Letters to my President-Elect that have never been read

From: MRCANDU10To: MJFinquiry@magicjent.com

Sent: 1/21/2009 9:08:19 A.M. Eastern Standard Time

Subj: Attn Magic Johnson Basketball and the White House

Dear Magic,

I have an idea that I think you will be very much interested in. It is about President Obama and basketball

We all know that President Obama is passionate about basketball (almost as much as you and I) and would like to have full length professional basketball court at the White House. I think this will actually make him a better President.

We also know that if he gets the government to pay for it, it may cause some people to feel he is opulent or not thinking about that the government could better spend its money on helping people.

This is what I propose

You organize an NBA White House Basketball Court Fund (the NBA WHBC Fund}.

This fund would raise the entire cost to build and equip a separate structure on the White House grounds (perhaps using the existing short outside half court space). In order to make the cost fully deductible as a contribution the fund would actually make out the check to pay for it to the US Government.

The structure would contain an NBA regulation full court, some spectator stands, bathrooms, and small locker rooms with showers.

Older, but still young, retired NBA basketball players (who I would ask to contribute financially to the fund), such as MIchael Jordan and Larry Bird would form an emeritus team to occasionally play the White House Staff team. Perhaps mixing retired professional players to play on each side. We could also offer Televised videos or live with sponsors to raise money for charities. The President could invite at different times kids to watch the games. This would be goodwill all around.

The fund should get approval and possible sponsorship from the NBA.
I think that for whatever funds are needed, there are plenty of NBA players (both active and retired) who would want to contribute.
This could be a win-win for everybody - especially President "Barry" Obama!

Magic -you and I know someone in common. You remember Jersey Giant Sub Shops in Lansing - Particularly Britt Slocum. I had been back in 1995 thru 2000 their accountant. I still handle the Ken Slocum's (the father of the four Slocum brothers) personal tax returns. In 1995 in one of my visits to them, the boys and I played some pickup basketball in a Lansing gym. This is when I made a once in a life time shot. From 10 feet from half court I shot a high arcing shot that hit the rim and bounced 25 feet in the air - hit a beam and came down thru the hoop. They still talk about it in Lansing.

Hope to hear from you soon.

Lloyd Michael Abrahams

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By Fax: 202-638-2716 (Updated)

January 11, 2009
President-Elect Barack Obama
The Hays Adams Hotel- a Registered Guest
16th & H Street, N.W.Washington DC

Dear President-Elect Obama

In light of the current Middle-East conflict in Gaza, there is a window opening for a new and different approach to resolve this Middle-East Conflict and to stop the rockets from being fired from Gaza and attacks by suicide-bombers.


I propose using the world's most powerful, but most under utilized weapon system, that has decisively defeated terrorists and insurgents every time it has been used in Iraq. This weapon system is more powerful than a B2 bomber loaded with nuclear weapons. It is how this weapon system is used may determine its success. The use of this weapons system to resolve the Israeli-Palestinian ageless conflict will take heroics, expertise, and diplomatic finesse as we are dealing with fierce enemies that have been digging two graves with every death. It can be the missing key to resolving this conflict. It will take a powerful and eloquent world leader who is willing to change world politics to successfully resolve this conflict. The timing is perfect upon your inauguration.

I have written you the President-Elect, President Bush, Congress and the media previously about this weapon system that can decisively defeat terrorists and insurgents. You have said that if someone was sending rockets at your home where your daughters were living you would do everything possible to stop this terrorist act.

To all those that think that Israel is using a disproportionate or discriminate response to Hamas, I ask them one question:

• If you lived in NY CIty or Westchester NY and Hamas was in power in Jersey City and was firing rockets indiscriminately into New York City or Westchester NY, would you be as restrained as the Israelis have been in your response, or would you want your Airforce to carpet bomb Jersey City until it had no more capacity to fire rockets ?

It is interesting that the media when reporting casualties from this latest conflict in Gaza neglects to report on Israeli casualties incurred by Hamas from rockets fired and suicide bombers incursions into Israel since the year 2000. If you then compare the two sets of numbers you would find that Israel is answering disproportionately less than Hamas. If Israel was using disproportionate responses now they would carpet bomb indiscriminately Gaza and there would be 400,000 plus Palestinian casualties. Nobody has ever fought a war like this with such effort to minimize collateral damage. Shame on the media. Even in World War II, the US bombing raids did not exercise as much restraint as the Israeli Air Force and IDF have done in this conflict.

I sincerely hope that you will listen to this new and unique approach to resolving the Israeli-Palestinian Conflict. You have personally experienced the full power of this weapon system.

MRCANDU10 (Cousin of MR.Get-It Done)
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Someone in the Obama Transition team must have read my blog -because they are partially stealing and using in a limited way my solutions to our nation's financial crisis.

THE OBAMA PLAN IN CONGRESS:
"Under the plan, individuals would receive up to $500 and families up to $1,000 through a cut in payroll taxes on the first $8,100 in income. The money would be delivered through paychecks as a reduction in Social Security withholdings, and is intended to bolster consumer spending by giving a small lift to household pocketbooks. "
EXCERPTS FROM THE CANDUMEMOS to OBAMA and the CONGRESS on how they could do better
Saturday, November 22, 2008

The Theory of Tax-Enomics-Presidential Economic Solutions
For The President, the President-Elect, the Transition Team, the Congress, the Secretary of the Treasury (Present and to be) , and the Federal Reserve Chairman -UPDATED and REVISED 11/22/08The Theory of Tax-Enomics is the use of Federal, State and local tax laws to produce positive economic and social changeIMMEDIATE FINANCIAL CRISIS - RECESSION STOPPING SOLUTIONS FOR THE PRESIDENT , THE PRESIDENT-ELECT AND CONGRESS BY AN ECONOMIC STIMULUS PACKAGE WITH Specific programs WITH SELF-FINANCING SOURCES OF FUNDING TO:

1. REVERSE THE INCREASE IN UNEMPLOYMENT BY STOPPING THE LOSS OF JOBS IN THE US DUE TO THE CURRENT FINANCIAL CRISIS AND INCREASE IN ACCELERATED DEFLATION - SPECIFICALLY IN THE AUTO INDUSTRY AND IN THE HOUSING INDUSTRY.

2. PUT MONEY IMMEDIATELY IN AMERICAN TAXPAYER CONSUMER POCKETS FOR PROPER SPENDING WITH A SHORT-TERM- IMMEDIATE ECONOMIC STIMULUS PROGRAM.

FOLLOWED BY A 2YEAR LONG-TERM STIMULUS PROGRAM.
1. THE THREE MONTH FREEZE PROGRAM ON A 50% REDUCTION OF ALL Federal PAYROLL TAXES (Social Security and Medicare Tax Withheld from employees and paid as an expenses by employers) ON ALL WAGES AND SALARIES for existing employees and a SIX MONTH FREEZE under the same program for newly hired employees.

2. INCREASE FOR THE NEXT THREE MONTHS ALL STATE UNEMPLOYMENT INSURANCE BENEFITS.
Every person, presently on Unemployment or who goes on unemployment during the three month period, will receive 110% of the allowed benefits during this three month period.

IT DOES NOT REQUIRE THE GOVERNMENT TO ISSUE ANY NEW CHECKS.
The employers would take the deduction for both the withholding given to the employees and their expenses portion on their quarterly Fm 941.
The taxpayers who are presently on unemployment insurance benefits will receive the 10% increase directly in their existing checks. Any new taxpayers going on unemployment during this three month period would also receive 110% benefits for the remainder of the three month period. Whatever additional benefits paid out by the states, they would bill the federal government for the additional benefits paid by the states.

