Our Founding Fathers conceived our republic as one without taxes on income or
wealth operated by a small central government. They believed that government was
always the problem, never the solution. They believed that the citizen, able to
earn and invest their own money free of government interference, would always,
through free market competition, achieve greater prosperity than any
government-directed policy could ever do.
Unfortunately Americans have been on a holiday from those philosophical roots
for almost a century. It all started going in the wrong direction with the
passage of the 16th amendment and the imposition laws to tax incomes
in 1913. Then came a serious flirtation with communism/socialism/New Deal
policies in the 1930’s. With the advent of World War II income tax rates were
hiked to 91% on incomes over $50,000.
Shortly after the war the modern conservative movement was born – a movement
to return to the economic principles of our Founders. It would be a long hard
climb.
Strangely enough a Democrat got that movement going. President John F.
Kennedy dropped the top income tax rate from 91% to 70% in 1962. However, it
wasn’t until "conservative" Jack Kemp led the charge in the early 1980s to drop
that rate to 28% that the American people started again to believe in the no-tax
principle of our Founders. They saw for themselves that income tax receipts at
the Federal level doubled in a mere seven years. Given an incentive, the
American people delivered. Those Founders knew a thing or two about people and
economics.
The Democrat Party derisively called this supply-side tax reduction
"trickle-down" economics because the investment of those tax savings would
create businesses and jobs the economic benefits of which would trickle down on
ordinary Americans. After 25 years, America has the richest poor people on the
planet but when compared to America’s rich, there is no comparison. Trickle-down
disproportionately favored the rich – and America is filthy rich.
Unfortunately the poor and middle-class in this country believe the policies
of modern conservatives have failed them and are seeking a way to participate in
the American Dream that has so far eluded them.
In 2008, the American people are ready for a "change". They are so desperate
for a change they listen to a man and a philosophy which promises more poverty
and reduced expectations because his sole tool to effect change is to take money
from the rich which is usually invested in new businesses and jobs and they want
to take that investment capital and distribute it to the poor and middle-class.
As those monies are just spent and not invested, America suffers from the lack
of investment capital in its own economy.
Unfortunately that failed philosophy of trying to buy ourselves out of
poverty has never worked. Spending money only makes us poorer. Investing money
makes us richer. This reality escapes notice from a population programmed to
rely on its leaders to head them in the right direction.
So it is up to the modern conservative to create an economic theory that will
enable ordinary Americans to achieve the American Dream in the same way the rich
did with "trickle down". In order to achieve that goal it becomes necessary for
the American economy to soar to heights heretofore thought unattainable. We at
the Ownership Society Institute believe we have perfected that plan. We call it
the Rise Up America plan and it is built on the –
Rise Up Theory of Economics.
The author of that theory, Dick McDonald, is not a classically-trained
economist but a tax man who spent his working life helping rich people get
richer. He has turned his attention in Rise Up to the poor and middle-class. His
theory is constructed to do for them what Rise up did for the rich – to make
them wealthy but without the necessity of having the educational tools to make
the big bucks - if they are just stable and industrious the American Dream will
be theirs.
In order for the poor and middle-class to become rich they need a pool of
capital to invest in the world’s most profitable investment vehicle – the
American economy. As it is counter-productive to take from the rich and deplete
the country’s investment capital, it was necessary to find a new source of
capital to fund each person’s pool of capital.
Fortunately for Americans, the new source of capital OSI identified is now
being wasted in supporting the government’s entitlement industry. In fact by
diverting the payroll taxes (currently running at $1.3 trillion a year in
support of entitlements) into personal investment accounts owned by the taxpayer
and then immediately invested in stocks and bonds on his or her behalf the
average household in America making $40,000 a year will generate a $3.2 million
nest egg during their 40-year working life and retire with a $27.000 a month
retirement check (all in 2008 dollars).
Ordinary Americans are now investing 15,3% of their lifetime income in
payroll taxes (if employed half is paid by their employer). That $40,000 a year
household has $6,000 paid to the government every year. That $6.000 a year
invested for 40 years generates a $3.2 million nest egg at a 10% rate of return.
The S&P 500 stock index has been averaging 12.8% for the last 30 years. As
any investment broker will tell you long-term investments in stocks are
golden.
Making ordinary Americans achieve financial independence is the American
Dream. Rise Up delivers that dream and restores the self-reliance of individuals
our Founders wrote into our Constitution. Rise Up doesn’t rid us of all taxes on
income as our founders envisioned, but it will embolden ordinary Americans to
again believe in the power of the individual and reject the current dependence
they have on their government.
If for no other reason, the investment of payroll taxes in the American
economy will accelerate the wealth-producing capability of the country so
dramatically, that old standards of success will have to be rewritten. The 170
million households today worth $54 trillion would have been worth over $500
trillion today had Rise Up been in place for the last 40 years. For every day we
retain the present inefficient pay-as-you-go method of funding entitlements is a
day we lose in making ourselves a happier and more prosperous nation.
The benefits inuring to ordinary Americans and our Republic by enacting Rise
Up are numerous. The national budget would be cut in half, the tax load
Americans are asked to carry will be cut in half, the $45 trillion of unfunded
debt would be immediately extinguished as would $4 trillion of our $9 trillion
national debt, the entire public and private "retirement" industry including
Social Security, Medicare and 401(k)s could be eliminated.
The list of benefits are numerous and can be reviewed in the Mission
Statement on the website www.riseupamerica.us as can many tables, graphs and
material in support of the Rise Up America plan.
The immediate objection to a plan that would annually divert $1.3 trillion
into the stock market and still guarantee to pay $1.1 trillion in existing
benefits under the old plans in perpetuity is – "where are you going to get the
money to do both?". The Rise Up plan has solved that problem and in the process
will improve the stability and value of the US dollar as well.