efficiency in heavy trucks and passenger vehicles, with more than half the money coming from the $787 billion stimulus package.

Energy Secretary Stephen Chu will detail the projects during a ceremony in Columbus, Ind., home of Cummins Inc., which is to receive nearly $40 million to develop a more efficient and cleaner diesel engine, a more aerodynamic long-haul truck cab and trailer, and a fuel cell that would deliver auxiliary power to reduce engine idling while the vehicle was not on the road.

The White House said the nine projects would receive $187 million from the federal government, with more than $100 million coming from stimulus funds and the remainder from DOE appropriations. Recipients are expected to match government funding, creating a total investment of $375 million in the projects.

According to the administration, the nine recipients are expected to create more than 500 research, engineering and management jobs, with 6,000 more positions anticipated when the technologies go into production and assembly.

In detailing the project awards, the administration said the new technologies, when in broad use, “could save more than 100 million gallons of oil per day and reduce carbon emissions from on-road vehicles by 20 percent by 2030.”

Three of the projects, receiving $115 million, are aimed at improving long-haul truck fuel efficiency by 50 percent, with new designs to be ready by 2015.

In additions to Cummins, Daimler Trucks North America LLC, of Portland, Ore., will receive nearly $40 million; Navistar Inc., of Fort Wayne, Ind., is in line for $27.3 million.

The remaining six projects for passenger vehicles will spread more than $71 million among Chrysler, Ford, General Motors, Delphi Automotive Systems, Robert Bosch and a second Cummins project.

The money will go to companies based in economically hard-hit Michigan and Indiana, with the exception of Daimler Trucks.