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Tax Plan Proposal For an “Innovation Economy”


After reviewing the tax plans of each of the GOP Presidential Candidates, I decided to try to craft a plan which I think will accomplish five major objectives:

  1. Create an “Innovation Economy”
    1. Economy which rewards Entrepreneurs, Landowners & Businesses who invest in the U.S.
  2. Maximize U.S. economic growth
    1. GDP Growth, Capital Investment Growth, Wage Growth, & New Job Creation
  3. Cut taxes for every single income class
    1. Focusing the largest cuts on those who are most likely to pump it back into the economy
  4. Reduce the size of the Internal Revenue Service
    1. Make it so that every single individual can do taxes on just one form
  5. Incentives for Top Earners to drive extra money into the economy in the most productive way
    1. Make it more profitable to start small businesses, and invest in real estate

I, of course, also have the advantage of not needing to craft a plan that can get me elected, so I am simply trying to build a tax plan that will accomplish those five goals, regardless of how the ideas would play on the campaign trail.

Highlights of the Innovation Economy Tax Plan

Eliminates Corporate Income Tax

Creates a two-tier “Business Transfer Tax” or Value-Added Tax (VAT):  16% and 25%

Enacts a one-time deemed Repatriation tax of 5% on all foreign profits currently deferred

Rental Property, and commercial property, Income would no longer be taxable

Reduces seven Individual Income Tax Brackets down to two:  10% and 25% (Progressive Tax)

Increases Standard Deduction to $25,000

Eliminates all Itemized Deductions and Tax Credits

Eliminates payroll tax

Eliminates Alternative Minimum Tax

Eliminates 3.8% Net Investment Income Tax

Eliminates 0.9% Medicare Surtax

Eliminates Estate Tax

 

 

Replace Corporate Income Tax with Two-Tiered Business Transfer Tax (VAT)

In order to boost GDP, Increase wage growth, and drive new incremental job growth, the United States must lower the tax burden on our nation’s businesses.  At the same time, we must discourage businesses from moving operations overseas, and try to drive as much of the enhanced economic benefit back to people within our borders.  For this reason, I am proposing a two-tier tax Business Transfer Tax.  Businesses who adhere to two simple rules, outlined below, will qualify for the 16% Tax Bracket, those who don’t will qualify for the 25% Tax Bracket:

  1. 90% of employees must be based in the United States
  2. 90% of Capital Investment must be spent inside of the United States

Companies would put in an application every three years, which would examine the past three years.  If they have met the requirements for the past three years, they would be pre-approved for the next three years.  If they are determined to have not met the requirements for the past three years, their pre-approval application would be declined.  If they had been pre-approved in the past, and it is determined that they did not meet the requirements over that 3-year span, they would be given a tax bill for the three years worth of tax breaks which they did not earn.

This is a unique proposal, which will drive specific behaviors among businesses in the United States.  This proposal would do a number of things to jumpstart the Innovation Economy inside the USA:

  1. Heavy Capital Investment Industries would benefit
    1. Tooling Companies, and even U.S. Based Software Outsourcing companies
  2. Less Outsourcing across every industry
    1. Companies near the 90% mark will pull back employees, or outsource less in the future
  3. This will create thousands of small businesses
    1. Lower tax rates for entrepreneurs will lead to more new small business start-ups
  4. Top-Earners will turn towards creating businesses to shield taxes
    1. Higher Capital Gains rates for top earners, so they will invest in business start-ups
  5. This move will boost GDP and create a maximum number of Net Incremental Jobs
    1. Important metric increases by incenting companies, & top earners, to invest in America

Enacts a one-time deemed Repatriation tax of 5% on all foreign profits currently deferred

There are $2.1 Trillion dollars of profits currently being held offshore.  If all of those profits came back to the U.S. today, it would result in several hundreds of billions of dollars in tax revenue, and make investment in the U.S. much easier to accomplish for many companies.  Since it is so expensive to repatriate these profits, that will never happen.  This plan is simple, earning $50 – $100 Billion now, and causing a massive influx of dollars into the American Economy, is better than continuing to incent companies to keep their profits overseas by making it cost-prohibitive to bring the dollars back to America.

This plan advocates a one-time 5% Repatriation fee, that will be good for a period of two years, so that companies can repatriate their profits in an orderly fashion.  Most companies will take advantage of this, because it is such a steal of a deal from a tax perspective.  The two-year timeframe will allow companies to plan out the additional tax expense, and the plan will result in a huge influx of dollars into the U.S. economy. This influx, in conjunction with the tax incentives for investing in U.S. CapEx, will cause unprecedented GDP and Job Growth at the very beginning of this plan, which will make it easy to surpass current Presidential Plans in the traditional 10-year view that the Tax Foundation takes when analyzing the plans.

Rental Property, and commercial property, Income would no longer be taxable

This is one of the most controversial portions of the plan.  The idea here is that by taking away the Mortgage Interest exemption (explained later), the housing market could suffer.  This part of the plan will eliminate that concern, along with making it easier for ordinary Americans to prosper in Real Estate, while also making taxes simpler (and therefore, be able to shrink the IRS), all while giving the top earners a place to invest their money which will benefit everyone in the American Economy.