HOWEVER, EVERY WORKING AND NEWLY HIRED WORKING TAXPAYER WILL SEE IMMEDIATE BENEFIT. By using supply-side economics there will be no loss of tax revenue as explained below in THE THEORY of Tax-Enomics.This program is designed to put IMMEDIATELY MONEY IN THE ECONOMY AND THE AMERICAN TAXPAYER- CONSUMER WITHIN 30 DAYS OF PASSAGE BY CONGRESS. It will GIVE IMMEDIATE benefit to both the individual American Taxpayer Consumer and the American Business Taxpayer.This program could plug the hole in the dyke until other SPECIFIC programs can be put in place.The loss in tax revenue will be offset by the increase in taxpayer base as explained below in this blog on The Theory of Tax-Enomics.
SEE Blog for rest of this Candu MEMO

BY FAX: 202-638-2716
Attn Concierge Hay-Adams Hotel

DO NOT TELL ME THAT PRESIDENT-ELECT OBAMA IS NOT REGISTERED AT YOUR HOTEL - BELOW IS THE PROOF. FAILURE TO DELIVER THE LETTERS INCLUDED IN THIS FAX IS DERILICTION OF DUTY ON YOUR PART.

Obama Family Living at Hay-Adams Hotel
Jan 07, 2009 6:19 - By: Catherine Lincoln

Hay-Adams Hotel, Washington D.C.
Like Eloise at the Plaza, Malia and Sasha Obama get to make a hotel their home, at least for their first two weeks in Washington D.C.

By Fax: 202-638-2716 (Updated)January 11, 2009President-Elect Barack ObamaThe Hays Adams Hotel- a Registered Guest16th & H Street, N.W.Washington DC
Dear President-Elect Obama
If you would like to see and hear new approaches and solutions to resolve our economic crisis, by turning around our economy, we can show you how to use the Theory of Tax-Enomics, of which I am the founder and foremost authority in the country, to accomplish this We need to use the Theory of Tax-Enomics to solve our financial crisis and stimulate and expand the economy by providing five basic stimuli simultaneously(see my blog for full details):

1. Taxpayer and consumer confidence that the melt down has halted will be revitalised.

2. Taxpayer incentives that provide the Taxpayer-consumer with more disposable income, while preventing foreclosures and stabilizing the housing market.

3. Government jobs programs that include retraining individuals so they can cross train to new jobs, while receiving a living wage during retraining. Examples:
A Solar and Wind Energy WPA program
The Auto Consumer investment Tax Credit Program for energy efficient vehicles.
4. Government must be the immediate consumer of sufficient goods and services that businesses will rehire or create new jobs to produce the increased supply, while government is providing the supported demand for these goods and services. Example – Government purchase of US made Energy Efficient Economically viable vehicles.
5. Government thru the Federal Reserve must establish a Federal Lending Authority and Federal Vehicle Authority that will function like the FDIC and the FHA. By guaranteeing bank loans with a small insurance premium, businesses and individuals will be able to get the necessary credit that is needed in our economy.
. The stimulus must be geared to give the taxpayer worker more disposable spendable income and it should be tied to the creation of private sector jobs. One key is the revision and immediate reduction of the graduated downward tax – the Social Security Payroll tax, offset by removal of the cap on earnings it is subject to.
 Example: Reduce the Social Security rate to 2.50% on the first $200,000 and then to 3.25% on excess over $200,000 with no top cap for employer and employee. Now we have room for a 1.45% Basic Health Care Tax with no cap for both employee and employer that will work like Medicare. Companies will only need then to offer a medi-gap policy to their employees if they want to or can. This solves a lot of problems and will be self financing. More power for the congressional financial buck spent.
For full details on these programs and proposals see my blog WWW.THECANDUMEMO.BLOGSPOT.COM
MRCANDU10 (Cousin of MR.Get-It Done)BY FAX: 202-638-2716
Attn Concierge Hay-Adams Hotel

DO NOT TELL ME THAT PRESIDENT-ELECT OBAMA IS NOT REGISTERED AT YOUR HOTEL - BELOW IS THE PROOF. FAILURE TO DELIVER THE LETTERS INCLUDED IN THIS FAX IS DERILICTION OF DUTY ON YOUR PART.

Obama Family Living at Hay-Adams Hotel
Jan 07, 2009 6:19 - By: Catherine Lincoln

Hay-Adams Hotel, Washington D.C.
Like Eloise at the Plaza, Malia and Sasha Obama get to make a hotel their home, at least for their first two weeks in Washington D.C.
By Fax: 202-638-2716 (Updated)January 11, 2009President-Elect Barack ObamaThe Hays Adams Hotel- a Registered Guest16th & H Street, N.W.Washington DC
Dear President-Elect Obama
If you would like to see and hear new approaches and solutions to resolve our economic crisis, by turning around our economy, we can show you how to use the Theory of Tax-Enomics, of which I am the founder and foremost authority in the country, to accomplish this We need to use the Theory of Tax-Enomics to solve our financial crisis and stimulate and expand the economy by providing five basic stimuli simultaneously(see my blog for full details):
1. Taxpayer and consumer confidence that the melt down is being halted.
2. Taxpayer incentives that provide the Taxpayer-consumer with more disposable income, while preventing foreclosures and stabilizing the housing market.
3. Government jobs programs that include retraining individuals so they can cross train to new jobs, while receiving a living wage during retraining. Examples: a Solar and Wind Energy WPA program  The Auto Consumer investment Tax Credit Program for energy efficient vehicles.
4. Government must be the immediate consumer of sufficient goods and services that businesses will rehire or create new jobs to produce the increased supply, while government is providing the supported demand for these goods and services. Example – Government purchase of US made Energy Efficient Economically viable vehicles.
5. Government thru the Federal Reserve must establish a Federal Lending Authority and Federal Vehicle Authority that will function like the FDIC and the FHA. By guaranteeing bank loans with a small insurance premium, businesses and individuals will be able to get the necessary credit that is needed in our economy.
. The stimulus must be geared to give the taxpayer worker more disposable spendable income and it should be tied to the creation of private sector jobs. One key is the revision and immediate reduction of the graduated downward tax – the Social Security Payroll tax, offset by removal of the cap on earnings it is subject to.
 Example: Reduce the Social Security rate to 2.50% on the first $200,000 and then to 3.25% on excess over $200,000 with no top cap for employer and employee. Now we have room for a 1.45% Basic Health Care Tax with no cap for both employee and employer that will work like Medicare. Companies will only need then to offer a medi-gap policy to their employees if they want to or can. This solves a lot of problems and will be self financing. More power for the congressional financial buck spent.
For full details on these programs and proposals see my blog WWW.THECANDUMEMO.BLOGSPOT.COM
MRCANDU10 (Cousin of MR.Get-It Done)
For full details on these programs and proposals see my blog

WWW.THECANDUMEMO.BLOGSPOT.COM

MRCANDU10 (Cousin of MR.Get-It Done)

A Tax-Enomics Auto Industry Financial Crisis Solution Program

The CANDU MEMO for an alternative Auto Industry Finance Crisis Solution :

THE SHORT-TERM IMMEDIATE SOLUTION:

I have called in a suggestion to members of the Senate Finance Committee for an alternative Auto Industry Finance Proposal.

1. Have the Fed create and fund the FVA (Federal Vehicle Authority -modeled after the FHA).

2. Instead of loaning the auto industry the $34 billion, why not have the FVA order -purchase 3 million (1 million from each of the big 3) of US Made (Jobs In US) of economically priced green cars (hybrids and electric) and resell them or lease them thru auto dealers with Sales Tax Free - low interest government guaranteed tax free auto loans and business credit lines - floor plan dealer financing guaranteed by the Fed's FVA. THE FVA WOULD HAVE TITLE TO THESE VEHICLES until sold or leased - Collateral for the financing.

