They Think You're Stupid (16 page)

Essentially, the media and Democrats are upset that a Republican happened to be occupying the White House when we were attacked and began to fight back. They cannot stand the fact that President Bush and our military personnel have led and waged an incredibly successful war against the madmen of the Middle East who hate all Americans. Fortunately, the liberal media and Democrats have been unsuccessful in weakening the resolve of the majority of Americans to support the fight against terror on terror's breeding ground. What their caustic, divisive rhetoric has accomplished, however, is increased infighting and partisanship among the public in a time of war--a time when we should be allied as a nation against outside threats.

Prime Minister Netanyahu stated to the U.S. Senate that "The motivating force behind terrorists . . . is hope--the hope of terrorists systematically brainwashed by the ideologies who manipulate them that their savagery will break the will of their enemies and help them achieve their objectives--political, religious, or otherwise." Americans also share a hope--a hope in their ability to rise up out of any adversity they were born into or find themselves in and achieve all their dreams.

Our shared hopes and dreams will not be torn asunder by a network of murderous madmen outside our country bent on destroying the beacon of hope that shines throughout the world. Democrats and the liberal media must not be allowed to plant the seeds of doubt from within our nation that destroy hope in our abilities, weaken the morale of the public and military personnel, and divide rather than unite us in defense of our shared freedoms.

The terrorists want to kill
all
of us--even Democrats.

As a great-great-grandson of slaves, I welcome those of you who are not descendants of slavery during America's darkest period in history to the "new slavery." Not the slavery of one man owning another as his property, but economic slavery--the slavery to a government bureaucracy that is out of control, except to control a disproportionate share of the property of one's labor. To paraphrase Abraham Lincoln as he contested the slavery of his day, "You work and toil and earn bread, and someone else eats it."

It is exceedingly difficult for someone to escape systemic poverty, to start a small business, maintain a business, or pass a business on to one's workers or family members. To make matters worse, if you are able to escape poverty or if you are just surviving paycheck to paycheck, you then have to constantly contend with a threatening, confiscatory, unfair, and overly complex tax code that tries to negate your economic progress all the way to the grave.

Numerous free market and government-controlled factors affect the strength of the U.S. economy, including interest and inflation rates, barriers to trade of U.S. goods abroad, and the price of foreign oil. Without question, however, three government programs--the federal tax code, the Social Security system, and the Medicare program form the basis of our economic infrastructure. The tax code, Social Security, and Medicare have the greatest effect on the opportunities for people to achieve economic freedom or remain forever chained to the U.S. government in economic slavery.

The federal tax code, Social Security, and Medicare, enacted in 1913, 1935, and 1965, respectively, are the three pillars that support the nation's economic infrastructure. More visible and easily manipulated factors like interest rates and trade agreements can certainly affect the economy's short-term successes or failures. An inextricable relationship exists, though, between our personal and business lives and the onerous tax code, our retirement plans and the health care system. The relationship illustrates the level to which our personal and professional lives are controlled, whether we notice it or not, by these three pillars.

The primary fault with our economic infrastructure is that it was pieced together throughout the last century using assumptions that are now long invalid. The authors of the tax code, Social Security system, and the Medicare program could not and did not foresee the impact of the United States on the global economy, the size and influence of the baby boomer generation, or the myriad advances in technology and their impact on all facets of our lives.

In addition, the dynamics of wealth building and individual achievement have changed dramatically in just the last twenty years. Upward mobility from generation to generation is the norm. Today's white-collar workers and small business owners are the sons and daughters of yesterday's blue-collar union members. Women now make up a significant percentage of the workplace. Racial minorities are more upwardly mobile and represented in every aspect of corporate America. More than half of the U.S. workforce owns financial investments such as stocks and bonds. More young people have college educations and advanced degrees than ever before. The marketplace for goods and services, ideas and innovations is global in scale. Perhaps most important, history has shown us the inefficiencies of centralized government programs and command economies. Yet, due to political pressures and a lack of leadership in most corners of state and federal government, we continue to place band-aids on an infrastructure that requires major reconstructive surgery.

The current federal income tax code is an eight-million-word mess, and it cannot be reformed or restructured. It creates disadvantages for families wondering how to pay for their children's education, for small businesses struggling to pay the bills and meet payroll, for multinational businesses trying to compete in the global marketplace against lower-priced goods from foreign countries, and for any U.S. citizen working hard every day to achieve the American Dream. No amount of tinkering with a portion of the tax code is going to fix it. It is too complicated. It is too unfair and inefficient. It discourages people from working harder to achieve upward economic mobility, which destroys hope and opportunity.

On July 1, 1943, the federal government began an immoral program that would forever change the way Americans think (or, in this case,
don't
think) about taxation. That is the day the federal government enacted what we know of as "automatic withholding." Prior to this date, people were responsible for sending the Internal Revenue Service a check by April 15 each year for the amount of taxes owed on their prior year's income. People knew exactly how much they were paying Uncle Sam for the government services he provided.

The federal government, however, was not pleased with this situation. It took the Federal Treasury too long to get your money. Automatic withholding was designed as a way to fill the federal coffers every month and to mask the true cost of ever-escalating federal spending. Congress explained to the people that, since the U.S. was busy fighting World War II, automatic withholding was necessary to fund the war effort in a timely fashion. Congress also promised the public that automatic withholding would end as soon as the war was over. That war ended sixty years ago.

