U.S. House of RepresentativesCandidate for District 20

The biggest problem confronting America domestically today is the $65 trillion Wealth Gap between its Rich and Poor.

The 78/22 Wealth Gap Ratio (as of 2020 the percentage ownership of the nation's $115 trillion Net Worth) is the undeniable source of what has become an increasingly "Violent Disagreement" between America's Conservative Right and it's Liberal Left.

To unite the country, our first priority in Congress therefore must be to establish a plan and more importantly the “Political-Will” to reduce that Wealth Gap Ratio from 78/22 today to not more than 60/40 by 2045.

Realization of this highly achievable, albeit ambitious 2045 goal, will nearly double the relative ownership of the Working Poor and Middle Class (80% of the projected 400 million population) during the 24-year period ... while reducing the relative ownership of the Investor Class by less than 25%.  Please note: by 2045 if the National Net-Worth continues to grow at 7%, in 24 years it will be valued at $690 trillion ... a $575 trillion increase.

In other words, by 2045 there will be more than enough National Wealth for everyone to share and enjoy ... provided as people free to choose our own financial destiny ... we are also prepared to work for it.

Bottom-line: The "Genuine Pursuit" of this 60/40 Net Worth goal will change almost everything in America for the better ... almost immediately ... as we all begin to experience both a dramatic and arguably sustainable upward shift in what can best be described as our personal "Hope Coefficient" ... that measure of one's sense of well-being that rises and/or falls with one's level of optimism.

However, to solve the "Actual Wealth Inequality Problem" and the problems of poverty generally, Democrats must first support the "Personal Financial Right" of every individual to Save and Invest that 15.3% of their incomes that 89% of the workforce and their employers today pay as Payroll Taxes to fund the Social Security and Medicare needs of America's Retired Poor and Middle Class

The fact that Democrats as far back as Franklin Roosevelt have looked to "America's Working Poor' to underwrite the financial needs of the "Retired Poor"... from an economic perspective has always been utter financial folly.

ROBBING THE POOR ... TO SUPPORT THE POOR? ... only perpetuated “The Cycle of Poverty” that is now sure to negatively impact the lives of 48 million American households of every race, gender, color and creed who today earn less than $55,000 each year.  

REPUBLICANS:  From a political perspective, securing the right on behalf of the Working Poor to convert more than $1 trillion in Payroll Taxes over the next 25 years (estimated to be $35- $40 trillion for the period) into "Tax-Free Savings" invested in U.S. financial markets will ... among other things ... make the entire decades-long argument surrounding "Trickle Down Economics" ... "Politically and Economically Moot!"

Under this plan, as every worker in America ... Rich or Poor ... begins to share in this country's growth and prosperity, both as "Freshly Minted Capitalists" and as working members of a resurgent and vibrant Middle Class ... the retirement wealth to be generated by the accumulted investment of more than $35 trillion of repurposed Payroll Taxes ... in what should then be a $70 trillion economy ... can reasonably be expected to create by 2045 at least $135 trillion of "Forced Retirement Savings" for America's Essential Workers.  Which means tens of millions of these workers will then be well on their way to becoming financially independent.

Given the existing financial structure, resource availability, human capital and entrepreneurial spirit of the American people ... there is no reason that working together the people of this great nation by 2045 couldn't easily create an inflation adjusted $70 trillion economy ($23 trillion today) in a financial environment where the ratio of the nation's National Debt (130% today) to its then $70 trillion GDP is also 70% (Debt = $49 trillion).

To achieve those admittedly ambitious goals, the American voter, regardless of party, simply needs the Congressional leadership to agree today that "The 70/70 Proposition"... or a form thereof ... is now the 2045 target ... so that in the spirit of bi-partisanship 535 members of the House and Senate can then get busy with the business of legislatively doing what needs to be done every year to achieve the annual objectives in pursuit of the 2045 Goals.