3. If the dealers can not sell of the green cars fast enough, the FVA could sell or lease them direct to Federal, State and local government agencies - sales tax free and with low interest tax free auto loans or leases.

4. There would also be a 100% reduction and rebate of all Payroll taxes for the month of December 2008 and a 50% cut in payroll taxes employer expense for 3 months for production workers (not Administrative and CEO EXECUTIVES WITH PRIVATE COMPANY PLANES-now driving green to meet Congress) employed working to produce these cars. If the production UAW workers agree to a substantial contribution to lower the costs of these vehicles purchased by FVA, then they too would received the same rebate and reduction for the same period of Payroll taxes withheld (Social Security and Medicare).

5. If we really want to conserve the cash, we could offer banks that would finance this a tax free status on the income earned on the business loans to the auto industry which would be guaranteed by the Fed's FVA .


LONG-Term Auto Financial Crisis Solution

1. The American - US Auto Consumer Investment Tax Credit Program

Historically, we should look back to 1968 and we would see the dramatic effect on auto sales and the auto industry when there was relief from the federal excise tax that had previously been placed on automobiles sold.

Specifically the American - US Auto Consumer Investment Tax Credit is a 10% Federal Cash Tax Credit ($2,000 maximum) that a consumer receives for purchasing a "domestic qualifying"
US Manufactured or A US Assembled Foreign manufactured hybrid or electric automobile (all labor for these vehicles must be US workers for the vehicles to qualify and at least 50% of the material to produce the vehicle must be certified as "MADE IN THE USA')costing the Consumer at the retail price level (with all extras and with a 5 year manufacturer's warranty) $20,000 or less. The Cash Tax Credit for the consumer buyer is exempt from AMT, and can be carried forward if not used up in the year of purchase.

2. The US auto companies that manufacture or assemble the qualifying vehicles will receive TWO TAX CREDITS:

• A 5% (of the Retail Sales Price of the qualifying vehicles as defined above) Federal Cash Tax Credit ($1,000 maximum per qualifying vehicle) that can be applied to the payment of federal payroll taxes (the expense portion limited to direct labor used in the manufacturing, and/or assembly of the qualifying vehicles) per vehicle produced AND SOLD at retail.


• 
  A 5% MADE IN THE USA DOMESTICALLY PRODUCED MATERIAL TAX CREDIT. The credit would be computed on 5% for the cost of all domestically produced steel and other raw materials and products (MADE IN THE USA) purchased AND USED IN A QUALIFYING VEHICLE. The maximum credit could not exceed a $1000 per qualifying vehicle and would be a refundable income tax credit for the auto manufacturers.
  The qualifying vehicles would be required to have to have certain normal features of a comparable sedan or SUV that is not a hybrid or electric vehicle.


• 
  The auto dealers that sell these vehicles would also be eligible for a 2.5%% (of the Retail Sales Price as defined above) Federal Cash Tax Credit ($500 maximum per qualifying vehicle) applicable towards the payment of federal payroll taxes (the expense portion limited to the expense portion of non-owner sales and service personnel).


• 
  The Banks or Auto Finance Companies that provide financing for these qualifying vehicles at interest rates sold not to exceed for the consumer 4% per Annum over a maximum loan period of 5 years will receive a tax exempt status (and from AMT) for the interest earned on this auto financing. The Banks and Auto Finance Companies will be able to offer Tax Exempt bonds to generate the funds for the financing. They will also be able to purchase government insurance from the Federal Reserve's FVA (similar to FHA and FDIC insurance on loans) on qualifying auto loans.
  The states where these qualifying vehicles are sold will be asked to participate in the program by reducing the sales tax rate on the qualifying vehicles sold to a maximum of 2% of the retail sales price ($400 maximum per qualifying vehicle).

Now at first appearances this might appear as a tax give a-way program. However, in reality, by providing all of the above tax incentives (formulated using the Theory of Tax-Enomics) to the American US Consumer and the Auto Industry and related sales and financing parts, it would be a tax revenue raiser , a boon to the US Economy, a positive increase for the US Balance of Trade in the auto industry, a positive impact on Energy Conservation and the Environment as described by the following benefits:

New Jobs and a significant rise in employment would be created in the auto industry WITHIN THE US , which would now expand consumer consumption by these new employees - a real economic expansion. When workers who were laid off in this industry or others seeking employment, are hired, they will be earning money that will be spent in local economies. This will generate other jobs (supply side economics), which will generate other consumer consumption. There will be an increase in tax revenue without raising tax rates, because the local gross national product domestically will be increased from an increase in taxable revenue generated locally by the above. Another bonus will be is that there will be favorable increase in our balance of trade for the US Auto industry.

The impact on the environment from the increase in the use of these autos, that are not gasoline driven, will be substantial. In the operation of their new autos the savings will be substantial to the consumer purchasers of these NON Gasoline driven Autos in their not being subject to price gauging of foreign oil producers (This will definitely put me on the DO NOT CALL list for Venezuela, Saudi Arabia and Iran).

Even the States that lower the sales tax for these vehicles, will generate new tax revenue, because they will be the states where these vehicles will be sold, and the savings to the purchasers and the auto dealers, will be spent, with new jobs created and new taxable revenue generated by an increase in consumer consumption of taxable sales other than the qualifying autos. Additionally, the increased quantity of qualifying vehicles sold, even at the reduced sales tax rates, will probably offset the reduction of taxable revenue from the lower sales tax rate on these qualifying vehicles.

Therefore by providing specificly targeted domestic tax incentives under the Theory of Tax-Enomics, the Federal and the State Governments will have an increase in tax revenue with reduced taxation per taxpayer. The taxpayer had more disposable income for domestic consumption.

In conjunction therewith, these domestic tax incentives will produce a favorable increase in domestic employment ( an increase in domestic jobs) in the auto industry and its related parts, with a corresponding favorable effect on the balance of trade in the US auto industry and the oil industry (less foreign made gasoline purchases). This will help level the playing field for the US Auto Manufacturers, that have had to compete with foreign companies subsidized by their governments, or using cheap labor to compete with.

Additionally, there will be a positive effect on energy conservation and the environment.
THUS MORE POWER FOR THE TAXPAYER'S BUCK SPENT WISELY.

• NOTE: I have found a product that has increased the gas milage on my cars by an average of 30%. I used to average on the road 20 MPG in my 2002 Chrysler Sebring Convertible(6 Cyl). When I used this product on the road my MPG average rose to 28.5 MPG. On my mpg gauge I saw it register at different times and speeds, as high as 40 MPG. A 3 year supply of this product with the sale of existing vehicles in production or on dealer lots would make the vehicles substantially green without engineering changes. The big 3 Auto manufacturer's should test it themselves in their vehicles. It increased the efficiency of the molecules of gas. The Product is called Ethos.

MRCANDU10 (Cousin of MR. Get-It Done)

Alternative Solutions and Tools For the Treasury and the Fed to solve current US Financial Crisis

BY EMAIL and FAX to POTUS and POTUS-Elect for their Monday November 10th 2008 meeting.

THE CANDU MEMORANDUM - FINANCIAL CRISIS SOLUTIONS - UPDATED NOVEMBER 9, 2008 WITH Federal Reserve Bank Insurance Tool and HOME BUILDERS ADDITION-AVOID ECONOMIC PANIC

Urgent President Bush (and President -Elect Obama),Congress, Treasury Secretary Paulson and Fed Chairman Bermanke need to read THIS CANDU MEMO ALTERNATIVE SOLUTION FOR MAIN STREET AND WALL STREET - SPECIFIC CHANGE PROGRAMS TO PROVIDE THE TOOLS TO SOLVE THE FINANCIAL CREDIT CRISIS, TO STABILIZE AND IMPROVE THE HOUSING MARKET VALUES AND THE RESIDENTIAL MORTGAGE FINANCING CRISIS USING THE THEORY OF TAX-ENOMICS. - THIS IS A TIME IS OF THE ESSENCE MATTER AND MUST BE DEALT WITH FORTHWITH.

