Family Really Matters
by Dick McDonald
It is sad commentary that so little attention is paid to strengthening the family unit in today’s warp-speed world. The family is the basic building block of all civilizations yet today fewer and fewer women are having babies and those that do are shrinking in numbers. In Europe the problem has become genocidal as couples are not having enough babies (minimum replacement is pegged at 2.1 babies per couple) to even replace themselves. In some countries the rate of replacement has fallen to 1.2.
As the leader of the free world in so many categories, the USA is presently just keeping its head above water birthing 2.1 babies per couple. The trend, however, appears headed lower. The question is what can be done about improving these downward spiraling demographics. As this is primarily a problem of modern western societies, the USA should lead the way in restoring the family to prominence and reverse the impending demographic disaster.
The Ownership Society Institute (OSI) believes it has the answer. Were women secure financially in staying home to rear their kids and grand kids, a big family and the joys of having one would not only become more attractive but possible. Unfortunately our laws, policies and economics are presently stacked up against the creation of big families.
What if we change the laws and policies to allow women to stay home, never work a day in their entire lives and guarantee they retire a millionaire? Sound crazy? Just stick with me a moment longer.
Politicians, the media and the public focus discussions almost exclusively in economic matters on income taxes - raise taxes on the rich – lower taxes on the rich. Candidates for President are exclusively focused on income taxes, e.g. the Fair and Flat Tax proposals and the income disparity issues. OSI wants to refocus attention to the real snake in the woodpile –payroll taxes.
OSI does not want to destroy Social Security, Disability and Medicare but merely change the way those worthy projects are financed. In the process women will become financially emancipated, among many other benefits emanating from such a change, This is how it works.
Today 15.3% of the income of working Americans (up to $97,500) is taken by government as payroll taxes. The self-employed pay the entire 15.3%, employees split that cost with their employers. An average household earning $40,000 a-year pays $6,000 a year in payroll taxes. In return for that $240,000 40-year lifetime investment the government gives the taxpayer a $1,122 a-month retirement check and no nest egg to will to his kids. Under Medicare most old-age medical costs are also covered.
Under OSI’s Rise Up America plan the entire $240,000 is placed in a personal investment account owned by the taxpayer and deposited weekly over a 40-year working life to grow into a $3.2 million nest egg. This computation was made using the average rate of return experienced by the S&P 500 stock index (actually the 10% rate used in computing the $3.2 million is less than the 12.5% actual rate experienced in the last 25 40-year periods.) Just the income off that nest egg will generate a monthly retirement check of $27,000 ($3.2 million @ 10% divided by 12 months).
One can find all about the feasibility of this plan and the tables proving various nest egg accumulations at www.riseupamerica.us as well as ways you can assist in seeing to it that this change in funding entitlements is enacted. But let’s get back to the family and how Rise Up America benefits the family and makes the stay-at-home mom a millionaire.
Rise Up proposes that one-half of the withholding of payroll taxes (in the future that 15% deposited into personal accounts) from your spouse is credited to your personal account. In the case of the stay-at-home mom in the above mentioned case she would end up with a $165 million nest egg and a monthly retirement check of $13,500. Her husband would have the same amount in his account and an identical monthly retirement check.
OSI believes that its plan will be a stabilizing influence on the family because it secures its most important element – the mother. She will, during her lifetime, watch her personal account grow and find comfort in the financial security it provides. It will allow she and her husband to consider the joys of having a big family and how that will not only provide them comfort in their old age but a lifetime of joy rearing them. At the same time they will be doing their patriotic duty to reverse the looming demographic disaster. As an added benefit, they can spend all their lifetime income (after taxes) on their kids and still retire millionaires.
Under the Rise Up America plan all obligations under the old entitlement programs would be honored and exempted from reduction of benefits by Congress and such monthly checks and Medicare benefits guaranteed by the government.
In addition, all unfunded entitlement liabilities would be extinguished; the national budget cut almost in half; the need for millions of pension plans eliminated; the biggest tax cut in American history enacted; the largest infusion of funds into the capital market in history ($1.2 Trillion in the first year just from personal accounts); the wealth of the country and each citizen geometrically improved even for those without the tools to make the big bucks; and many more benefits enumerated on the website at the mission statement.
Under Rise Up the cost to transition from the existing programs to personal accounts can be painless, the cost to maintain them inexpensive and the risk to invest in the American economy non-existent over the working life of the participants. All this and more is covered on the website and in the free e-book offered there.
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