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smother by dark shadows cast by evil people.
My 20 year old sister settled death claims on thousands of
boys, many of whom had been her classmates. She prayed and
cried for them daily. When asked to buy war bonds, she told
our mother, “I’m afraid to buy bonds, because if we lose the
war they will be worthless.”
Mom replied, “If we lose the war, your life will be
worthless. Buy bonds.”
If I may paraphrase my mother’s wisdom,
“Mr. President, spend whatever it takes to win, because the
price of losing to evil will be unbearable.”
2. Budget Deficits: Last month I
suggested that America abolish the Corporate Income Tax.
President Truman raised the Corporate Income Tax to 52%
during the Korean War. That raised the cost of everything
anyone has purchased in the past half a century. It includes
buying homes, cars, college education, medical treatment,
highways, bridges, railroad trains, trucks, food, toys,
haircuts, etc., etc. etc., without end. President Truman may
have envied rich people, partly because he lost his shirt
and haberdashery store during the Depression. Also, he never
expected smart accountants to figure a way around his 52%
Corporate Income Tax. I was in the Army when he did it.
Three or four decades later I was selling tax services on
Wall Street when another president announced a new tax. One
spokesperson for a major international accounting firm was
so bold as to say, in effect, The Congress isn’t smart
enough to design a tax that we cannot circumvent. The
widening gap between the working class and the superrich is
growing wider, proving that the arrogant accountant was both
honest and accurate.
As one whose customers included some of our nations largest
banks, brokerages, real estate icons, law firms and a
hundred accounting firms, I have witnessed the ongoing
scalping of working families via excessive interest rates
and tax burdens. The last point was my motivation in
proposing IRA’s, Individual Retirement Accounts, to Congress
in 1972.
Therefore, if higher taxes are needed to pay for this war,
let’s not repeat the pattern in effect since 1776, which has
always been to add burdens on the workers. Instead, tax
those who own 90% of the wealth of the nation. Invoke a
wealth tax, with the first $10 million of a couples wealth
being exempt. (Wealth of minor children should be added to
the parents wealth for fairness.) In that way, those who own
the most will pay the most. It is morally just to take from
the excess wealth of a few rather than to take from the
necessities of the many. The $10 million threshold will
exempt most.
In addition to ending double taxation of corporations,
abolishing the Corporate Income Tax will eliminate the
excessive use of the almost unlimited corporate deduction
for interest on borrowed money. This will stop the expansion
of the money supply. Professor Milton Friedman of the
University of Chicago received the 1976 Nobel Prize in
economics for showing the relationship between inflation and
expansion of the money supply. It follows that by
stabilizing the money supply, we would likely stop
inflation.
3. Social Security reform: Some people
believe that the social security funds could be better
invested by Wall Street than by Washington. The first
fallacy is, there is no pile of money to invest. Social
Security is only a cross generations transfer process.
If President Bush diverts current contributions to private
accounts, Social Security will collapse. Please see my
articles of March 26 and April 2, 2004 for details. Total
forfeiture by those who die without beneficiaries is the
foundation of the system.
This knowledge, and experience with human shortcomings,
leads to my proposed solution to funding future retirement
for today’s younger workers. It does not require a new
program. It does require making voluntary programs, 401k’s
or IRA’s, mandatory.
However, because we all have financial wishes, for new cars,
kids college, business startup, all of these must be shut
off. The only permissible justification for early
withdrawal, after exhausting all other available funds,
should be impending death.
Corporations relieved of the Corporate Income Tax should be
required to install some form of profit sharing plan. Unlike
today’s Pension Plans, many of which are dangerously under
funded, payments into employee profit sharing should be done
on a schedule like today’s payments of withholding tax or
state sales taxes. Bluntly, payments should be cash on the
barrel, within three business days. For corporate America,
it might approach a wash: tax saving will offset profit
sharing cost. A win/win for all.
In closing, the cliché no pain, no gain
applies here. But I submit that getting an extra year out of
your car, or vacationing in your own back yard, is not too
high a price to pay to enjoy our American way. 
That’s New ThinKs!
God Bless,
Poppa Kelly
To learn more about Poppa Kelly
please review his
initial article
- Thank you!
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