THE BENEFITS

Realization of the annual Growth and Debt Management Objectives established in pursuit of the targeted "70/70 Economy" will likely see the Dow Jones Industrials, S&P500 and Nasdaq Market Indexes double in value at least every eight (8) years ... or at least three (3) times over the 24 year period. 

That means the Dow Jones Industrial Average (DJIA), trading as I write, at roundly 35,000 ... by 2045 can reasonably be expected to trade at 280,000 ... ...

… because that's the fourth-grade arithmetic that goes with the historical 9% compound annual rate of growth projected to be realized on invested capital in this quest for a 70/70 economy in 2045 ("Rule of 72").

DEMOCRATS: PLEASE GET OUT OF THE WAY!

Stop using this "Payroll Tax Capital Confiscation Policy” to rob 48 million American households and 72 million Voters of their God given right to live the American Dream by perpetuating a "Low Income Tax System" that strips these predominantly young American workers and their families of nearly $8,500 (15.3% x $55,000) of investment capital each-and-every year of a 40/50 year working career.

BECAUSE BY DOING SO ... YOUR POLICIES ARE NOT ONLY GUARANTEING THEIR NEAR POVERTY EXISTENCE DURING 30-40 YEARS OF RETIREMENT ... BUT ALSO THE POVERTY AND SOCIETAL DEPENDENCY OF THEIR CHILDREN AND GRANDCHILDREN ... AS YOU THEN BEGIN TO ROB THE NEXT GENERATION OF ESSENTIAL WORKERS TROUGH THIS "PAY AS YOU GO ENTITLEMENT FUNDING STRATEGY" OF THEIR FINANCIAL FUTURES.

DEMOCRATS:  This Economic And Financial Entitlement Funding Travesty Must End ... And It Must End Now!

REPUBLICANS: Again, the political, economic, social, and financial benefits to be realized by our party and more importantly by the nation by simply fighting for and then delivering the American worker another "Choice" over how … beginning with that first job at age 16 … their "Mandatory Retirement Savings" may be invested by them for 40/50 years of their working careers ... are frankly too numerous here to mention in the space provided.  

But, even though the benefits of "Worker Capitalism" far outweigh any cost of implementation, both political parties are going to lose something they structurally place great value on.  So, the 70/70 Proposition is not without its Political Cost.  

Please Note:  When these policy changes are implemented, Democrats in time will lose their political and financial control over America's Working Poor as these essential workers find themselves recognized, rewarded, and ultimately enriched in their new role as investors and therefore Capitalists … in what in the fullness of time for them will become a much fairer exchange transaction involving the real, true, and actual value of their provided labor and services.  

America’s steady growth and increasing prosperity through 2045 coupled with the individual financial participation of these employees through their investments in this upward march to the 70/70 Economy, will inevitably provide the financial returns required to reduce today’s 78/22 Wealth Gap Ratio in 25 years to 60/40 as the benefits of the nation's new shared prosperity are more fully distributed among all market participants across the economic and political spectrum.

Trickle Down Economics Works ... It Has Always Worked ... For Those With The Capital To Make It Work.     

That's “The Cost of Worker Capitalism” that Democrat Leaders have never been willing to pay.  Any attempt by Republicans to Privatize Social Security and Medicare to place more “Capital” into the hands of the Working Poor and Middle Class has always been met with strong opposition ... particulary from people like Hillary Clinton and Barack Obama. Why is that?  

ANSWER:  Because “Individual & Personal Prosperity” among the Working Poor eventually means losing “The Poor Dependent Vote” and more specifically the “Poor Inner-City Black Vote” making today’s political incarnation of “The Rainbow Coalition” and the Democrat Party a rather insignificant political force in American politics.

Without the "Politics of Poverty" the "Politics of Racism" is meaningless.   