Every time the Federal Reserve Bank dumps money in to or bails out a bank or investment company it is creating financial fear and panic, because the banks and investment companies have no incentive to start relending and also are keeping the cash for a rainy day.

IMMEDIATE SOLUTION:All the Fed has to do is provide an insurance vehicle for banks to lend each other and for banks to provide commercial loans and credit linesand other required loans (student loans and autos for example). The borrower pays the premium to the Fed. Insurance instills confidence not fear. Using this type of financial lending insurance tool, can be applied globally. The detailed programs are set forth below.

As FDR and Barack have said "ALL WE HAVE TO FEAR IS FEAR ITSELF".

These are Bipartisan alternative FINANCIAL CRISIS solutions that will cut the bailout program by 50 to 75% with more defined and comprehensive results - and will restore consumer confidence in the financial and economic markets.

Special new tool for Treasury Secretary Paulson and Chairman Bermanke- To lubricate the plaque filled financial arteries the Federal Reserve Bank (the "Fed") can sell insurance to banks for a "Fed" guarantee of bank short-term loans between banks - similar to FDIC or FHA guarantees. The insurance, paid for by the borrower,is charged by the Fed Reserve Bank (one method would be a 1/4 point (.25%) for a 25% principal guarantee, 1/2 point (.50%) for a 50 % principal guarantee, 3/4 point (.75%) for a 75% guarantee, and 1.0 Point for a 100% guarantee).

The banks would be able buy similar guarantees on their unsecured and secured business credit lines they give businesses where the businesses will pay a Fed Insurance premium for the guarantee. Based upon the credit a business can be qualified for the appropriate guarantee for the business credit line or loan. This could also be used for auto loans, equipment purchases and student loans, and other financial tools.

By using an FDIC /FHA type insurance premium guarantee program as the basic model (Both finanically proven successful) this will immediately expand the confidence level in the financial markets, because the insurance premium guarantee program will use minimum funds from the FED, and provide maximum available credit availability. A capital reserve ratio of 10 to 1 may be a possible model.
There has to be strict guidelines and adequate oversight for this program to work.

In order to gain more liquidity in the financial credit and residential mortgage market and to provide the proper tax and economic incentives to stimulate home purchases and help stabilize the residential market values, I propose certain changes using the Theory of Tax-Enomics that will be beneficial to the both the borrower, the lender or assignees of securitized mortgage pools and to qualified home builders.

1. The FHA Residential Lender Investment Program: Economic Incentives to decrease the supply of REOs (real estate owned foreclosed homes held by mortgage Lenders)

• The "FHA Residential Lender Investment Program" (FHA-RLIP): should include the limited purchases from the lenders of a percentage of REOs (one type of the toxic assets owned by the banks) using a REX Agreement type program. Specifically, the program would work as follows:

1. The FHA-RLIP will be authorized to purchase a 50% interest in an REO for $.20 on the $1.00 of the purchase price (reduced by the lender's charges for any legal fees, disbursements, sale fees, and late fees on the mortgage balance) paid by the lender at the foreclosure sale.
   
   
2. The Lender will continue to administer and sell the REO. When the REO is sold, if the sale price will not repay the full 50% FHA-RLIP investment interest in the property, the balance of this 50% interest in the REO not recovered from this REO sale, will carry a REX type Agreement (a junior mortgage lien for a 50% interest in the future increase in FMV of the property over the REO sale price for a 10 year period subsequent to the sale of the REO). At the end of the 10 year period, if the REO property is not resold during the period, the lien will be extinguished.



3. The FHA-RLIP will only be authorized to purchase a limited number of REOs from any one lender over the next two years. The lender upon notification from the FHA-RLIP will submit to the FHA-RLIP a an initial list of REOs with the purchase price info and the present FMV info supported by a licensed FHA bank appraisal using 6 comparable sales.



4. The FHA-RLIP by committee will select for the program from the list a number of these REOs not to exceed 50% in current FMV of the total REOs submitted.



5. The FHA-RLIP will also provide a 75% FHA guarantee to existing home builders building loans (the principal balance on August 1, 2008), for those qualified builder company borrowers that have not been delinquent on any payments to the lenders prior to August 1, 2008. New building loans can qualify for a 50% FHA loan guarantee, providing they have no prior defaulted loans (prior to Auguste 1, 2008). Maximum building loan guarantee for any one home shall be limited to $300,000.
6. Add a tax free capital gain exclusion for the sale of investor residential family properties of $250,000 for the next two years. This will stimulate the purchase of foreclosed investor (rental) residential properties.

This program will provide the lenders with a vehicle to expedite the sale of REOs, which will give some immediate liquidity to the lenders or the assignee holders of foreclosed mortgages in securitized pools. It will also provide a stimulus, stabalization and liquidity to the home building market and the residential rental home market.

2. Using the Theory of Tax-Enomics, provide tax and economic incentives as consideration to Borrowers, Lenders and Assignees of Securitized Mortgage Pools ("Assignees")to restructure and modify existing mortgages on owner-occupied homes in foreclosure or in mortgage default of 2 or more payments as indicated below. The purpose being to make it economically feasible and desirable for the borrowers to enter into the modification agreement and remain in their homes.

Multi family homes up to 4 family would be eligible for this program and the others listed above and below, on a percentage basis of the owner-occupied portion to the rental portion of the residence.

1. If the current appraised value of the owner-occupied residential home has been reduced below the principal balance of the existing mortgages on the property, the lenders or assignees must agree to modify and reduce the principal mortgage balances to an amount not to exceed 80% of the current appraised value. This new mortgage principal balance would be guaranteed by the FHA. Maximum reduced mortgage principal can not exceed $975,000.



2. Only the reduction amount of the mortgage principal (all late fees of any type will be eliminated in the computation) will be sold to the new Resolution Mortgage Investment Trust Fund (RMITF) for 25 cents on the $1.00, which will receive a junior lien against the property under a "REX TYPE AGREEMENT" - a 50% interest in the FUTURE INCREASE IN VALUE OF THE PROPERTY WHEN SOLD or terminated. This junior lien will require no monthly payments and will only mature upon sale or termination. Alternatively, the Lender can keep the junior mortgage lien (REX type agreement) under the same terms as an investment.



3. This lender or assignees will be granted permission for maximum modification administrative fee of $1,000 to be rolled into the new mortgage principal as long as this fee does not increase the new mortgage principal balance above the 80% of the current appraised value.



4. The mortgage terms must be converted to a maximum 40 year fixed rate term mortgage not to exceed 1% above the current prime rate at the time of the agreement.



5. The mortgage would have at least one full month of being interest free to the borrowers and not require any payment until the first of the month, following the first full month following the signed agreement. The lenders will not receive short-term interest under this agreement.

The tax incentives to enter into such agreement for the lenders, or any assignees, would be several part.

1. The entire remaining principal balance (maximum of 80%of the current appraised value) held by the lender or any assignees would be converted to a tax free bond for its new remaining term. This means the income on these mortgage bonds would be tax free to the recipient.
   
2. For each dollar of principal balance of the mortgage loan in foreclosure or in mortgage default reduced by the lender or the assignees, said lender or assignees will be allowed to convert to tax free income on the principal balance of other mortgage bonds held equal to triple the amount of principal reduction.
3. If the lender options to take the junior mortgage lien under the same terms as the RMITF, it will receive a 10 year tax credit of 100% of any capital gain tax received on sale of the property.

