I’d like to explain how the FairTax will be one of the greatest boons to homeownership and the home construction industry in the history of America.

I have been a Realtor since 1975 and a home builder/ developer since 1980 in the metro area of Minneapolis/St Paul, Minnesota.

First, the FairTax eliminates the imbedded expenses of income tax, payroll tax and tax compliance from all the products of our great nation. This has been estimated by economic scholars, including Harvard’s Dale Jorgensen, to average from 22% to 25% of the price of our products. Surely new home construction is at the high end of imbedded tax costs due to the thousands of components and man-hours in every new home.

When the actual cost of constructing a new house is at least 22% less, the FairTax just brings its price back to the level it is today. Since existing homes are not subject to the tax, all home values will remain about the same. But the consumption of all the materials, energy and labor that it takes to build a new home should be taxed. And when that consumption is taxed, new home sales will produce one of the largest portions of the fuel for the engine that powers our great country’s economy. That’s fair. That’s good for The United States Of America today and it’s in the best interest of our children’s children’s children -even those who will become Realtors and Builders tomorrow.

Now recognize that the FairTax will eliminate the same imbedded costs to provide loans. Mortgage rates will become competitive to the rates of tax-exempt loans. The bond market shows us that the difference between taxed and tax-exempt rates just happens to align with Dale Jorgensen’s prediction. Tax-exempt loans tend to be about 25% lower. So mortgage rates that are today say 6.5% will instead be more like 4.9%. That of course will be in the best interest of all our children who need or want a new home today as well as tomorrow.

But that’s not even the main reason for the great boon. The following is. Since tax withholdings are eliminated by the FairTax, take-home pay goes up instantly. Every American will have 100% of their income at their own disposal –including to save for a down-payment on their new home with pre-tax dollars. And since mortgage rates will be about 25% lower, many, many more Americans will qualify for mortgages. And all will qualify for larger mortgages. That can’t help but be a boon to the housing industry both immediately and into the future.

But what about the FairTax eliminating mortgage deductions? Over time, myths have a way of becoming assumed to be truths. Such is the case with the perceived benefits of mortgage interest deductions. First of all, over 70% of Americans don’t even file the long tax form -they don’t even take deductions. But even the 27% who do will come out ahead due to the facts above. (Calculation tables supporting this statement can be readily found on the FairTax web site.) Also, my 30+ years in the business have shown me that buyers just don’t purchase or select a home because of their potential mortgage deduction. Compared to the overall, nation-wide benefit to homeownership provided by the FairTax, even the rare few who can actually show a benefit within today’s archaic income tax system still come out ahead with the FairTax -by far, irrefutably. That the mortgage interest deduction is a “benefit” is false promise in the first place and its now being used by those who have a vested interest in the present income and payroll tax system as a tactic to scare the unaware away from the FairTax.

With the FairTax replacing our income and payroll taxes, not only do buyers of new homes win, but all who work in and around the housing industry win and that helps America win. The FairTax is good for home-buyers, home-sellers and home-builders as well as our kids and their kids and their kids and theirs….

Please visit www.FairTax.org to learn more.

Leaders Should Be Bold

Knowing the economic growth that the FairTax will bring to America, I am always pleased when one of America’s major news outlets focuses on this legislation, as happens frequently.  A recent Wall Street Journal editorial warning politicians against supporting the FairTax was no exception.  While I certainly disagree with the editorial’s conclusion, in the wake of Tuesday’s midterm election results the WSJ’s admonition is tremendously instructive to the new Republican majority set to lead the House.

The WSJ concludes, “Our advice to candidates would be to avoid the FAIR tax [sic] and focus on goals that are more achievable and less politically self-destructive.”

We have a President in the White House and a leader in the Senate whose policies have been so thoroughly rejected that the party in power lost more seats in the House on November 2 than have been lost in any election since 1948, when Republicans suffered an even greater defeat.  Despite this rejection of the direction of their leadership, the President and the Senate leader seem committed to continuing their course.

The American people have a different plan.  Having appeared at hundreds of events as a congressional candidate over the past seven months, I have never once had a voter ask me to “focus on the achievable”—those things that the President supports and will sign.  Never once has a voter asked me to do what is politically prudent.  Over and over again, voters have asked—nay, demanded—that I do what is right…that I be bold…that I speak the truth irrespective of the consequences. That is what the FairTax is all about.

Would it be “easier” or “safer” to simply talk about tax reform generally rather than write down all of the specifics in a 131 page piece of legislation that is introduced in the House and Senate for all to read?  Absolutely.  It would be both easier and safer, but the American people deserve better, and the FairTax gives it to them.

Would it be “easier” or “safer” to simply make some minor changes to the current income tax code rather than trying to abolish and replace it?  Absolutely.  It would be both easier and safer, but the American people deserve better, and the FairTax gives it to them.

The payroll tax is the largest tax that 80% of Americans pay, but the FairTax is the only bill in Congress that is bold enough to take on that burden.  American businesses face the highest corporate tax rates in the world and we are losing American jobs as a result, but the FairTax is the only bill in Congress bold enough to say that businesses don’t pay taxes—only consumers do—and so in the name of transparency we should abolish corporate tax rates and be honest about how those taxes affect consumers.

The WSJ recognizes the merits of the FairTax.   “[A] consumption tax like the FAIR tax [sic] is preferable to an income tax,” it says.  “If we were designing a tax code from scratch, the FAIR tax would be one consumption tax option worth debating,” it concludes.

