Nov 7, 2019
Hey everyone, this is Dan Thompson. Welcome to another wise
money tools video and podcast. Now in this video we're gonna talk
about and take a look at the new proposed health care that
Elizabeth Warren just came out of. But we're gonna try to look at
it from the perspective of, you know, a hard working middle class
American, if you will, who's, you know, trying to get to a point
where they can retire someday. Let's just think about the millions
of people who have a 401k out there or really any other retirement
plan that's getting funded because of work. So the question is, how
many 401k is could get creamed. If Elizabeth Warren's were to get
her policy put into place? Well, let's look at the plan. And again
at a very high level.
Basically what she did, she announced her Medicare for all plan.
It's a $52 trillion plan that has all the makings for a way to
pretty much destroy to destroy your 401k. And let me explain what I
mean by that. It's critical that you connect the dots and
understand the chain of events that can be set off by one seven
move. You've probably heard of the term the butterfly effect,
right? Well, it's defined like this, it says, this is a phenomenon,
whereby a minute localized change in a complex system can have very
large effects elsewhere. And then the analogy is if a butterfly
flaps it's wings in Chicago, a tornado occurs in Tokyo, right?
So Warren is proposing has such a devastating butterfly effect that
it literally could affect the world. Because the United States
tends to lead the world anyway. Well let's look at the basics of
the proposal and again, just kind of at face value. What she said
was it's gonna be cost $52 trillion over 10 years. And she says
it's gonna be paid for by taxing millionaires and billionaires and
corporations. She says her plan will increase taxes on the middle
class. And she says that they will even get some money back. She
wants to increase the power of the IRS to collect more taxes. She
wants 3% annual tax on wealth. She wants to increase payroll tax on
businesses and corporations. Okay, so that's probably just the
surface.
Now if we unpack those things one at a time, maybe we can kind of
deduce the oncoming butterfly effect. First off $52 trillion over
10 years, that's 5.2 trillion per year, and that's trillion with a
T. Now for a better perspective, let's look at what a trillion
dollars is in seconds. Okay. So thousand seconds is almost 17
minutes, it would take almost 12 days for a million seconds to
elapse. It takes 31.7 years for a billion seconds to roll by. Now a
billion is a lot of money. But a trillion dwarfed a billion a
trillion is a thousand billion, which means a trillion seconds
would amount to 31,709 years. Now we don't even have enough history
to go back 31,000 years. If we take 52 trillion, and we divide it
by the number of people united states, which is 372 million, not
counting illegals. And by the way, illegals get their health care
free.
It turns out to be $139,784 per person, over 10 years or 13,900 per
person every year. Now that's not every working person. That's not
just adults, that's every single person is paying $13,900 every
year. So a family of five, somehow, some way is gonna get paid is
gonna have to come up with $69,000 per year. Now I guess the first
question is. Are you in pain $69,000 if you're a family of five
right now for your healthcare? Alright, but here's the deal. She
says the middle class isn't gonna have to pay just the rich, the
wealthy corporations are gonna have to pay. Now again, presuming
this passes, let's see what might happen. So first off, no one in
the middle class will have to pay the cost, which even her fellow
Democrats say that's just not possible. That means somehow the
wealthy are gonna get stuck with it.
Now the middle class makes up for about 66% of our current
population. So that means 34% of the population is gonna have to
fund 100% of the cost for her plan. Again there's 372 million
people, that means 66% of them, or 245 million aren't gonna have to
pay. So that means 97 million are gonna have to come up with you
ready? So we're gonna just divide that out over the 97 million.
That means over the next 10 years, 97 million people are gonna have
to pay $536,000 each. Okay. The question is, Are you one of the 97
million? See, the middle class income for this year was between
$45,000 and 1,45,000. So a family making 1,45,000 gets to pick up a
significant tax and pay for others health care. The reality is,
it's just not practical. You can steal all the money from the
wealthy and it won't make a dent in this kind of a cost.
So What's the butterfly effect? How many wealthy people will let
their money be stolen from them or have a government takeover where
they literally have unlimited taxing power on him? What if she's
wrong though? What if it's not just 52 trillion? What if it's 60
trillion or 80 trillion. One thing we know about the government is
they always seem to be able to spend more than they estimate. We
also know that what the government takes, they rarely ever reverse
and give back to you. So what we're gonna see is probably families
with a lot of money and corporations exit the country. Similar to
what's happening in New York, people are leaving New York and
heading to Florida like mad because of the taxes that New York
keeps imposing upon them. You can only tax so much before those
with the money say. Okay, that's it. I'm out of here.
Now, you may have noticed in the last few years, we've had somewhat
of a booming economy. It's the butterfly effect effect of tax cuts.
When businesses and families have more money in their pockets that
they can spend and save and invest. The economy grows as they grow
their wealth. They may buy a bigger home, get another car, take
vacations go out to eat, invest, whatever they want to do. The
effect is tremendous on the economy. And that's why we have a 50
year record low for unemployment. That's why wages have been going
up dramatically compared to previous administrations. The wealth
tends to perpetuate more wealth, more wealthy families, more
millionaires are added to the roles as there's really plenty of
room for many many more.