For the Republican Leadership, “The Cost of Worker Capitalism” ... the cost of delivering on the promises of “The 70/70 Proposition” ... will be the 2700-page Tax Code they've been working on for more than 100 years to legislatively support the investor Class's conversion of 'Tax Dollars Into Investment Dollars" (Oh … how they do love to “Tinker With The Code”)

While it’s absolutely fair to say the Taxation Structure as represented by the Tax Code is arguably responsible for creating, at least in part, the $23 trillion economy that most Americans  benefit from ... it would also be disingenuous not to say ...

… the Tax Code is also largely responsible for creating the $30 trillion National Debt and the 78/22 Wealth Gap Ratio that now stands at the heart of this highly corrosive and destructive cultural war that all of America is today living through.

REPUBLICANS ... 'Sorry, The Tax Code Must Go" ... and with it the Washington lobbyists who for more than 100 years have now peddled their influence, interest, money, and power to give the American people "The Swamp" that most Conservatives agree is now the shame of our Nation's Capitol.

Would You Still Like To Drain This Swamp?  … I do.  

"Then stop feeding the snakes and other financial predators who live on the Tax Code.  Eliminate as much of the code as you possibly can.”

Revive and restore the Income Tax Protocols that were first established in 1913 when the American people agreed to support ratification of the Sixteenth Amendment ... on the understanding that Congress would then tax only the wealthiest among us … in-order-to service the federal debt and "Responsibly Fund" the business of the American people.

REPUBLICANS: It's a very simple question ... and the answer will tell you everything you need to know.

"In 1913 ... if all Congress needed was a four (4) page 1040 to generate and capture the taxes required from the wealthiest people in the country to service the nation’s debts and fund its operations... why then is the Tax Code today 2700 pages long?"

You know the answer.

My suggestion: Replace the Tax Code with "The 70/70 Proposition" ... Simple, Fair, Flexible, Highly Targeted and Very Cost Effective. You can learn more about it from the discussion below.

NOW ... A SHOUT-OUT TO EVERY VOTER EVERY WHERE IN AMERICA

There are 120 million workers in this country who … like 80-85% of you ...will earn less than $100,000 this year.

First Question:  Is there anyone else in the country today ... Left, Center, Right ... ARGUING FOR YOUR LEGAL AND MORAL RIGHT ... on legitimate economic, financial, accounting, and historical grounds ... to receive all of that “SUB-$120,000 INCOME FEDERALLY TAX FREE"?

Second Question:  More to the point ... FOR YOUR FUTURE FINANCIAL INDEPENDENCE ... and that of your children ... aside from me ... is there anyone arguing today that you should today be given THE CHOICE AND THE FINANCIAL CONTROL over how your Mandatory Retirement Taxes are to be invested so that you might also one day be both … HAPPILY RETIRED AND FINANCIALLY INDEPENDENT?

No?

Then arguably ...that makes me your new best friend ... doesn't it? :)

I believe America's mission is still all about building a culture of Self-Governance for ordinary people. Freedom, Faith, Family, Fraternity, Fidelity ... Funded by American Capitalism. These are the values that historically bound us together ... and I believe can still unite us ... as one people and one nation under God. And for my money, that's all it takes for anyone to be a "True American" ... of every race, gender, color or creed. Having heard my views on the Tax Structure, people often ask me if I'm a Republican or Democrat. My response is always the same ... Does it matter? I'm a registered Republican and a Conservative. But, more importantly I'M A TRUE AMERICAN with a "Hopeful Vision of what America can be in 2045" ... ... a vision that one day in the not too distant future we can once again drop all the qualifiers that were created by political interest groups to divide us ... ... and simply say "I'm an American" ... and that will say all that needs to be said. How about you? Are you also a True American with a hopeful vision of a far better future? If not, maybe I can help you with that. If so, perhaps "The 70/70 Proposition" is just the ticket to get us there. For a quick glimpse of a far more prosperous nation ... to be enjoyed by all Americans ... please scroll down to the third and final discussion and I'll share with you more of my thinking on the history, economics and financial rationale supporting the revival of the original 1913 Taxation Protocols, as well as the actual Six (6) Legislative Proposals at the heart of the 70/70 Proposition. Thanks.   By the way, do you know the difference between a 50/50 Proposition and a 70/70 Proposition? At least 40% .... :)