Of course, taxes are still automatically withheld from your paycheck. Automatic withholding contributes to the economic slavery of working people because it keeps them ignorant about how much of their income they actually pay in taxes. Americans have simply been conditioned over time to accept the fact that their true amount of income is their take-home pay, which is roughly the amount they receive in each paycheck. Adding fuel to this fire, the federal government annually withholds too much of your money from each paycheck. Some people always seem overjoyed that they get back a big check each year from the Federal Treasury. Instead, they should be outraged. They forget that it's their money in the first place!

Automatic withholding is nothing short of immoral on the basis that it keeps people ignorant of the true cost of government and the amount of taxes they actually pay. In addition, the federal government, in its eternal arrogance, annually takes more from your paycheck than you actually owe in taxes! In effect, you are giving the federal government an interest free loan each year. And you are supposed to be happy to get
your
money back!

The federal tax code must be replaced, and it must be replaced with a national retail sales tax, also known as the FairTax.
The FairTax is a federal retail sales tax that replaces the entire federal income and Social Security tax systems, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government.

Several commissions over the last twenty years, including the one I served on in 1995 (the National Commission on Economic Growth and Tax Reform), have all concluded that a replacement tax system should satisfy six principles. First, it should promote economic growth by reducing marginal tax rates and eliminating the tax bias against savings and investments. Second, it should promote fairness by having one tax rate and eliminating all loopholes, preferences and special deductions, credits and exclusions. Third, it should be simple and understandable. Simplicity would dramatically reduce compliance costs and allow people to truly comprehend their actual tax burden. Fourth, it should be neutral rather than allowing misguided officials to manipulate and micromanage our economy by favoring some at the expense of others. Fifth, it should be visible so it clearly conveys the true cost of government and so people would not be subjected to hidden changes in the tax law. Sixth, it should be stable rather than changing every year or two so people can better plan their businesses and their lives.

The FairTax satisfies
all
six criteria. Period. Why has it not been enacted? The answer is Congress wants economic slavery for all. Where are the affirmative action advocates? Where is the American Civil Liberties Union (ACLU)? Where is the NAACP? The answer is a disgusting "They don't get it!"

The Social Security system is nearing bankruptcy due to decades of mismanagement, a flawed structure, and a lack of leadership and political will in Congress for meaningful change. What is worse, we have known for more than twenty-five years that the system is destined for failure. Yet, every year, Congress shirks its duty to address the problems in Social Security and instead has implemented such preposterous solutions as raising taxes on Social Security benefits (also known as "double dipping") and increasing every year the retirement age for benefits.

Fifty years ago, there were sixteen workers to support every person on Social Security. Today there are only 3.3 workers to support every beneficiary. By the time our children and grandchildren, those just entering the workforce today, turn 65, there will be only two workers supporting each person on Social Security.

The current Social Security system cannot afford to pay promised benefits to our children and grandchildren without enormous tax increases because
the system is broken.
The Social Security system was not designed to be the sole provider of retirement benefits for our seniors. Nor was it designed to account for the large baby boomer generation or to be a source of funds for Congress to raid to spend on one pork barrel project after another.

We can no longer afford to pour more tax dollars into the broken Social Security structure. The Social Security system, like the federal tax code, will keep workers in economic slavery for as long as the program continues in its current form. Younger workers of every demographic will never see a penny of the money automatically withheld from them each month. Because of the discrepancies in age expectancies, minority workers currently nearing retirement will be lucky to receive a few years of low benefits because Social Security continues to increase the retirement age.

The system must be changed to address current realities in the United States: the large baby boomer generation, which will soon reach retirement age; the proliferation and accessibility of personal retirement plans to most working citizens; and the known fact that our children and grandchildren will likely see none of the benefits they have paid into the system.

We know how to fix the Social Security system. The model of a system of personal retirement accounts was successfully installed in the country of Chile in 1980. It has worked ever since!

Three fundamental changes must be made to the Social Security system if we are to keep the promise of benefits to our seniors and the soon-to-be-retiring baby boomers, while providing more benefit options to future generations. First, we must establish a system of optional personal retirement accounts. Personal retirement accounts will provide workers ownership of monies paid into the system, choice in the level of risk and potential return on investment, and the opportunity to build a nest egg for their retirement and an inheritance for their families. Currently, nearly all citizens have access to personal retirement accounts either privately or through their place of employment.
Personal retirement accounts provide their owners a long-term rate of return that the current Social Security system can never match. Individual citizens--not the federal government--will have the power to decide how a portion of their Social Security contribution is invested, and individuals will have the opportunity to benefit from the gains of long-term investing.

Second, benefits must no longer be reduced based on secondary or supplemental incomes. Many seniors take part-time jobs during their retirement years to supplement their retirement benefits or simply to stay active and to provide others their years of experience. Unfortunately, the current Social Security system penalizes retirees who choose to work during retirement by reducing benefits they earned. The current system treats retirees no different than welfare beneficiaries. This aspect of the Social Security system is simply ridiculous. Retired seniors who spent a lifetime contributing to society and paying into the system should not be treated like younger welfare recipients who are still in their working years. In addition, retired seniors can provide to others a lifetime of experience and talents. They are robbed of this opportunity under the penalty of losing their benefits.