Here is how it would work.  There would be no taxes on any income made through rental property, or commercial property ownership.  This, of course, will increase the ownership of rental property across America.  It will also likely lower the average rent paid (through more competition, and less need for higher profits to offset the tax burden).  This, in conjunction with the removal of the Mortgage Interest Tax Deduction, will drive a disparity between the cost of renting a home, and the cost of owning a home.  Some will say that this is just another way to drive a wedge between the lower class, and the upper class, but the actual effect would be that both classes prosper (along with the middle class).  The lower class benefits from lower rents through increased competition, and less need to offset the tax burden.  The middle class benefits because entry-level housing will need to become cheaper to compete with the new lower top tier of rental prices (along with less need to offset the tax burden.  The upper class benefits because they can participate in the rental market by making a tax-free profit, while helping the lower class live cheaper than they do today.  It is literally a win-win-win.

How will this affect the overall economy?  The lower class will have more money to spend (due to lower rent).  They tend to spend their excess dollars, so this will instantly pump back into GDP, which will be good for businesses.  The middle class will benefit the most from the Net Incremental Jobs which will be created through the higher GDP.  The upper class will try to avoid the higher tax rate on Capital Gains, and will dump lots of excess money into real estate, which will cause a real estate boom throughout the country.  This will directly help the middle class, as studies have shown that in suburbs over 100,000 people (where most of the middle class resides), cities still have between 19% and 25% of the land sits vacant.  This is land that the top earners can purchase to expand the city’s population, or invest in commercial real estate to bring new jobs to the city, but will likely result in very strong momentum on both fronts.

Individual Income Tax Brackets

Consolidate the 7 current individual tax brackets into two brackets:  10% and 25%.  Everyone making under $200,000/year would fall into the 10%.  Once you have exceeded the $200,000 income level, you would be taxed at 25% thereafter (so, this would be a progressive tax bracket).  All income will be taxed the same, whether it is payroll income, short term capital gains, or long term capital gains.  This plan will result in an overall tax rate drop for every single one of the 7 current tax brackets, which we will discuss later.

Standard Deduction

Increase the current standard deduction from $6,300/person to $25,000/person.  This increase will affect all taxpayers, but will the largest positive affect in the lowest tax bracket.  This is important, as we have discussed, because these folks are the most likely to pump the money directly back into the economy the quickest.

Itemized Deductions & Tax Credits

All Itemized Deductions and Tax Credits would be eliminated.  It is important to note that this includes the Child Tax Credit, and the Earned Income Tax Credit, the Mortgage Interest Tax Deduction, and the Charitable Giving Tax Deduction, all of which most candidates keep in their tax plans.  These Tax Credits and Deductions, which the candidates have kept in their plans, cost taxpayers nearly $250B/year in lost tax revenue.

Earned Income Tax Credit

With the proposed increase in the standard deduction, the lowest income brackets are already receiving drastic tax decreases, and the EITC would only reduce tax liability for couples earning $50,000 or more (right around where the EITC phases out today anyway).  For this reason, there is no real reason to keep the EITC in place, as we have already brought their Federal Tax Burden down to 0%.

Child Tax Credit

Again, after the Standard Deduction increase, this tax break would affect mostly the middle and upper income tiers, and the argument for this Tax Credit is typically the lower-income individuals/families.  Since we are lowering the tax burden for every income bracket, we should take advantage of that to eliminate all tax credits, so that we may move to a much more simple tax process, and thereby shrink the size of the IRS significantly.  The folks who are losing this benefit would be paying dramatically less taxes than they are today, and will not miss its effects.

Mortgage Interest Tax Deduction

This is probably the most controversial Tax Deduction omission.  Many Americans would balk at the thought of eliminating this Tax Break.  However, most people think they get a lot more benefit than they do.  Take a family of four, who is in the 15% tax bracket with a $200,000 home, and a 5% loan.  This family only pays $10,000 in Mortgage Interest per year, and their 15% tax bracket means that the entire benefit from this deduction is only $1,500.  Meanwhile, the drastic increase in the Standard Deduction more than offsets any benefit this family will get from the Mortgage Interest Tax Deduction.  In fact, in this plan, the folks at the highest tax brackets would benefit the most from this deduction, and therefore, it is deemed unnecessary.  Some people will argue that removing this deduction will have a negative effect on the housing market.  I would argue that it will bring the housing market to equilibrium, especially in conjunction with the new tax treatment of rental properties, proposed earlier in the plan.

Folks who probably should not be purchasing a house, but do so because they are told the tax credit is worth it, will now make smarter decisions.  Folks who don’t need a mortgage, but take one out to utilize the tax deduction, will now be less leveraged.  Folks who buy a house just a little beyond their means, using the tax deduction as their reason, will now make better budgetary decisions.  In addition, the new tax treatment of rentals will make renting much more affordable, and will shift people from the fence between buying and renting, making it a much easier decision for the majority of families.

After a few years, the market will completely stabilize, and people will be smarter when it comes to home purchases.  The removal of this deduction will likely stabilize the market, making huge ebbs and flows in prices less likely to occur, as Congress will be less likely to use this deduction as a tool in order to drive artificial dollars into the economy.  Also, with the rental property tax exemption, mentioned earlier, the housing market is more likely to surge, than it is to dip.  The balance between renters and homeowners will just shift accordingly, and appropriately.