The Owner-Occupied mortgage borrower would receive tax and economic incentives, in addition to those listed above, to enter into the mortgage modification agreement, subject to certain limitations.

1. The lender will be required to delete all derogatory credit info from the borrower's mortgage file and notify all three credit reporting agencies accordingly.
   


2. The qualifying borrower(s) who enter into the modification agreement will receive a $20,000 nonrefundable tax credit spread over a ten year period of the agreement. $4,500 in the first year of the agreement, $2,000 in 2Nd thru 5Th years ($8,000), and $1,500 for 6Th thru 10Th years ($7,500). Homeowners have more financial needs in the early years after defaulting on their mortgage.



3. The credits would be nonrefundable. Unused credits could be carried forward thru the 10th year. Any unused credits after the 10th year would expire.



4. If the owner occupied residence is sold during the 10 year period, the remaining unused credits will be permanently extinguished. The incentive is that home owners should stay in their homes during the 10 year incentive period.



5. The used tax credits will carry a deferred tax impact in the reduction on a 2 for 1 basis of up to $40,000 of the taxable gain exclusion, Each $1.00 of credit used will reduce the taxable gain exclusion by $2.00.



6. The reduction in the taxable gain exclusion could be deferred by an investment in a new owner occupied home, if it equals at least 50% of the original home purchase price, including improvements. Homeowners, who need to downsize, should not be penalized for doing so.

3. Increase in tax incentives to stimulate home purchases:
Using the Theory of Tax-Enomics, I propose the following changes in the tax law.

1. A $20,000 Residential Home Purchase Investment tax credit for the purchase of a new owner-occupied residential primary home that would be spread over a 10 year period.


2. Multi family homes up to 4 family would be eligible for this program and the others listed below, on a percentage basis of the owner-occupied portion to the rental portion of the residence.


3. $6,500 in the year of purchase, $1,000 in 2Nd thru 4Th year ($4,000), $2,000 in the fifth year, and $1,500 for years 6Th thru 10Th ($7,500). Homeowners have more financial needs in the early years after the purchase. The incentives have been made to encourage the homeowner to stay in their homes for at least 10 years.



4. The credit would be nonrefundable, but unused credits could be carried forward thru the 10Th year. Any unused credits after the 10Th year would expire.



5. If the owner occupied residence is sold during the 10 year period, the remaining unused credits will be permanently extinguished. The incentive is that home owners should stay in their homes during the 10 year incentive period.



6. The used tax credits will carry a deferred tax impact in the reduction of up to $40,000 of the taxable gain exclusion, on a 2 for 1 basis. Each $1.00 of credit used will reduce the taxable gain exclusion by $2.00.



7. The reduction in the taxable gain exclusion could be deferred by an investment in a new owner occupied home, if it equals at least 50% of the original home purchase price, including improvements. Homeowners, who need to downsize, should not be penalized for doing so.


8. Home Builders will be eligible for a $1,000 Federal payroll tax expense credit for each new home completed (must have a valid Certificate of Occupancy) after the first 60 days from enactment of the legislation. This payroll tax expense credit program will be instituted for a period of one year after the 60 day period.

4. FREE THE RETIREMENT ACCOUNTS - KEOS, IRAS and Corporate Pension Plans.

Under certain 401K plan and Corporate Retirement Plans, a participant is allowed to borrow funds from these accounts , subject to strict limitations, without a tax impact. However this is a loan that requires repayment and the interest is not deductible.The present tax law makes the withdrawal in most cases as economically unfeasible.

In order to make it easier for prospective homeowner-borrowers- to use funds in their retirement accounts for the purchase of a residential home (owner-occupied), I propose using the Theory of Tax-Enomics for changes in the tax laws as follows:

1. If the tax law were changed to allow a withdrawal for a home purchase without current tax impact, the withdrawal becomes an economically feasible and advantageous transaction for the prospective homeowner-borrowers. It allows the borrower to have more equity in his new owner-occupied home, which may represent a significant asset at retirement age. This equates to reduction in retirement asset account from which the funds were taken.



2. The only tax impact would be if the owner occupied home, when sold in the future, would have a reduced taxable gain exclusion.



3. If the taxpayer uses the proceeds within a set-time frame to purchase another primary owner-occupied residence, the reduction in taxable gain exclusion, at the option of the taxpayer can be transferred to the new residence - in whole or in part.



4. The interest on eligible retirement account loans for home purchases should be deductible as qualifying mortgage loan interest, providing it is repaid like a mortgage over a term not to exceed the 65 years less the borrower's age. IRAs should be included in accounts eligible for these permissible "mortgage loans."



5. An allowed administrative fee, not to exceed 1/2% of the interest charged on the loan, which interest income when repaid will go directly back into the participant's retirement account.



6. Modify Qualifying Income for Residential Mortgage Financing to include the nontaxable for mortgage underwriting purposes the nontaxable income earned on retirement tax deferred accounts (which income is not reported on the borrower's tax returns). is a nontaxable income that many borrowers have, that should be used in their qualifying debt to income ratio, that presently to my knowledge is never considered. This income should be reduced by 2.55% (the 10% tax penalty for early withdrawal less the 7.45% payroll taxes that it is not subject to). If the borrower does not have sufficient income to pay his mortgage at any point this additional income is available to the borrower to subsidize his taxable income.

Note: The above programs, in the long-run, will be self-financing with deferred tax impact. Tax Incentives - Tax Credits or exemption from tax are only granted where the participants are doing services for the economy or assisting the economy by stimulating and restoring consumer confidence in the housing market values and residential mortgage financing. In each case the parties must participate financially to get the tax and economic incentives.

We will be forwarding seperately other UPDATED CANDU MEMOS for solutions to many of our nation's crisis problems. All of these solutions have been previously sent by fax and email.

I am trying to serve my country with the tools that I have. Please give me the respect to provide a personal response, even if you disagree with my solutions (but please tell me why if you can).

MRCANDU10 (Cousin of MR.GET-IT DONE)

The Theory of Tax-Enomics-Presidential Economic Solutions

For The President, the President-Elect, the Transition Team, the Congress, the Secretarys of the Treasury (Present and to be) , and the Federal Reserve Chairman -UPDATED and REVISED 11/22/08





The Theory of Tax-Enomics is the use of Federal, State and local tax laws to produce positive economic and social change










IMMEDIATE FINANCIAL CRISIS - RECESSION STOPPING SOLUTIONS FOR THE PRESIDENT , THE PRESIDENT-ELECT AND CONGRESS BY AN ECONOMIC STIMULUS PACKAGE WITH Specific programs WITH SELF-FINANCING SOURCES OF FUNDING TO:

1. REVERSE THE INCREASE IN UNEMPLOYMENT BY STOPPING THE LOSS OF JOBS IN THE US DUE TO THE CURRENT FINANCIAL CRISIS AND INCREASE IN ACCELERATED DEFLATION - SPECIFICALLY IN THE AUTO INDUSTRY AND IN THE HOUSING INDUSTRY.

2. PUT MONEY IMMEDIATELY IN AMERICAN TAXPAYER CONSUMER POCKETS FOR PROPER SPENDING WITH A SHORT-TERM- IMMEDIATE ECONOMIC STIMULUS PROGRAM.

3.

3. FOLLOWED BY A 2YEAR LONG-TERM STIMULUS PROGRAM.

1. THE THREE MONTH FREEZE PROGRAM ON A 50% REDUCTION OF ALL Federal PAYROLL TAXES (Social Security and Medicare Tax Withheld from employees and paid as an expenses by employers) ON ALL WAGES AND SALARIES for existing employees and a SIX MONTH FREEZE under the same program for newly hired employees.

