My plan is to restore government to the government that America’s Founders designed it to be. Not this bureaucratic nightmare we have today. To simplify government, one function and one function only demands our attention. That function is taxation. Government runs on the property taken from self-reliant individuals and transferred through the process of taxation to government.
In 2008 almost $3 trillion will be taken from individuals to pay for Federal government services that many self-reliant individuals would prefer to do themselves. A trillion dollars is a million times a million – an enormous sum to extract from individuals. That is an annual $10,000 tax bill for each and every one of our 300 million citizens – man, woman and child – and that is only what the federal government takes. State and local taxes are additional burdens. Taxation is the biggest infringement on our liberty.
Taxes taken from the individual reduce the property, the capital, the very resource individuals use to grow the economy. Taxes confiscated by government could be invested in new business and create new jobs. Most importantly taxation reduces the ability of millions of individuals to save money, invest it and create a nest egg for themselves. We are dedicated to reducing taxation on individuals and in the process implement a plan to make America a more prosperous nation by enabling all Americans including the working poor and middle class to attain the wealth necessary to achieve financial independence.
Over the last 45 years, as our population expanded and our economy along with it, Kennedy, Reagan, and Bush 2 have been reducing income taxes on individuals with the inevitable increase in productivity and tax revenue to the government. For example, the top income tax rate on dividends received by individuals has dropped from 91% to 70% to 28% to the 15% it is today. More and more Americans are investing in the stock market to take advantage of this low rate and our economy has increased more than 20 fold.
However, we have determined that the Federal income tax on dividends and the 35% tax on ordinary income which is disproportionately paid by wealthy Americans should “not” be the focus of our initial efforts.
We believe that “payroll taxes” - those amounts paid to government for Social Security, Disability and Medicare – not “income taxes” should be targeted. In round figures the government collects $1.3 trillion in “payroll taxes” but only $1 trillion in “income taxes”.
As payroll taxes are a greater confiscation of individual property, it only makes sense to address their elimination first. As the poor and middle-class pay so little in income tax we focus on the payroll tax they are forced to pay which amounts to 15.3% of their income – an enormous penalty to pay for the return they get with their Social Security benefits.
By taking that $1.3 trillion of payroll taxes collected annually by government and returning the ownership thereof to the individual and forcing the investment of those funds into the capital markets two major objectives are achieved – the individual gets a nest egg that eventually makes him wealthy and the American economy receives an enormous shot in the arm with the infusion of over a trillion a year to fund an explosive growth of the economy.
We have developed a plan to accomplish this transition, which we call the “Rise Up America” plan. Details can be found on its website at www.riseupamerica.us .
As an example of how Rise Up works take your average American household that makes $40,000 a year and annually pays $6,000 in payroll taxes (15%). Assuming that he never gets a raise he pays payroll taxes of $240,000 over his 40-year working life. Under existing law he will receive a monthly retirement check of $1,122 and have no nest egg to show for his “investment” of $240,000. Not one red cent.
Under the Rise Up America plan his weekly payroll taxes will be placed in his solely-owned personal account and immediately invested in indexed stock funds. His investment of $240,000 will grow to $3.2 million over 40 years (without wage inflation).
We applied an annual 10% rate of return to achieve a $3.2 million nest egg. The 10% rate is 2 ½% less than the S&P 500 stock index has averaged over the last 30 years.
The $3.2 million nest egg is the personal property of the taxpayer and the income from that nest egg would generate a monthly retirement check of $27,000 – more than enough to fund an affluent retirement and get the best medical coverage on the planet. As the nest egg is the property of the taxpayer he can leave the entire $3.2 million estate to his kids. (provided the Death Tax is eliminated)
Replacing existing entitlement programs with personal accounts under the Rise Up plan has a number of benefits. Those benefits are not limited to insuring a financially independent retirement but to many other areas of social concern. Visualize how each benefit transitions America to a smaller central government and towards the no taxes on income policy of our Founders.
Budget Reduction
The national budget is nearing $3 trillion a year and can be cut in half by switching to personal accounts. By eliminating “mandated entitlements” most of the non-discretionary budget items are automatically eliminated as is the political argument that politicians make that they have little discretion in reducing the budget. Simple.
Tax Cut
By knocking $1.5 trillion off the budget, the taxpayers get a deferred tax break of equal amount through retaining ownership to those funds heretofore sent to the government as payroll taxes. Simple.
Wealth Creation
Establishing personal accounts at the rate of 15.3% of personal income will make both individual Americans and in turn the country substantially wealthier than under the present entitlement structure. By switching from a pay-as-you-go consumption-type program to an investment and growth fund-type program should Make the Poor Rich and America Wealthier without costing the taxpayer one dime more than he presently spends. Most of our Public School Teachers have similar programs as well as all members of congress through the Thrifty Savings Plan. Simple.