I’m a Teddy Roosevelt Conservative and Republican. Both TR and President Taft supported ratification of the Sixteenth Amendment in 1913.  However, that “Narrow Base Taxation Protocol” that targeted the incomes of High-Income Americans in 1913 is very different from the “Broad Base Tax Code” that targets in 2022 almost every worker with some Federal Income and/or Payroll Tax. That's why I'm a Teddy Roosevelt Conservative. What about you? Are you comfortable with who’s paying the taxes in America today?

MY PRIMARY GOAL: Revive the original 1913 Taxation Protocols. Tax "America's 15%" as originally agreed to fully fund the Operations and Entitlement Programs of the federal government. With the cost of Entitlements to be absorbed by the wealthy Investor Class ... then, share the growing economic prosperity with the American worker by supporting their individual right to then convert those still “Compulsory Payroll Taxes” into “Mandatory Tax-Free Investment Capital” … transforming these average working Americans into a class of "Working Capitalists".  In an economy that I suggest should grow to $70 trillion by 2045 (3% Real Growth, 2% Inflation) with a then 70% Debt-to-GDP Ratio, these suggested legislative tax reforms implemented by 6/20/23 will cause the Wealth Gap Ratio (WGR) to fall from 78/22 today to 60/40 in 24 years.  

PLEASE NOTE:    

The 1913 financial logic limiting the implementation of the Sixteenth Amendment’s tax on income to High-Income-Earners was as follows:

First, unlike America’s working class whose Median Household Income (MHHI) in 1913 was $750, proponents of the taxation strategy reasoned that High-Income Americans could easily afford to pay the proposed tax without creating a financial hardship.

Second, the advocates argued wealthy taxpayers also owned most of the assets and were therefore likely to disproportionately benefit from federal policies to be funded by the tax.  Reinvesting the tax revenue in the country, cleaning up its Balance Sheet, adding to its infrastructure, and strengthening defense capabilities would all serve to increase the value of their personal and business assets. As such, the public re-allocation of the collected tax would provide both tangible and intangible benefits to these asset owners essentially at no cost.

That was the argument used to persuade average American workers to support a law that in 1913 began to tax the incomes of the wealthy investor class. 

Fast forward to 2022. Does the 1913 logic limiting taxes on income to High-Income Americans still apply?

Can wealthy Americans like Amazon’s Jeff Bezos afford to pay taxes on income without creating a financial hardship?  Absolutely!

Does Bezos, as one of Amazon’s largest shareholders and the owner of the Washington Post, disproportionately benefit from … and/or … have influence into Federal Polices that might affect his asset values?  No doubt! 

Bezos owns 53 million shares of AMZN. The government lock-down (federal policy) shuttered Mom & Pop businesses around the country leaving only AMZN and a short-list of Big Box Retailers for consumers to buy from.  As a result, AMZN’s share price soared to $3200 on 12/31/20 from $1400 on 1/1/20 adding $70 billion to Bezos’ Net-Worth (policy benefit).  

The government spent $6.5 trillion in 2020 fighting Covid19 (federal policy).  A lot of that spending went to consumers who then bought products from AMZN (policy benefit). As business faltered tax revenues fell.  2020 Federal Tax Revenues totaled $3.4 trillion so Uncle Sam added $3.1 trillion to the National Debt.

Considering the facts, why wouldn’t taxing a portion of Bezos “$70 Billion Unrealized Gain be appropriate”?  

"Noblesse Oblige" ... With Great Wealth Also Comes Great Responsibility … doesn’t it?      

From the perspective of the “Ultra Rich” if the only criteria for the taxation of capital gains is the "Realization Of Income At The Point Of Sale" why sell anything? … ever?