2. INCREASE FOR THE NEXT THREE MONTHS ALL STATE UNEMPLOYMENT INSURANCE BENEFITS.

• Every person, presently on Unemployment or who goes on unemployment during the three month period, will receive 110% of the allowed benefits during this three month period.

IT DOES NOT REQUIRE THE GOVERNMENT TO ISSUE ANY NEW CHECKS.

• The employers would take the deduction for both the withholding given to the employees and their expenses portion on their quarterly Fm 941.
• The taxpayers who are presently on unemployment insurance benefits will receive the 10% increase directly in their existing checks. Any new taxpayers going on unemployment during this three month period would also receive 110% benefits for the remainder of the three month period. Whatever additional benefits paid out by the states, they would bill the federal government for the additional benefits paid by the states.

HOWEVER, EVERY WORKING AND NEWLY HIRED WORKING TAXPAYER WILL SEE IMMEDIATE BENEFIT. By using supply-side economics there will be no loss of tax revenue as explained below in THE THEORY of Tax-Enomics.

This program is designed to put IMMEDIATELY MONEY IN THE ECONOMY AND THE AMERICAN TAXPAYER- CONSUMER WITHIN 30 DAYS OF PASSAGE BY CONGRESS. It will GIVE IMMEDIATE benefit to both the individual American Taxpayer Consumer and the American Business Taxpayer.

This program could plug the hole in the dyke until other SPECIFIC programs can be put in place.

The loss in tax revenue will be offset by the increase in taxpayer base as explained below in this blog on The Theory of Tax-Enomics.

FOR THE LONG-TERM ECONOMIC STIMULUS - TO TAKE EFFECT WITHIN 6 MONTHS:

THE PRESENT PROPOSED NEW TAX STIMULUS TAX REBATE PROGRAM may help the economy on a limited basis, but it will not solve the inherent economic problems that must be faced, and may not substantially stimulate domestic consumption to create domestic jobs. It will help some people on a temporary basis, who need money to make ends meet, but it is not enough.

However, Congress, the President and the President-Elect need the practice of working together in a bi-partisan manner.

The mortgage part of the previous package (increase in Fanny Mae and Freddie Mac mortgage limits to $729,000) is excellent because it will provide some additional liquidity in the mortgage and housing market, if the banks will return to making loans..

The corporate part of the previous stimulus package was excellent. HOWEVER, it should be revised in a new stimulus program to favor DOMESTICALLY produced equipment and R&D, BY PROVIDING, BESIDES THE DEDUCTION, ADDITIONAL INCOME TAX CREDITS FOR CERTIFIED DOMESTICALLY PRODUCED BUSINESS EQUIPMENT .

THE FOLLOWING PROPOSED PROGRAMS ARE SPECIFICALLY DESIGNED TO STIMULATE THE ECONOMY WITH DOMESTIC JOBS AND DOMESTIC CONSUMPTION - THEY ARE ALSO DESIGNED TO GIVE THE MIDDLE TO LOWER INCOME TAXPAYER CONSUMERS MORE DISPOSABLE INCOME SO THEY CAN PAY THEIR BILLS AND KEEP THEIR HOMES.

• THE AMERICAN -US AUTO CONSUMER INVESTMENT TAX CREDIT PROGRAM
• 
  THE AMERICAN - US HOME OWNER INVESTMENT TAX CREDIT PROGRAM
  
  THE RETIREMENT ACCOUNT HOME FREEDOM PROGRAM
  
  THE FORECLOSURE AVOIDANCE ASSISTANCE PROGRAM
  
  THE CREDIT CARD FINANCE CHARGE FREEZE PROGRAM
  
  THE GREEN JOBS With "MADE IN USA" CERTIFIED MATERIALS TO INCREASE CONSUMER GOODS CONSUMPTION PROGRAM
  

TO SEE HOW THESE PROGRAMS WILL WORK I AM PROVIDING FIRST AN

Explanation of The Theory of Tax-Enomics:

The first key principle of the Theory is the recognition that for GOVERNMENTS TO INCREASE TAX REVENUES,

1. it is not necessary to always increase TAX RATES

and the THEORY OF TAX-ENOMICS USES THE PRINCIPALS OF SUPPLY-SIDE ECONOMICS IN ITS APPLICATION BY USE OF A VERY SIMPLE FORMULA.

There are FOUR ELEMENTS of a TAX-ENOMICS FORMULA to produce an increase in tax revenues for any particular tax.

• (A) The number of TAXPAYERS SUBJECT TO THE TAX.
• (B) The total amount of TAX REVENUE PER TAXPAYER THAT WILL BE TAXED. (This is the primary element for positive economic effect)
• (C) The TAX RATE TO BE APPLIED TO THE TAX REVENUE.
• (D) The TIME PERIOD that the TAX RATE IS APPLIED TO THE TAX REVENUE PER TAXPAYER.

THE FORMULA IS very simply (A) X (B) X (C) X (D) = TOTAL TAX REVENUE PRODUCED BY A PARTICULAR TAX.

• By application of the above simple formula for any particular tax, it is easy to see that
• A. AN INCREASE IN ANY ONE OF THE ELEMENTS CAN PRODUCE AN INCREASE IN TAX REVENUE.
• B. IT IS POSSIBLE TO DECREASE THE TAX RATE IF WE CAN INCREASE SUFFICIENTLY THE AMOUNT OF TAX REVENUE PER TAXPAYER OR IF WE CAN SUFFICIENTLY INCREASE THE NUMBER OF TAXPAYERS.

2. The second key principal of the THEORY OF TAX-ENOMICS is:

• (A) An increase in the NUMBER OF TAXPAYERS and/or the AMOUNT OF TAX REVENUE PER TAXPAYER may actually be induced by DECREASING THE TAX RATE and or providing tax incentives within the economy that generate both an increase in total industry and consumer spending. The key here is for a Tax Stimulus program to work properly, that the decrease in tax paid by the taxpayer consumer or the business taxpayer consumer should be directly related to how these taxpayers spend their money in the purchase of consumer and business products, and expansion of the economy.

FOR EXAMPLE:

1. The NUMBER OF TAXPAYERS could be increased by removing them from the rolls of the unemployed. If new jobs are created by tax incentives (reductions in tax rates and/or abatements in total for a particular tax), the new taxpayers will generate new possible tax revenue would be available for application of the taxes, which they were not doing before.

2. With every new job that is created, a new taxpayer (or a taxpayer who has left another job and could have become unemployed for a period of time) joins the tax rolls and brings with him new tax revenues which he will spend in the economy, which increase GNP(GROSS NATIONAL PRODUCT).

3. For every job that leaves the US economy and goes overseas, without that person losing the job, maintaining his level of income, his consumer spending is reduced because his personal budget has been reduced.

4. If we can increase the amount of spendable earned and or passive income received by a taxpayer, we could lower the TAX RATE per taxpayer because the AMOUNT OF TAX REVENUE PER TAX PAYER IS INCREASED BY THE TAXPAYER'S INCREASE IN HIS PERSONAL REVENUE AVAILABLE TO THE TAXPAYER TO PAY FOR THE TAXPAYER'S NECESSITIES AND ON THE TAXPAYER'S SPENDING FOR CONSUMER PRODUCTS WHICH HELPS THE LOCAL ECONOMY AND CREATES THE DEMAND FOR NEW JOBS.

THE AMERICAN CONSUMER - is the key to our economy.

The driving force for our economy has always been the American Consumer and the American Tax Payer.

• When there is a lack of confidence by the American Consumer our economy and all of it's inter-related parts slow down and give the appearance that we are heading for a recession or worse.

• When the American Consumer feels confidence in his future, he increases his financial consumption of goods and services.