Charitable Giving Tax Deduction

This is another tax break that people think is bigger than it really is.  Take the same family, except that they are earning more income (making $100,000/year), and tithing 10% of their income.  This family is giving away $10,000/year, and is now in the 25% tax bracket.  They would get a tax benefit of $2,500.  Again, the lofty standard deduction increase would more than make up for any lost income from this tax credit.  Once again, this tax credit primarily benefits the rich.  The argument can be made that charitable giving will go down if this deduction is removed, but I would argue that the economic benefits from this plan will put more money in people’s pockets, and charitable giving will go up as a result.  After all, giving away $10,000 to save $2,500 in taxes is not a fantastic financial move, it is clear that the motivation for giving stretches beyond the tax break.

Eliminate The Estate Tax

This plan is designed to pump as much money into the economy as possible, resulting in more jobs, higher GDP, more corporate investment, and higher wage growth.  All of that should result in people passing away with larger nest eggs than we have seen in previous generations.  The Estate Tax has been a hot button issue for politicians for years, and one which they like to manipulate (or demonize) in order to get votes during election years.  The idea here is simple:  Your debt has already been paid.  This plan already has the wealthy folks paying a lot more than the everyday folks, and has eliminated every way that the rich folks can get out of paying their fair share.  Waiving the Estate Tax gives people a reason to continue to try to build wealth, which is a key component of the Innovation Economy.  Removing this tax keeps incentives in place for people to work harder, and longer, and will ultimately pay for itself in the form of the economy creating more jobs due to the American Spirit of Innovation.  Also, it is just dirty to have someone work hard to save money all their life, and have their kids watch as the government steals their parent’s hard-earned money before the body is even cold.  That should not be the role of Government in the greatest country in the world.

Summary

In the end, it is clear that this would be a drastic change from today’s tax code, but it would accomplish the five goals we set out to at the beginning of the argument:

  1. Create an “Innovation Economy”
    1. Economy which rewards Entrepreneurs, Landowners & Businesses who invest in the U.S.
  2. Maximize U.S. economic growth
    1. GDP Growth, Capital Investment Growth, Wage Growth, & New Job Creation
  3. Cut taxes for every single income class
    1. Focusing the largest cuts on those who are most likely to pump it back into the economy
  4. Reduce the size of the Internal Revenue Service
    1. Make it so that every single individual can do taxes on just one form
  5. Incentives for Top Earners to drive extra money into the economy in the most productive way
    1. Make it more profitable to start small businesses, and invest in real estate

Reason To Believe

While the Tax Foundation would have to run this plan through one of its massive analysis tools to determine the economic effects over the next 10 years, I decided to include some reasons to believe.

The plan was based off of Ted Cruz’s Flat Tax proposal, then altered from there.  I am going to try to value some puts/takes to see how the final financials would play out.

  1. Eliminating all Tax Credits and Tax Deductions: +$250B/year positive vs. Ted Cruz’s Plan
    1. Adding up the approx. costs of EITC, Mortgage, Child Tax Credit, Charitable Deductions
  2. 2ndIncome Tax Bracket of 25% (5,000 HH in the U.S.): +$175B/year positive vs. Ted Cruz’s Plan
    1. + $125B/year for higher income earners (top 3% of HH in the country)
    2. + $50B/year for higher Capital Gains Tax Rates for higher earners
  3. Higher 25% Business Transfer Tax Income Tier: + $300B/year positive vs. Ted Cruz’s Plan
  4. Lower 16% Business Transfer Tax Income Tier: $0B/year equal vs. Ted Cruz’s Plan
  5. Repeal Estate Tax: $0B/year equal vs. Ted Cruz’s Plan
  6. No Rental Income Taxes: – $25B/year negative vs. Ted Cruz’s Plan
  7. 5% Repatriation Tax: 1-time + $50B Was not factored into the Tax Foundation’s analysis
  8. Increase the Standard Deduction: – $700B/year negative vs. Ted Cruz’s Plan

In total, using these rough calculations, this plan would cost approximately the same as Ted Cruz’s plan, which was estimated to create 4.2M jobs, but still costs around $700B over the next ten years.  However, the enhanced Repatriation benefit (which was not even valued in the Tax Foundation’s analysis of the Cruz plan), the US-Investment based lower Business Transfer Tax incentive, the Rental Income Tax Repeal, and the higher Standard Deduction will all drive economic growth at the very beginning of this plan, and should make up more than the $700B deficit over the next ten years.  As with any tax plan, this would need to be implemented in conjunction with spending cuts to offset any potential cost of the plan, if it were found not to be overall neutral.

This is the type of innovative tax plan that will allow us to boost Innovation, drive U.S. Economic Growth, reduce the size of the IRS, and lower taxes across the board for every citizen.  It would be hard to implement, but the benefits would be felt for years to come.

 

2016 Presidential Election Preview: Grading The Top 11 Potential Republican Presidential Candidates


Here is a look at the best 11 candidates that the Republican Party has to offer. I have graded them based on their social views, fiscal views, potential grassroots momentum, potential establishment support, their total candidate grade, their likelihood of winning the primary, and their overall likelihood of winning the general election.

Please feel free to discuss/argue/debate my opinions in the comment section, I would love to dive deep on each of these candidates before I decide who to endorse, and I want to hear from you folks!