Unfunded Debt Extinguished
The September 30, 2007 financial statements of the US Government revealed that Congress has made promises of $45 trillion to future participants in the Social Security and Medicare programs. When you deduct expected receipts from projected expenditures you come up $45 trillion short or $150,000 for every man, woman and child in the country. By adopting Rise Up, those unfunded debts are immediately extinguished and the $45 trillion deficit disappears. Simple.
Government Guarantee of Benefits
Under the Rise Up America plan all benefits payable under the old Social Security and Medicare plans will be honored and frozen at their current levels (with annual upward inflation adjustments). Congress will be unable to reduce those benefits in the future. Simple
Funding the Transition to the Rise Up America Plan
Once the Rise Up America Plan is enacted the government will no longer have the payroll tax revenue stream with which to pay current entitlement benefits. The question arises where does the money come from to pay benefits to existing and future participants?
From time to time the Treasury solves financial problems such as this off-budget. Off-budget means expenditures don’t go through the normal budget process where Congress has to find something to tax to get expenditures authorized. Solving the Savings and Loan crisis in the early 90’s and the recent interest rate reductions were off-budget solutions to financial problems.
We figure that a the Rise Up America plan will cost nothing inasmuch as an asset of $1.3 trillion is being created on the American balance sheet which will offset the increase in the monetary base which will be diluted by paying the $1.1 trillion in benefits out of the Treasury (printing new money). An absolutely marvelous way to initiate the hundreds of trillions the Rise Up America plan will eventually generate. Simple.
Competitive Advantage
Over the year’s business has supplemented small Social Security checks with pensions for their retired workers. With the advent of globalization, foreign competitors have had a price advantage over domestic manufacturers because they don’t pay these pension costs. By instituting the Rise Up America Plan domestic manufacturers will not be saddled with those costs and can compete more effectively. Simple.
Simplifying Retirement Funding
Millions of public and private sector old-age retirement and medical care plans can be eliminated in favor of one simple personal account. An account that allows the taxpayer to purchase his own goods and services and let the market compete for his dollars. Simple.
Women, Demographics and the Family
Under the Rise Up America Plan, “Personal Accounts” are shared by spouses making it easier for a couple to decide to raise a family. The woman can stay home, raise a family, choose not work a day in her life and retire a millionaire. This will enable couples to have more than two kids and improve our national birth rate and counter the impending demographic disaster we are facing that will cripple the current Social Security system. This feature financially emancipates women. Simple.
Poverty
The establishment of “Personal Accounts” will eliminate poverty as we know it. Those that are in need, such as the disabled, retarded or otherwise afflicted will be taken care of under the extension of existing programs. The Rise Up America Plan allows wealth to accumulate generation after generation ensuring that the children of the poor and middle class can get the best education and healthcare available. Nothing could be more American than free market capitalism solving poverty. Simple.
Individualism
Nothing will restore the belief of ordinary Americans in themselves faster than the government returning the ownership of $1.3 trillion of their annual payroll taxes. That will signal the end of a form of socialism that prefers collective taxation and the rebirth of the self-reliant individual. This will also restore the faith in government that is currently seeing its lowest approval ratings in its history. Simple
Crime, Stress and Hardship
Crime and hardship are generally financial in origin. As the Rise Up America Plan makes the poor rich it follows that crime and hardship will eventually subside. The mental stress caused by financial concerns should also be alleviated by the prosperity created under the plan. Simple
Educational Requirements
The Rise Up America Plan was designed to enable those who for whatever reason cannot compete for the big bucks to achieve financial independence merely by being stable and industrious. It will be unnecessary for him or her to be highly educated. Simple
Other
There are many other benefits from adopting Rise Up. They can be reviewed on the Mission Statement on the Rise Up America website along with a free e-book available there.
Elections are about new ideas and change. Rise Up America is both a change for the better and a completely new idea that every American will support. We hope to raise the “Rise Up America” flag for the people to march under. Will you help us finance the effort to get the word out?
We will need substantial funds to staff our effort and saturate the newspapers, schools, radio, TV, institutions, women’s groups, and the new media tools like the internet, MySpace, YouTube, and DVD’s with provocative and interesting videos, papers, informative materials and speaker tours. We plan to utilize these new communication channels to effect a change that would otherwise be impossible using conventional media.
We are offering the following levels of contribution. They will be fully deductible as charitable contributions under Section 501(c)(3) of the Internal Revenue Code. We hope you feel the same way we do about the Rise Up America plan and will help us with a significant contribution. If you wish to talk personally to the Managing Director of the plan please call Richard McDonald at 818-998-6800.
( ) Charter Member - $10,000 and up
( ) Gold Member - $ 5,000 to $9,999
( ) Silver Member - $ 1,000 to $4999
( ) Preferred Member $ 100 and up
Make you checks payable to the Ownership Society Institute (OSI) and mail it to OSI, 9662 Jumilla Avenue, Chatsworth, CA 91311-5610.
You can also make a credit card donation directly on OSI’s website at www.riseupamerica.us at the donation button.
Any help you can offer will be appreciated and we will keep you advised of our progress. We believe we have the right program for America and Americans.