• When the American Consumer increases his financial consumption of goods and services, our economy expands with an increase in demand for consumer goods and services, particularly if these goods are certified as domestically produced ("MADE IN THE USA"). As other foreign governments do, the US Government and State Governments need to subsidize by preferential tax incentives goods and services that are domestically produced. This will level the international playing field.

• This increase in demand for goods and services then drives our domestic industrial and manufacturing sector to expand production, with an increase in gross national product of all of its related services and product supporting companies.

Conversely when the American Consumer and the American Domestic Businesses lose their confidence in our economy, all demand shrinks, and there is a contraction and reduction in the production of all domestic goods and services. Some people would call this "Supply Side Economics".

Additionally, when the labor to produce the goods and services consumed domestically is obtained a cheaper cost overseas, then we have both a loss of tax revenue and domestic consumption revenue, which results in a loss of domestic jobs from decreased domestic employment.

• If government wants to use this Supply Side Economics principle to increase consumption by the American Consumer, to avoid a recession and bring the economy to fuller domestic employment, it must provide the American Consumer with the proper incentives that will cause him to have the financial ability to increase his domestic consumption and to generate domestic US employment. Consumer confidence rises when domestic US employment rises and the consumer has more DISPOSABLE income.

This is where The Theory of Tax-Enomics can provide government with the tools to effect these positive economic changes.

History is a great source for finding the tools for positive economic change. The economic effects of historical tax incentives used previously is definitely invaluable in developing new tax incentives to produce positive economic and social change.

• The following are two specific examples of NEW positive economic Tax incentives programs that the federal government could offer to effect positive economic domestic change, and thus positive social change resulting there from:

EXAMPLE NO. 1: The American - US Auto Consumer Investment Tax Credit Program

Historically, we should look back to 1968 and we would see the dramatic effect on auto sales and the auto industry when there was relief from the federal excise tax that had previously been placed on automobiles sold.

• Specifically the American - US Auto Consumer Investment Tax Credit is a 10% Federal Cash Tax Credit ($2,000 maximum) that a consumer receives for purchasing a "domestic qualifying"

  US Manufactured or A US Assembled Foreign manufactured hybrid or electric automobile (all labor for these vehicles must be US workers for the vehicles to qualify and at least 50% of the material to produce the vehicle must be certified as "MADE IN THE USA')

  costing the Consumer at the retail price level (with all extras and with a 5 year manufacturer's warranty) $20,000 or less. The Cash Tax Credit for the consumer buyer is exempt from AMT, and can be carried forward if not used up in the year of purchase.

• The US auto companies that manufacture or assemble the qualifying vehicles will receive TWO TAX CREDITS:

1. A 5% (of the Retail Sales Price of the qualifying vehicles as defined above) Federal Cash Tax Credit ($1,000 maximum per qualifying vehicle) that can be applied to the payment of federal payroll taxes (the expense portion limited to direct labor used in the manufacturing, and/or assembly of the qualifying vehicles) per vehicle produced AND SOLD at retail.
2. A 5% MADE IN THE USA DOMESTICALLY PRODUCED MATERIAL TAX CREDIT. The credit would be computed on 5% for the cost of all domestically produced steel and other raw materials and products (MADE IN THE USA) purchased AND USED IN A QUALIFYING VEHICLE. The maximum credit could not exceed a $1000 per qualifying vehicle and would be a refundable income tax credit for the auto manufacturers.

The qualifying vehicles would be required to have to have certain normal features of a comparable sedan or SUV that is not a hybrid or electric vehicle.

• The auto dealers that sell these vehicles would also be eligible for a 2.5%% (of the Retail Sales Price as defined above) Federal Cash Tax Credit ($500 maximum per qualifying vehicle) applicable towards the payment of federal payroll taxes (the expense portion limited to the expense portion of non-owner sales and service personnel).

• The Banks or Auto Finance Companies that provide financing for these qualifying vehicles at interest rates sold not to exceed for the consumer 4% per Annum over a maximum loan period of 5 years will receive a tax exempt status (and from AMT) for the interest earned on this auto financing. The Banks and Auto Finance Companies will be able to offer Tax Exempt bonds to generate the funds for the financing. They will also be able to purchase government insurance from the Federal Reserve (similar to FHA and FDIC insurance on loans) on qualifying auto loans.

• The states where these qualifying vehicles are sold will be asked to participate in the program by reducing the sales tax rate on the qualifying vehicles sold to a maximum of 2% of the retail sales price ($400 maximum per qualifying vehicle).

Now at first appearances this might appear as a tax give a-way program. However, in reality, by providing all of the above tax incentives (formulated using the Theory of Tax-Enomics) to the American US Consumer and the Auto Industry and related sales and financing parts, it would be a tax revenue raiser , a boon to the US Economy, a positive increase for the US Balance of Trade in the auto industry, a positive impact on Energy Conservation and the Environment as described by the following benefits:

1. New Jobs and a significant rise in employment would be created in the auto industry WITHIN THE US , which would now expand consumer consumption by these new employees - a real economic expansion. When workers who were laid off in this industry or others seeking employment, are hired, they will be earning money that will be spent in local economies. This will generate other jobs (supply side economics), which will generate other consumer consumption. There will be an increase in tax revenue without raising tax rates, because the local gross national product domestically will be increased from an increase in taxable revenue generated locally by the above. Another bonus will be is that there will be favorable increase in our balance of trade for the US Auto industry.
2. The impact on the environment from the increase in the use of these autos, that are not gasoline driven, will be substantial. In the operation of their new autos the savings will be substantial to the consumer purchasers of these NON Gasoline driven Autos in their not being subject to price gauging of foreign oil producers (This will definitely put me on the DO NOT CALL list for Venezuela, Saudi Arabia and Iran).
3. Even the States that lower the sales tax for these vehicles, will generate new tax revenue, because they will be the states where these vehicles will be sold, and the savings to the purchasers and the auto dealers, will be spent, with new jobs created and new taxable revenue generated by an increase in consumer consumption of taxable sales other than the qualifying autos. Additionally, the increased quantity of qualifying vehicles sold, even at the reduced sales tax rates, will probably offset the reduction of taxable revenue from the lower sales tax rate on these qualifying vehicles.

Therefore by providing specificly targeted domestic tax incentives under the Theory of Tax-Enomics, the Federal and the State Governments will have

• an increase in tax revenue with reduced taxation per taxpayer. The taxpayer had more disposable income for domestic consumption.
• In conjunction therewith, these domestic tax incentives will produce a favorable increase in domestic employment ( an increase in domestic jobs) in the auto industry and its related parts, with a corresponding favorable effect on the balance of trade in the US auto industry and the oil industry (less foreign made gasoline purchases). This will help level the playing field for the US Auto Manufacturers, that have had to compete with foreign companies subsidized by their governments, or using cheap labor to compete with.
• Additionally, there will be a positive effect on energy conservation and the environment.

THUS MORE POWER FOR THE BUCK SPENT!

EXAMPLE NO. 2: The American - US Home Buyer's Consumer Investment Tax Credit Program with a Foreclosure Assistance Program.

History again has an excellent example if we look at

1. the current tax credits started in 2005 available for new energy efficient homes for contractors, for new energy efficient equipment purchases for existing homes, and commercial properties.
2. a previous federal tax credit (maximum of $2,000) that was given over 25 years ago (but not available today) to home purchasers. The credit at that time was given to stimulate new residential home purchases. It was well received by home buyers at that time and was a major stimulus to home purchasers at that time.

As with the domestic auto industry, the American Consumer Home Buyer, is a major driving force in our economy. The purchase of a family home for your residence is a major part of the American dream, and is probably the major investment during a life time, that a family home-owner will make. The family home-owner is both a user and an investor.