 

Mike Huckabee

Background: Former Arkansas Governor, Former Preacher, Former Television host

Social Issues: B+ – Strong on Abortion, Crime, and the 2nd Amendment, moderate on Immigration

Fiscal Issues: A – Supports the Fair Tax, and fiscal reform

Grassroots Momentum: A – Fox News Republican base would get behind him, so would Evangelicals

Establishment Support: C – Backed out to let Mitt take the nomination, some will respect that

Total Candidate Grade: A- – Great candidate if he decides to run, needs to declare early and run hard

Likelihood of Winning the Primary: 16%

Likelihood of Winning the Election: 8%

 

Jeb Bush

Background: Former Florida Governor, George Walker Bush’s Brother, George HW Bush’s Son

Social Issues: B – Strong on Abortion, Crime, and the 2nd Amendment. Moderate on Immigration.

Fiscal Issues: D – Willing to negotiate on taxes, careful entitlement reform, big spender

Grassroots Momentum: B – Big brand name, moderates in the party will rally behind him in primary

Establishment Support: A – GOP looking for best chance to win moderates will rally around Jeb

Total Candidate Grade: B+ – Swing State Gov + moderate on immigration/entitlement + big spender

Likelihood of Winning the Primary: 15%

Likelihood of Winning the Election: 7%

 

 

Rick Perry

Background: 4-Term Texas Governor

Social Issues: A – Strong on Abortion, Crime, Immigration, and the 2nd Amendment

Fiscal Issues: A – Called Social Security a Ponzi Scheme, supports the balanced budget amendment

Grassroots Momentum: B – Republicans like Texas Republicans, and he is right on the issues

Establishment Support: D – Needs to shed the “dumb” label from 2012, but can overcome that

Total Candidate Grade: B – Needs to convince people he is intelligent, but he has the whole package

Likelihood of Winning the Primary: 14%

Likelihood of Winning the Election: 6%

 

 

Marco Rubio

Background: Florida Senator

Social Issues: B – Strong on gun rights, and crime, moderate on Immigration and abortion.

Fiscal Issues: A – Strong on tax reform, entitlement reform, and good on budget issues

Grassroots Momentum: B – Latino candidate that people can believe in, could unite party

Establishment Support: B – Strong choice if Jeb is out and Dems are leaning towards Hillary

Total Candidate Grade: B- – Swing State Senator on the right side of every issue for mainstream America

Likelihood of Winning the Primary: 11%

Likelihood of Winning the Election: 6%

 

Scott Walker

Background: Wisconsin Governor

Social Issues: C – Strong on Abortion, gun rights, moderate on Crime, and weak on Immigration.

Fiscal Issues: B+ – Union Buster, strong on budget, light experience on federal fiscal issues

Grassroots Momentum: B – Anti-union crowd hero, survived Recall vote, strong candidate

Establishment Support: A – Fiscal Conservative with good track record, could gain momentum

Total Candidate Grade: C+ – Swing State Governor with guts/determination, don’t count him out

Likelihood of Winning the Primary: 9%

Likelihood of Winning the Election: 5%

 

Rand Paul

Background: Kentucky Senator, Former Doctor

Social Issues: B+ – Strong on Abortion, gun rights, moderate on Crime and Immigration.

Fiscal Issues: A – Strong on reducing spending, entitlement reform, and endorses the flat-tax

Grassroots Momentum: A – Daddy’s fans, plus he won a lot of support with his filibusters

Establishment Support: B – Reasonably conservative candidate with a brand name and moderate ideas

Total Candidate Grade: C+ – He would be #1 here if he was a governor with 4+ years of experience…

Likelihood of Winning the Primary: 8%

Likelihood of Winning the Election: 5%

 

Paul Ryan

Background: Wisconsin Representative

Social Issues: A – Strong on Abortion, gun rights, Crime, and Immigration.

Fiscal Issues: A – Advanced multiple balanced budgets to congress looking for 5+% bump in revenues

Grassroots Momentum: B – Lots of name recognition, newest budget talks could spark discussion

Establishment Support: B – Lots of establishment money spent on Romeny/Ryan, could continue

Total Candidate Grade: C- – Swing State Representative with budget chops, could leverage debt crisis

Likelihood of Winning the Primary: 8%

Likelihood of Winning the Election: 5%

 

John Kasich

Background: Ohio Governor, Former Representative

Social Issues: A- – Strong on Abortion, Crime, and the 2nd Amendment, and Immigration

Fiscal Issues: A – Supports lower taxes, lower spending, and entitlement reform

Grassroots Momentum: B – Would build momentum if he can tell his balanced budget story

Establishment Support: D – Very little support in 2000, he would need to improve on fundraising

Total Candidate Grade: D – Swing State Governor with top-rate credentials, just needs to raise cash

Likelihood of Winning the Primary: 6%

Likelihood of Winning the Election: 3%

 

Chris Christie

Background: New Jersey Governor, former US Attorney, former Lobbyist

Social Issues: D – Flip-flopped on Abortion, semi-weak on immigration, very weak on 2nd amendment

Fiscal Issues: C – Good on tax reform, great on entitlement reform, weak on replacing taxes with fees

Grassroots Momentum: B – BridgeGate slowed down the momentum, but still has a lot of fans

Establishment Support: B – Well known, lots of wall street money behind him, good establishment choice