Simply borrow against the value of those appreciating assets for the rest of your life and let someone else pay the taxes … or better yet … let Uncle Sam borrow whatever it needs.  Never pay a dime of income or payroll taxes again.     

Point of fact … nothing economically or financially has changed in 100 years to cast doubt on the 1913 arguments calling for an exclusive Income Tax on the Investor Class.

So, if Congress doesn’t have the “Political Will” to apply what amounts to a Progressive Flat-Tax to “Any Income From Any Source In Excess of $120,000”, to be paid by those who can afford it … then who is left to fund the operations of the Federal Government and service its debts?

That’s right. You and me … and Uncle Sam’s Credit Card … for as long as it lasts.

LOOKING BACK, ORIGINALLY CONGRESS WAS GOOD TO ITS WORD    

America’s working poor in 1913 were receiving less than $.36/hr.

To encourage and retain political support for the Sixteenth Amendment Congress set the Standard Income Tax Deduction (SITD) at $3,000 (4x the $750 MHHI) which is where it remained for several years. 

Hence, from 1913-1920 with the “Income Tax Bar” set at a very high level, tax returns were filed by only 15% of the workforce. 85% of the workforce continued to receive their income Federally Tax Free. In truth, that Tax-Free Income was arguably like any other Employee Benefit today being paid by the employer.

True or untrue?

Today 89% of all employees/employers pay 15.3% of their incomes on up-to $147,000 as Payroll Taxes to support the financial needs of retirees … and …  41% of the workforce pays some Income Tax because the “SITD to MHHI Ratio” fell over the years from “4/1” (3,000/750) to “.33/1” (12,000/36,000). 

As a result, the 2022 Income Tax Bar now rests at a very low level … and of course to my point  … "That wasn’t the deal the average American worker signed-up for."

SUMMARY

If the people who can afford to pay the taxes are successful in achieving their “Zero Tax Objective” … and federal spending continues to grow as Gross Domestic Product (GDP) climbs … then who pays the taxes required to fund federal operations while servicing $30 trillion of Debt?

ANSWER … Either the average American worker or Uncle Sam and his credit card. 

The original tax protocols were developed to tax 15% of the workforce.  If 41% of all workers are now paying that tax then arguably 26% of the workforce (predominantly Middle Class > $50,000 of income) are today paying taxes that by all rights they do not owe.  

And America’s working poor and middle class through the Payroll Tax System are today also paying more than $1.0 trillion annually to cover retiree costs (estimated $35-40 trillion through 2045)

There are 165 million people in the workforce so it follows arithmetically, that roughly 43 million workers, all earning less than $120,000 should arguably now be receiving their income federally tax free.

Furthermore, I contend, 120 million workers earning less than $120,000 per year should all have the right and be given “The Choice” to instead save and invest up to $18,360 of the Payroll Taxes they are now required to pay Social Security … because over time that invested capital will not only enrich them … but their ensuing financial independence will also in time reduce the future cost of Federal, State and Local government services that would otherwise be required during their retirement years.

So, who then do you believe should make-up the tax revenue shortfall created by the proposed changes in Federal Tax Policy?

Should that obligation fall to Uncle Sam and his credit card?  …

… or to the 15% who live comfortably at the top of the pyramid with 78% of the nation’s $115 trillion Net-Worth … Americans who we all agreed in 1913 would henceforth be responsible for paying all Federal taxes on income?

My Vote: "I’m with TR  .. Tax the 15%." 

Because when you think about it … isn’t the $30 trillion of National Debt by definition … also “$30 trillion of Uncollected Taxes”.

“So, hasn’t the 15%, already had full use of that $30 trillion of Tax Savings as it developed over the last 60 years?  And, isn’t that already one sweetheart of a deal?”

