The Honorable Sam Johnson
2304 Rayburn Bldg HOB
Washington DC 20515

Dear Rep. Johnson:

Did you know that Americans hold $90.2 trillion of wealth today? Of that total the top 10 percent of Americans hold $81 trillion. If we go back to 1950 and calculate the compound annual growth rate on that measure of wealth, we find the CAGR is 7.2 percent per year. At that rate wealth doubles every 10 years.

Is it fair to project the same growth rate for the next 10 years? Of course it is. It depends on normal GDP growth. Donald Trump suggests GDP will be much higher. But let’s go with the wealthiest among us holding $162 trillion by the year 2026. That means that every millionaire and every billionaire will see his or her wealth double by 2026. But another $81 trillion stacked on top of the present $81 trillion would have no noticeable effect on them at all. How could it? If that stack were converted to dollars and laid end-to-end, it would reach 1,710,720 miles into outer space, or five times the distance to the moon!

Now here is my plan about how to solve almost every economic issue that confronts America today. And since that is right down your alley as the Chairman of the Ways and Means Committee, you are in the driver’s seat for getting credit for fixing every economic issue of our times. (I don’t need any credit. I’m retired).

Suppose we took a tiny slice of that new $81 trillion coming in over the next 10 years. Let’s say we lasso just 10 percent of it, or $8.1 trillion. The wealthy would never feel it in the least. How could they? It must be converted to money to be viewable, and only the Hubble Telescope could spot a trail that is 1.7 million miles long.

But look at what we could fix with $8.1 trillion. For starters we could make Social Security and Medicare solvent—almost forever. And that would be just if only because the U.S. Treasury has systematically taken $7 trillion from the payroll tax during the past 35 years and diverted it to other government programs. We could also modernize our infrastructure of highways and railways, airports and seaports, while rebuilding all our decaying bridges. There would also be funds to send every kid to college or trade school who wanted it; we could modernize and streamline the Affordable Care Act; and we would still have money for R&D efforts in space, medicine, and energy.

That would just about deplete our $8.1 trillion. But not to worry. By 2026 the wealthiest would still have $151.9 trillion, and that total would be building toward $303.8 trillion by 2036. Over the second decade we could lob off just enough to pay off the national debt.

So there you have it. Wealth as we know consists of the value of stocks, bonds, and real estate minus our debts. And when you consider that almost every dime of it is passed on to its present holders via inheritances, and that values grow from the effort of all of us—all 325 million of us working, and contributing in millions of ways, it follows that the combined efforts of everyone would be responsible for fixing all these issues, no one would be hurt financially by them, and all would benefit.

Finally, there is no hyperbole in my numbers, nothing frivolous or grandiose about the concept; it is devoid of politics, and it passes the criteria of honesty and fairness as articulated by any fair minded person, but in particular by those wonderful 3rd graders who are too young and too innocent to have devious and dishonest thoughts coursing through their bodies.

What could be easier? We would need only to tap a small amount of new wealth created over the next 20 years, and then only from the ultra rich who would at long last give up their fair share from the wealth pool we all created. A small fee on large security transactions; eliminating the “carried interest” provision; limiting personal inheritances to $5 million; and directing that all newly printed money must go directly into circulation where jobs are created would do the trick. Additional savings could be found via a bigger push in renewable energies.

Consider doing nothing. With wealth doubling again and again and again—into the quadrillions of dollars without anything ever getting fixed. The bottom 50 percent of Americans would still have no wealth because zero raised to any power is still zero. We would become a third world nation right before we fell into the bloodiest revolution this world has ever seen. And I would be leading the fight because…some things are worth fighting for. That is not a threat—it’s a promise.

Sincerely,

Ed Phillips, Ph.D.
MSgt, USAF (ret) – Aim High!