Total Candidate Grade: D- – Primary will be tough, lots of baggage to overcome, no huge upside

Likelihood of Winning the Primary: 6%

Likelihood of Winning the Election: 2%

 

Rick Santorum

Background: Former Pennsylvania Senator, Former Representative

Social Issues: A- – Strong on Abortion, Crime, and the 2nd Amendment, and Immigration

Fiscal Issues: A – Supports lower taxes, lower spending, and entitlement reform

Grassroots Momentum: B – Some fans left from 2012, but his fan base will always be limited

Establishment Support: C – Fought Mitt to the end, wasting his money, people will not appreciate that

Total Candidate Grade: E – Strong conservative with little chance of winning the entire election

Likelihood of Winning the Primary: 3%

Likelihood of Winning the Election: 1%

 

Ted Cruz

Background: Texas Senator

Social Issues: A – Strong on Abortion, gun rights, Crime, and Immigration.

Fiscal Issues: A – Supports single-rate tax, entitlement reform, and smaller government.

Grassroots Momentum: A – Hardcore Republicans love him, he will have a following

Establishment Support: D – Never met anyone who thinks he can actually win the nomination

Total Candidate Grade: F – Newby who has a reputation for being extreme, no name recognition

Likelihood of Winning the Primary: 2%

Likelihood of Winning the Election: 1%

 

How would a CEO fix America?


CEOs are overpaid, profit-hungry, shareholder-beholden, monsters of society….Right?  Right?  Right?

But, have you ever thought about how a CEO might tackle America’s budget issues?

Certainly, a company with America’s track record would have gone bankrupt years ago.  Shareholders would have expected that the company would have brought in a brilliant CEO mind to engineer a turnaround by now…But, what would that CEO do if they had to turn this ship around?

Here is the answer, brought to you straight from CEO 101:

1)       Cut fixed costs

2)      Increase prices

3)      Institute a poison pill

4)      Sell off unprofitable assets

5)      Pay down debt, increase cash flow

 

1)  Cut Fixed Costs

This is a must-have in any business turnaround.  You must first cut down our fixed costs, so that when you manage to increase revenue, the effect is exponential.  In order to cut costs, America would need to reduce its federal salaries, and entitlement programs immediately.  Programs like Social Security, Medicare, Welfare, along with federal government salaries, account for around 60% of the annual budget.  By cutting these programs/salaries by 15%, the United States would save around $315 billion/year.

2)  Increase Prices

The Federal Government collects approximately $2.77 Trillion in tax revenue each year.  If the Federal Government were to increase tax collections by 15%, they would net an additional $415 Billion/year.  One could spend years arguing the best way to administer this tax increase, but let’s assume that since over 50% of people don’t pay federal income tax, and 10% of people can afford to pay more, that we find some solution that makes it so everyone can survive while letting the government keep its head above water.

3)  Institute a “Poison Pill”

Many Corporations institute poison pill initiatives, to ward off competitors with evil agendas.  The United States should do the same.  Instead of Obama’s plan, which decimates the military, we should look to strengthen the military while cutting in all other areas.  By cutting the Nuclear Arsenal, while cutting some new weapons systems, and reforming command, support, and infrastructure, the armed forces could save approximately $500 Billion over the next ten years, or $50 Billion/year.  Today, we spend about $150 Billion/year on salaries for around 1.4 million soldiers.  If we reinvested the $50 Billion/year into more soldiers, we would be sitting at over 2 million soldiers, which would put us on par with China as the world’s largest military.  In one budgetary move, we could provide employment to 800,000 Americans, and put ourselves back on the map as the world’s largest military in a revenue-neutral move.

4)      Sell off unprofitable assets & defund unprofitable business units

The Federal Government owns approximately 650 million acres of land, appraised at around $2000/acre, equals a sum of $1.3 Trillion.  If the government were to unload the worst 33% of the land, it would net around $400 Billion, along with lowering expenses significantly.

We spend over $70 Billion/year in foreign aid, $17 Billion/year on NASA, $30 Billion/year in agriculture subsidies, $48 Billion/year on the department of education, and $13 Billion/year for the IRS.  That would total about $175 Billion/year.

5)      Pay Down Debt

We spend about $415 Billion/year in interest on your national debt.  By making the aforementioned cuts, we would save approximately $900 Billion/year.  This would allow us to pay off around $350 Billion of National Debt each year, which would account for an additional $10 Billion/year in interest expense.

Where would we be if the Government took these steps?

Today, we stand at $17.75 Trillion in debt.  If the Federal Government took these steps, we would reduce the debt by $360 Billion/year.  Even with this dramatic effort, we would still likely not be debt-free for approximately 50 years.

Clearly, it is time that we bring in a “fixer” who can set this country on the right path.  While 50 years is a long time to recover, it is better than the trajectory that we are on.  There are many things that can speed up the recovery, such as entitlement reform/dismissal, or temporary tax spikes, but the overall goal needs to be having a smaller central Government with less taxes and less fixed costs going forward.