Then why should Uncle Sam further burden the country with more debt to cover the lost revenue from a class of Essential Workers who candidly never should have been robbed by Congress in the first place of "Their Retirement Tax Savings" through the Payroll Tax System ... or ... systematically deprived by our political leaders of that $120,000 Standard Income Deduction?

You're a Taxpayer, Voter and I fervently hope ... also a "True American" ... with a God given right to live the American Dream.   

“Over the next 25 years, what kind of country would you like to call 'Home'?"

Because America appears to be at a Crossroads.

Do you want to live in a country with the freedom to choose and pursue your own personal development and financial future? Or are you now looking for something else?

Because that choice in America … that choice to live free and prosper … is unlike any other in the world ... at least for the moment ... and that means that "CHOICE" still belongs to you.

MY SUGGESTION

The 70/70 Proposition:  Shoot me an email, say hello on Facebook or drop me a tweet and tell me the America we all love and cherish can’t get a lot better for everyone.

My Primary Goal:  Reduce the Wealth Gap Ratio from 78/22 today to at least 60/40 by 2045 by reviving the 1913 Taxation Protocols so that every hard-working member of the workforce can then share in the greatness that is America’s bounty!” 

THE 70/70 PROPOSITION: SUGGESTED LEGISLATION

1)      Congressional Performance:  Establish Two (2) Financial Mandates to ensure Legislative Accountability

 

A)    5% Annual Nominal Gross Domestic Product Growth (GDP: 3% Real, 2% Inflation). Goal:  2045 = $70 trillion  

B)     2.4% annual reduction in the "Debt-To-Nominal-GDP-Ratio".  Goal: 2045 = 70%   Debt = $49 trillion

 

2)      Establish $120,000 Standard Income Tax Deduction ($120,000 Tax-Free)

 

3)      Give every FICA Taxpayer (Social Security & Medicare) the right to redirect the Mandatory 15.3% Employer/Employee Payroll Taxes into a Self-Directed Tax-Free Investment Retirement Account. This legislation increases the annual Tax-Free Retirement Savings of every worker by up-to $18,360. 

 

4)      Replace $1.3 Trillion in Payroll Tax Revenues to be re-directed annually into employee funded Tax-Free Retirement Accounts with an “Investor Class 15.3% National Responsibility Flat Tax” levied on any income from any source in-excess-of the $120,000 Standard Deduction.  The tax proceeds from the “National Responsibility Tax” will be used to fund the Social Security and Medicare Entitlement Programs. But, unlike the Payroll Taxes collected from American Workers ... taxes collected from the Investor Class never need repayment ... eliminating at least $35 trillion of debt over the next 24 years.

 

5)      High-Income taxpayers will pay an additional 5% Flat Tax at each of five individual income brackets. The tax rate is defined by the Tax Bracket in which the Adjusted Gross Income falls (Gross Income - $120,000).

 

 Personal Income Tax Table (1,000's, Consolidated Tax Rate) 

 

INCOME      ADJUSTED         RATE

 0-120                     0               0%

120-250               0-130        15.3%

250-500           130--380        20.3%

500-750          380--630        25.3% 

750-1000         630-880        30.3% 

1000-1250     880-1130        35.3%

>1250             >1130           40.3%

Modeled after the 1913 Form 1040 this additional tax funds the balance of federal operations.

 

6)      Establish "Corporate Net Revenue Tax" to augment tax on Corporate Income to ensure Growth Companies in-particular are not gaming the tax system.

 

EXAMPLE:  An "Industry Specific Corporate Net Revenue Tax" using Gross Profit Percentages as "The Rate Tax Key" might stipulate that for established corporations with "Sales in-excess-of $100 Million" the "Corporate Business Tax" would instead be levied on:

 

THE GREATER OF: 

1)  5% of Net Revenue on greater than $100 million of recorded sales

2)  the Corporate Income Tax on Pre-Tax Income computed using the tax code.

 

Appreciate your consideration:  If you made it this far … I love you for having an open mind :)  Jim Macauley For Congress, June 7, CA District 20