There's more innovation that occurs, more businesses invest in
R&D, more businesses are created to fill needs and wants of
others. Raising taxes has the opposite negative effect and the
economy tends to shrink and even Possibly collapse under the weight
of government regulation and taxes. The Medicare for all is nothing
more than a recipe for disaster. There's no free lunch. It's got to
be paid for by someone and somehow. Okay, I better stop there. This
is just the cost and the butterfly effect it will have. Let's talk
about just for a second unintended consequences. I've said this
previously, but corporations do not pay taxes. Okay, yeah, they
write the check. But the tax bill is passed on to every consumer of
their goods and services. It's factored into the price, just like
any other cost of doing business.
Since I've talked about this before, I'm gonna be quick on this
point. If a corporation gets hit with a higher tax, several
butterfly effects occur. Number one, increased cost to the
consumers. And this could and would eventually price the consumer
out of the market. Number two, wages to employees have to be
reduced to keep your prices the same. And number three, eventually
cutting back on employees, which makes unemployment price. See
taxes can't be raised in a vacuum. There's gonna be consequences.
And in this case, they can be devastating ones. Now next, she says
that the IRS will be tougher on collecting. Now, if this alone
doesn't send shivers up and down your spine, I don't know what
does. I mean, there is no piece of mail that you can get that when
you open your mailbox you see Internal Revenue Service on the top
of that envelope that puts you into a tailspin.
If you've ever had to deal with the IRS, you know how unnerving
that can be. So would you be in favor of increasing the force and
the power of the IRS? Does this make you all warm and cozy? If so,
watch out, you could be next. So then she wants to do a 3% annual
tax on wealth. It's not robbery enough to steal from your paycheck.
But can you imagine every year filling out a personal financial
statement. And then sending the IRS an additional 3% of your
wealth. And this isn't a one time event. It's every single year.
Now that sounds like it's pretty motivating. Do want to build your
wealth, right? All right. So I wonder if this woman is actually
functioning with some mathematicians behind her. Now, if you're a
millennial, or a Gen X, or whatever, but you're gonna get a job
someday and try to support a family.
Maybe you have some ideas and you want to be financially free
someday. You would be nuts to vote for this, because in a few short
years, you're gonna be the one holding the bag. And I can tell you
right now, if this were to go into place, the number of offshore
accounts and foreign corporations that would be created would be
massive. Other countries would be wise to make laws right now to
allow US citizens to open up corporations in their country with one
simple easy document. Banks couldn't open doors fast enough and
other countries trying to keep all the wealth that's gonna leave
the United States. The Bahamas would be open 24/7 trying to keep up
with the demand. The butterfly effect is that the very people that
Warren put these taxes on eventually take their money and they
leave the country. Now who's gonna pay?
Okay, So finally, she said that she wants to increase the payroll
tax on employers. See again, this is kind of not even thinking once
again, where's the money gonna come from? What's the butterfly
effect, lost jobs as employers will have to cut down on wages,
unemployment is gonna go up, consumers will have to pay more for
the goods and services. Now here's the culmination of the entire
butterfly effect. The very people who she thinks she's helping are
the same people that are gonna be hurt the most. Why? Because most
likely their wages are gonna be the first ones to go to see the
poor tend to have the jobs that are more expendable. And she's
trying to theoretically help them. But in the sense she's gonna
ultimately put more hurt and burden on them. They may have to share
a job with someone else or go part time. Worse, they may just
actually lose their job.
The devastation will trickle down to the lowest paid the least
educated, the poor to the middle class income earners. They're
gonna feel this the most and they're gonna be the recipient,
possibly the harshest economic circumstances that they've ever been
in. Look, folks. You don't need a spreadsheet, a degree in
economics. You don't have to have a Harvard education to walk
through this in your mind, it's just common sense, at least to
everyone who's not brain dead, and a politician seeking power and
control over us. Just think about this for a second, think about
where you work. If you're an employee, and your employer just got
hit with an additional 15 to 30% additional tax, what might happen
in your line of work? what might happen to your job? Do you think
the employer has the capacity to simply take it out of his pocket?
Or will it eventually affect the entire company? If you're an
employer and the same situation occurred? What would you have to
do?
Is your business so filthy rich that you'd simply roll over and eat
the tax? Or would it have to be passed on through employees
reduction in wages or price increases. Most small to medium sized
businesses run pretty lean. The first to go are gonna be the lowest
paid and most expendable. So this thing has disaster written all
over it. Just think about what this would do to our economy. I know
it's nice to think about getting free stuff. But it just ain't ever
gonna happen. It can't happen. There is no free lunch, someone pays
and it will affect the poorest among us eventually. Everything from
gas to groceries will be affected, and you and I will pay for it
somehow, someway. There's no such thing as stealing from the rich
without a butterfly effect. And in this case, a tsunami on the
other end, wiping out a wonderful economy. So that was kind of fun.
As it for this video. Probably got on my soapbox a little bit, but
I want as many as within the sound of my voice to become a one
percenter.
I want you to be wealthy if you're not there already. I find it
pretty exciting that there's a lot of people with means and wealth
that tune in to our videos and I love having you here. I want to
hear from you. There's plenty of room for more wealthy people in
this country. I don't want you living paycheck to paycheck with
debt hanging over your head. Even though politicians want us to
hate the wealthy right now. It's the wealthy that can make changes
in the world. And I'd love to see you be one of them. Well, as
always, if you have any questions, shoot him to questions at wise
money tools.com. Please I'd love to hear your comments. And don't
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care.