How to beat a Liberal in an argument: Debunking the 5 biggest myths about minimum wage workers


As 13 states plan to increase their minimum wage in 2014, I thought it would be a good time to debunk five of the most common minimum wage increase arguments that your Liberal friends are likely to throw at you this year:

Myth #1:  “Tons of families are affected by raising the minimum wage”

Fact:  Only 1% of hourly-wage workers in America are married people making minimum wage

Myth #2:  “Most min. wage workers are working two jobs, tons of hours, and can’t make ends meet”

Fact:  Only 2.6% of minimum wage workers are working over 40 hours/week

 

Myth #3:  “Young workers make up a tiny part of total minimum wage workers”

Fact:  People under the age of 24 make up over 50% of all minimum wage workers

 

Myth #4:  “Minorities are hurt more by low minimum wages than white people”

Fact:  White people make up 79% of hourly-rate employees, and 78% of min. wage employees

 

Myth #5:  “Over 3 million people make the minimum wage”

Fact*:  Only 1.6 million people actually make minimum wage, the rest make tips on top of their wage, but are included in the min. wage numbers that Liberals love to quote

 

*Author’s Note:  I used the 3.5M figure for all previous stats, so that you could still make apples to apples arguments with your Liberal Friends

2013 Fast Food Workers Strike 1

2013 Fast Food Workers Strike 1 (Photo credit: Stephen D. Melkisethian)

Calling all Conservatives: Would you rather vote for the GOP, or this new Political Party?


Ever since the Tea Party emerged onto the Political Scene, True Conservatives have been looking for a home to call their own.  The traditional Republican Party has not welcomed us, as the Tea Party has had mixed reviews in the Main Stream Media.  Joining the existing third parties have not been effective, because it is hard to gain meaningful election wins without a major party.  In addition, no one has been able to properly define what a typical “Tea Party Voter” is, so the part has been unable to mobilize nationally.

What if we could change all of that?  What if we could define the ideals of the Tea Party in an easy-to-understand manner, which allowed a very conservative party to cast a wide net of support?

What if we were able to draw supporters of the right-wing Republicans, Fiscally-Conservative Democrats, along with the support of 3rd parties like the Constitution Party, the Natural Law Party, and the Libertarian Party?

What if we had 3 simple rules.  As long as you could follow those rules, you could be a member of the party, and the national party would support your candidacy?

What if the new party’s only three rules were:

1)  Protect the Bill of Rights, and the Constitution of the United States of America

2)  Reduce Tax liability, drastically reduce spending, and work to reduce the National Debt

3)  Social issues should be decided by the 10th Amendment, and all views are welcome within the Party

Can anyone reading this blog post think of a reason why such a party would not garner significant support?  You have a party who protects the Constitution, a party which lowers federal spending, lowers overall taxation, and lowers the National Debt.  And, finally, you have a party who allows you to believe what you want on Social issues, as long as you believe that the individual state legislatures, or that state’s population, should get to decide on the legality of those issues.

This party would allow for a far-right-conservative to vote for a candidate, while at the same time allowing for a Moderate Democrat to vote for the same candidate.  This party could theoretically attract folks from the Constitution Party, while also attracting folks from the Green Party.  In short, a Constitution-protecting candidate, with the latitude to support what social views they want, so long as they support the 10th Amendment, could garner a wide-range of political support.  This party could provide the true third party that the country has been looking for since the days of the Whigs in the mid-1800’s…

For argument’s sake, let’s give this Political Party a name:  The Founder’s Party

If “The Founder’s Party” existed today, could you see yourself voting for them?

Would you be okay with a person who agreed with you on 90% of the issues, but believed the other 10% of the issues should be settled by the representatives of that state, or the people of that state?

How do we go about consolidating the third parties in this great nation?  How do we garner support in the traditional deep-pocketed political machine?  Once a third party has gained credibility, how do we convince them to abandon their specific cause and join our movement to create a true third option in U.S. Politics?

Please share this article if you would like to see such a party enacted in this country!  Thanks!

 

English: William Blount. Signer of the Constit...

English: William Blount. Signer of the Constitution of the United States of America. Deutsch: William Blount. Unterzeichner der Unabhängigkeitserklärung der USA. (Photo credit: Wikipedia)

 

 

Debunking the “Affordable Care Act” Myth & the complete disregard for the 10th Amendment


ObamaCare was passed as the “Affordable Care Act”.  Now, as people are seeing their revised Health Care Plan for the first time under the new law, we are realizing just how misleading the title of that law really is…

According to a CNN Poll, only 35% of people now support ObamaCare, while 62% oppose the legislation.  That is the lowest level of support the law has seen yet, and it coincides with everyone getting information about their new 2014 health care plans at work.

This massive drop in support has to do with two major issues:

1)  People are realizing that the cost of their insurance is going up…not down

2)  People are realizing that their insurance is changing, when the President said it would not

On the issue of the cost going up, the most glaring statistic is that 42% of people now say that they will be worse off under their new Plan, which is a stunning indictment of what was supposed to increase “Affordable Care”.  In addition, despite the 35% of people who still support the legislation, only 16% admit that they will actually be better off with ObamaCare than they were previously.  That means that we are paying over $2.6 TRILLION in government funds, along with paying higher premiums on our own policies, to help only 16% of the population…

On the issue of you being able to keep your own health plan if you like it, they now estimate that 15 million people have lost their current insurance, and over 100 million people will have their work insurance altered due to the new law.  The CNN poll states that 35% of people say that they will have to change their doctor due to the implementation of ObamaCare.