But not now, it advises.  This is too soon, it warns.  It is too hard, it cautions.  I don’t have all the answers but I have this one: not one voter in Georgia elected me to wait; not one voter in Georgia elected me to do what is easy.  Shame on the WSJ for encouraging either.

With our economy in shambles, our debt growing by trillions annually, and our faith in government at an all time low, we must act.  If it was easy, it would have been done already.  It is hard.  If it was politically safe, it would have been done already.  It requires risk.

As I look at new Congressmen elected across this country on Tuesday I am filled with hope for our nation’s future.  These are men and women who will not wait, who will not be cautious, and who will gladly sacrifice themselves for a brighter future for our nation.  I am proud to share those convictions, and I am committed to doing what must be done.

The time is now.

View this article on the Examiner.com

Thank you for your support of the Fair Tax (HR 25) and (S 296). We are continuing to work for a Fair Tax model for Minnesota.

Dennis Madden
State Director (volunteer)

The result: A blizzard of new tax forms that the Internal Revenue Service will begin rolling out next year.

“It was actually something that we were following back under the Bush administration under the 2008 budget — we started to see these kinds of rumblings about the ‘tax gap’ and whether or not businesses were paying their fair share,” says Tom Henschke, president of the Pennsylvania-based SMC Business Councils, which was one of the first organizations to call attention to the health care amendment when it was introduced last fall. “So two administrations can claim credit for this.”

The first tax-reporting expansion was buried in a different bill, the Housing Assistance Tax Act introduced by House Speaker Nancy Pelosi and signed into law by President George W. Bush in July 2008. Best known for its first-time homebuyers’ credit, the bill also created a new addition to the family of 1099 tax forms: the 1099-K.

The 1099 is a catch-all series of IRS documents used to report non-wage income from a variety of sources like contract work, dividends, earned interest and pension distributions. The new 1099-K aims to shine a light on a currently hard-to-track payment stream: credit cards. Starting in 2011, financial firms that process credit or debit card payments will be required to send their clients, and the IRS, an annual form documenting the year’s transactions.

The rule comes with a floor to weed out the most casual retailers: The 1099-K is only required when a merchant has at least 200 payment transactions a year totaling more than $20,000. But it applies to all payment processors, including Paypal, Amazon.com, and others that service very small businesses.

The goal of the new regulations is to catch income that is going unreported to the IRS. The federal government loses an estimated $300 billion each year from the “tax gap” between what individuals and businesses owe and what they actually pay.

To read the rest of the article, click here.

Now comes Bank of America about to tell Congress the same thing:

Bank of America’s top mortgage executive, testifying today before Congress, will release sobering details of home-loan delinquencies, including that “hundreds of thousands of customers” haven’t made a payment in more than a year.

And, to put a number on it…

Almost 500,000 struggling loan customers have not supplied information or taken other basic steps to qualify for mortgage help. About half of them have not made a payment for more than a year, or owe more than 50 percent of the value of their homes.

That’s because those 500,000 lied about their income, assets or both when they applied for the loan originally, and that deception would be discovered.

But this also means that some 250,000 of those customers have not made a payment in a year.

If we presume that these people have average mortgage payments of $1,000 a month (and this number is probably low), this amounts to $250 million monthly that is being spent in the economy but would otherwise go to mortgage payments.

Read the entire article here.

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“If we divide the 2001 net tax gap estimate of $255 billion by 130 million individual taxpayers, we can see that each of those taxpayers in 2001 paid, on average, an extra $2,000 to subsidize the unwillingness or inability of some taxpayers to pay their fair share.”

In 2001 the average taxpayer paid $8,265 in taxes. With an estimated tax gap – which is the difference between what taxpayers should pay and what they actually pay on a timely basis – of $345 billion, this means that the 130 million taxpayers paid on average $2,649 more in taxes to subsidize the unwillingness or inability of some taxpayers to pay their fair share.

In other words, if everyone paid the taxes they owed, average individual income taxes paid per taxpayer could have been 32.1 percent less.

Click to view the entire What the federal tax system is costing you – besides your taxes! Tax compliance facts white paper.

This is your chance to join a peaceful demonstration to express your displeasure at both the National and State burdens which we now shoulder and will be increased, upon us. Your chance to let your representatives know in both D.C. and Minnesota, we have had enough and are very unhappy at how they are not listing to the very people who elected them to their positions, and can un-elect them also.

Come join your neighbors at the MN Capitol grounds on April 15 commencing at 5:PM to 9:PM. There is a lineup of speakers who are Conservatives with a message. Meet your neighbors of like morals and views and visit the many booths where you may learn how you can get active and help in the struggle to send our Representatives the message of smaller government, lower taxes and a business culture that grows entrepreneurship and jobs jobs jobs. And it will take all of us to do this job and, If you don’t get active or help in the struggle, you will have no right to criticize the results. Sooooo, Put the date on your calendar, gather a neighbor ot two and get to the event on April 15 at the Capitol. It is your future too that is being affected by what is going on in Government today.

Any while there, be sure and stop by the FAIR TAX 4 MN booth and say Hello. We have a member of our group on the Speaker’s schedule. Learn more about how the Fair Tax can be a part of Minnesota tax policies. Our goal is to make April 15, just another spring day by not being required to file either State or National taxes.