The truth about ObamaCare is finally coming out, and the revolution against this overreaching legislation has just begun.  My own policy premiums did not change, but I now have to lose weight in order to recoup the financial benefits that I used to gain by performing a certain number of activities (physicals, classes, exams, etc) each year.  I believe that the 10th Amendment (“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people”) should protect people from Government-mandated weight loss, but that is just me and it stems from my silly strict constructionist views that we should protect and honor the Constitution that governs this great country…

Please help us replace the current Senate and drive ObamaCare from the history books in 2014!

Barack Obama signing the Patient Protection an...

Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

Attention Gen X & Gen Y: Sign this petition to save $120,000 (and Social Security)


closeup of US Social Security cards

closeup of US Social Security cards (Photo credit: SalFalko)

We are urging all Gen X & Gen Y taxpayers to sign the following petition:  http://wh.gov/l8s3E

According to the Social Security Administration, Social Security will be insolvent by 2033.  This means that if you were born after 1968, you will likely never receive a check from Social Security, yet you will continue to pay taxes to fund the retirement of others who paid far less than you will.

What Does That Mean For You?

If you are an average Joe/Jane, you probably make around $50K/year.  You will end up paying approximately $120,000 into Social Security before it goes belly up in 2033 (including your employers contributions).  You will get exactly 0% return on that investment, since you will never see a Social Security benefit check in your lifetime.

If you are a successful Gen X or Gen Y business person (or you think you will be in the near future), you could pay up to $500,000 into the Social Security system between now and 2033 (counting your employers contributions).  You will pay over $500,000 into an entitlement program that will never pay you a dime in return!

Ready to sign the Petition yet?  Click here:  http://wh.gov/l8s3E

Why Are Employer Contributions Important To Consider?

First of all, if you are self-employed, which many of the affected folks are, then you pay both the employee and the employer contribution.  Second of all, Employers pay over $400 BILLION dollars into the program each year.  This is money that could be given back to the employees in raises, given back to the consumers in lower prices, or given back to the shareholders in higher stock prices.  All of these affect YOU more than Social Security ever will, since you will NEVER receive a Social Security benefit check.

I assume that you are ready to sign now?  Click here:  http://wh.gov/l8s3E

This is a follow-up to my article on why Social Security should be labeled a Ponzi Scheme:

https://toddhagopian.wordpress.com/2013/12/02/gen-y-social-security-the-ultimate-ponzi-scheme/

In today’s article, I am targeting my comments directly at the people who the politicians are hurting most by not reforming the popular entitlement program.

Attention Gen YYOU need YOUR help to stop this from happening!

Sign this petition (http://wh.gov/l8s3E), share it with your friends, post it all over Social Media, and make a difference today!

 

 

Gen Y & Social Security – The Ultimate Ponzi Scheme!


Ponzi circa 1920

Ponzi circa 1920 (Photo credit: Wikipedia)

Franklin D. Roosevelt delighted progressives around the country when he signed the Social Security bill in 1935.  In 1944, Ida Mae Fuller got the very first Social Security check, valued at $22.54.  Ms. Fuller, bless her heart, is going to be a critical piece in my argument against social security.  You see, a Ponzi scheme is basically a scheme where the very first investors make a very high return on their investment, and those who get in last lose all of their money (while their money goes to making the initial investors even more money).  Ms. Fuller is not a bad person, she just happens to be caught on the wrong side of history, thanks to an easy-to-pass, but impossible-to-manage piece of legislation:  Social Security.

To help make my point, let’s look at Ms. Fuller’s return on investment:

Ida Mae Fuller paid a total of $44 into the Social Security program, yet she received $20,993 in benefits.  That is a fantastic 47,475% return!

Personally, I will pay over $500,000 into Social Security, and I will never see a dime in benefits…

The Social Security Administration believes that the funds will run out in 2033, or 20 years from now.  I am a successful Gen Y business person.  Even if I forget about what I have paid up until today, I will pay over $500,000 in Social Security taxes (including my employer’s contributions on my behalf) over the next 20 years, before Social Security goes belly-up.  If I had enjoyed Ms. Fuller’s rate of return, I would receive approximately $238 Million in Social Security benefits…But, since Social Security is an enormous Ponzi Scheme, I will receive no money at all…Zero dollars.

The Government introduced Social Security just 13 years after Charles Ponzi was convicted for the largest Ponzi Scheme that the government had ever seen (prior to Bernie Madoff’s scheme in 2008).  Evidently, they had learned enough from Mr. Ponzi, that they thought they could continue getting elected in the short-term by introducing a Ponzi Scheme into National Politics.  The Democrats held the White House for an unprecedented 20-year span from 1932 – 1952.  No party had held the White House that long since 1827, and no party has held the White House longer than that run since then…so, apparently this Ponzi Scheme worked…

The biggest shame of all, is that people have known that this piece of legislation was flawed for years and have done nothing about it.  President Clinton investigated significant Social Security reform in the 90’s, which would have given individuals private accounts for their money to be saved in.  President Bush offered similar ideas, and pushed hard for their passage.  President Obama has offered no new ideas, and has taken entitlement program reform off of the table for all of the recent budget negotiations.

Apparently, since he won’t be president in 2033, this problem doesn’t need fixing…

Back to the point…The very first “investors” in Social Security made a 47,475% return…But, I will waste $500,000 on a program which will never pay me a dime…

How is this not a Ponzi Scheme?

Why aren’t there marches on Washington on this issue?

How is this not the #1 issue for Gen Y at the Ballot Box every year?

Attention Gen Y

Until we band together on this issue, we will never be heard.

Until we demand an answer, politicians will continue to avoid the third rail of politics.

Until we pool our votes together, we will never be powerful enough to force a policy change

What Should We Do Now?

Share this story on Social Media, talk about it at the dinner table, and be passionate about the issue!

Send a letter to your representative, tell them you will never vote for them again unless they fix the issue!

Demand a candidate with ideas, demand a candidate with answers, DEMAND A SOLUTION…NOW!

ObamaCare – 5 Biggest Lies Told To Pass This Law, and to Reelect The President


Official photographic portrait of US President...

Official photographic portrait of US President Barack Obama (born 4 August 1961; assumed office 20 January 2009) (Photo credit: Wikipedia)

The Affordable Care Act, or ObamaCare, will turn out to be one of the most controversial laws in the history of the United States.  President Obama managed to win a second term based on all of the promises made surrounding ObamaCare, and those promises are rapidly being broken before the law is even fully-implemented.

Here are the five biggest lies that the President told in order to get this law passed, and in order to get reelected:

“If you like your insurance, you can keep it.”

15 million people have lost their insurance.  But, that is not even the biggest part of this lie.  It is estimated that over 100 million people will have their current policies altered by their employers due to ObamaCare changes, which means almost no one gets to keep the insurance that they liked just fine before.

“Let’s be clear, we’re not going to delay the Affordable Care Act”

This was a quote from hours before the government shutdown, for which the Republicans were widely blamed.  A few weeks later, the ObamaCare rollout had gone so badly that Obama reversed course.  It turns out that the Republicans were right, and it was Obama who could have avoided the Government Shutdown, not the other way around.

“Anyone making under $45,960 will qualify for an upfront tax subsidy.”

Anyone making under 4 times the poverty level was supposed to get an upfront tax subsidy.  CNN reports that in the largest cities in nearly every state, many people will not qualify for the subsidy.  For example, a person living in Chicago making $27,400 will not qualify for a subsidy.  A person in Nashville making $25,500 will also not qualify for a subsidy.  Some lies are small, this one is a pretty big one.

“I will not sign a plan that adds a dime to our deficits.”

Obama’s original promise was that the plan would cost $900M over ten years, and the savings would just barely cover those costs, so the plan was breakeven.  Since then, the estimated cost of the plan has ballooned to $2.6 Trillion.  Unfortunately, the revenue has not gone up, so there is no way that this law does not significantly add to the national debt.

“Under my plan, no family making less than $250,000 per year will see any form of tax increase.”

The only reason that the Democrats avoided a filibuster was by using a process called reconciliation, which is specifically only used for budget bills.  There are tons of taxes, and fees, built into ObamaCare.  Examples include the medical device tax, the mandate tax, and harsher penalties on Health Savings Account withdrawals, among others.

$50,000 of income and $315,000 in Credit Card debt – What are you thinking???


Government spending

Government spending (Photo credit: 401(K) 2013)

I think that we can all agree that if we had a friend who only made $50,000 each year, but had $315,000 in credit card debt, we would be worried about that person’s mental health…

If they asked you for help, would you recommend that they work 6 jobs so that they can continue spending the same amount of money and never get out of debt?  Or would you recommend that they take on one extra job while drastically reducing their spending while trying to pay off their credit cards?

Of course, you would likely do the latter.  When you have a spending problem, it is okay to want more income, but controlling your spending is an absolute must in order to get your house back in order.

If the United States Government was a person, they would be this person!

Unfortunately, our government has chosen neither of the options outlined above.  They have basically taken on a few extra hours at work (in the form of more taxes) while deciding to spend even more than ever before (in the form of ObamaCare).

The Democrats have decided that they do not want to cut spending, because they think they can raise enough taxes to get out of this mess.  Here is the truth, they could raise everyone’s taxes by 25% right this second, and use that money solely to pay off the debt, and it would still take 15 years to get back to even.  That doesn’t even count the Trillions of dollars they are adding to the debt each year.

Conclusion:  The debt is too big to tackle by raising revenue without cutting spending.

The Republicans believe that we can stop cut spending, without raising taxes, and get this mess under control.  Here is the truth, in order to make this work, the government would have to cut 90% of its spending for the next 20 years in order to achieve this goal.

Conclusion:  The debt is too big to tackle by cutting spending without raising revenue.

The sooner we can all agree to these simple facts, the sooner we can help our dysfunctional friend get back on their feet.

We do not need conservatives, we do not need liberals, we just need people who know how to do math.  Anyone out there fit that description?

If so…Please, Please, Please run for congress!

This is not about political parties, this is about a person who is riddled in debt looking themselves in the mirror and deciding that today is the day to stop living a lie.  Today is the day when they cut back on what they can live without.  Today is the day when they decide to spend more of their time working hard to make some more money so they can pay off some of their debt.  Today is the day to make a plan, execute a plan, and endure some tough years on their way to achieving the American Dream.

If they don’t, the American dream as we know it will not be available to any one of us in the future…

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