• Real Estate has always been a major investment vehicle for the American Consumer, because the family home buyer is both a user and an investor in the transaction to purchase a home. The family home purchased for personal residential use, has also been a major source of retirement funds for many seniors who have sold them and downsized to smaller residences or rental units, so they will have funds for their retirement.

At present we have a total lack of confidence by potential family home-buyers and sellers in the future value of the home as an investment. In addition we have a complete financial contraction in residential mortgage financing. This has caused a major decrease in home values during the past year creating many upside down mortgages. The residential real estate market may have been overpriced by the prior ease of obtain residential mortgage financing. In addition, certain mortgage products were developed by the lenders, that induced many home buyers to over extend themselves in the purchase of their homes.

• However, we are now faced with a consumer confidence in home purchases. Every time a home buyer looks to buy a home, there is a fear that their investment my be worth less a year or two from now.

• They expect the prices will come down, even though there was an ample supply of low rate fixed mortgages available to "qualified" home buyers. It has placed a major downturn in our economy, particularly in the residential real estate industry (Construction of New Homes) and related supporting industries (home repairs and improvement industry).

• Consequently, with the Sub-Prime Mortgage Market having major devastation - a total melt-down, related mortgage lenders and investors are facing a severe credit crisis throughout the entire residential mortgage finance industry.

• Devastated mortgage banks (that over indulged) have been forced out of business or into bankruptcy.

• Many residential home-owners, particularly those that used sub-prime mortgages to purchase their homes and investment homes, have been defaulted and foreclosed and many others are facing imminent foreclosure.

• Additionally, under present tax laws, if home-owner sells his primary residence he can not deduct the loss on its sale, if the home is sold for a price less than its original cost plus improvements.

• Further, if the homeowner borrower is forced to do a "short sale" (bank agrees to the sale of the property and agrees to"forgive" the borrower(s) the deficiency from the short sale in the payoff of the mortgage. However, under present tax this "forgiveness of debt" is a taxable event and can have severe tax consequences to the home owner(s) involved in the "short sales."

• Foreclosures, depress the market value of surrounding homes and materially effect home owner consumer confidence. The far reaching effects of this crisis, many economists have said may cause a more severe recession if not dealt with.

• Many government officials and politicians have stated that we want direct assistance to credit worthy home mortgage borrowers, so that they will not lose their family homes (the President recently stated that he would like to develop a plan for lenders to help "credit worthy" borrowers from foreclosure).

Well we have stated the current problems (and there certainly are many interrelated problems here). Now lets look at different solutions and specific comprehensive plans to reverse this problem. Please note that there is a separate CANDU MEMO blog on insurance by the Federal Reserve Bank, which should be also used in conjunction with programs outlined below.

A. THE RETIREMENT ACCOUNT HOME FREEDOM PROGRAM

• Free the IRAs, Pension Plans, Keogh Plans to assist home buyers and borrowers to purchase homes and avoid foreclosures. Specifically, we need to change the tax laws to do the following (using the tools from the Theory of Tax-Enomics) as follows:

Present tax law applies a severe penalty on withdrawal of funds from an IRA or a Keogh plan, before IRS specified retirement ages. Additionally, the withdrawal is taxable income to the taxpayer.

SOLUTION:

• Allow withdrawal of funds from an IRA-SEP, Pension Plan, 401K Plan, or Keogh Plan on a tax free basis in amount equal up to 1/2 of the present tax law exemptions for family primary home residence sales (up to $250,00 for the purchase by joint owners of a family residence and $125,000 of an individual owner of a family residence).

• A Purchase of a family home(new or replacement). The amount withdrawn will become a down payment that will be recorded as a junior mortgage lien against the property (without the payment of any state mortgage tax). Special rules could be set up that would allow parents of a new family home-owner purchaser to also withdraw funds from their retirement accounts on the same tax provisions.

The mortgage lien will thus become an asset held in the retirement account (IRA-SEP, Pension Plan, or KEOGH). It will be a lien only, not requiring any payment of interest or principal, EXCEPT upon sale of the home. It will only become taxable, without any early distribution penalty, WHEN THE HOME IS SOLD AND NOT REPLACED IF UNDER THE AGE OF 60, but it can be sheltered tax wise AS PART OF the existing tax free gain exemption now allowed under federal tax law ($500,000 for joint returns and $250,000 for individuals). The taxable lien would become a reduction in the cost basis of the home sold.

Upon sale, a form will be required to be filed with the IRS disclosing the transaction of sale for the release of the mortgage lien as the IRS will also be named in the mortgage lien.

• By filing the information form (similar to or part of the 1099B that is also required to be filed upon a sale of a family residence), the IRS and the borrower's retirement account lien will automatically be released without the payment of any funds to the IRS.

• The taxpayer would be allowed to avoid any tax on the transaction or a part thereof, if he does a "rollover" of his retirement account mortgage lien back into the existing retirement account or an IRA Rollover account. He could also avoid the tax if at least 50% of the sale proceeds are invested in a new family residence. Taxpayers should not be discouraged from down-sizing, when near retirement or empty nested.

In the case where parents have withdrawn funds, the children upon sale without reinvestment in a new home, to avoid tax could put the money into a "rollover" IRA retirement account belonging to them, or if setup that way, in a "rollover" IRA retirement account of the parents. If they reinvest funds in a new home, they would be allowed to transfer the mortgage lien to the new home without tax consequence.

• The asset mortgage lien when withdrawn from the retirement - Rollover IRA account reduces the tax free capital gain exemptions for the property sold in the amount of the liens withdrawn by reducing the cost basis of the home sold in computing any taxable gain from the sale.

This program will not be a loss in tax revenue because ultimately the income becomes taxable when it can be afforded by the taxpayer, as the retirement account programs were intended to do.

B. FORECLOSURE AVOIDANCE ASSISTANCE PROGRAM

• In order to avoid foreclosure of a family residence, the borrowers or their parents, would be allowed a tax free withdrawal of funds from an IRA-SEP account, a 401K, a Corporate Pension account, or a Keogh account, to reduce an existing mortgage on the property to a maximum of 50% of existing federal tax law exemptions for family primary residence sales (described above). This withdrawal would become a combined junior mortgage lien in favor of the borrower(s) or their parents respective retirement account. The same rules described above would be used under this plan.

• A second plan to avoid foreclosure ,in conjunction with raising FANNY and FREDDIE MAC LOAN LIMITS TO $725,000.00 on family primary owner occupied residences ,would be that the borrower(s) would become eligible for A FIXED RATE LOAN not to exceed 1.0 % below the current prime rate.

• The lenders would be eligible for an FHA guarantee (with FHA premium insurance on the guarantee portion) on 25% of their original mortgage, IF they give the borrower(s) a "Rate-Term" refi at a fixed rate not to exceed 1.0% below the current prime rate.

• The borrowers, would NOT have to prove their income or qualify by credit or appraised home value.

• Under this plan, the lender (to qualify for this 25% FHA Loan guarantee), would have to agree that

1. All delinquent payments at the original payment amount under the original loan agreement and its inception interest rate (without any late charges or fees which the lenders would have to agree to waive), would be added to the back end of the indebtedness without additional interest cost, but the total revised mortgage can not exceed the original mortgage amount for which they have a mortgage lien.
2. Additionally to keep the payments from rising the existing loan term would be extended to a term of 35 (or up to a maximum of 40) years to lower the payments.The new loan payments, including the FHA Insurance premium payments can not exceed the original loan payment amounts.
3. The lender would be required to notify all three credit bureaus to remove all derogatory credit with respect to the mortgage account.
4. To expedite the process, the lender would be allowed to charge a maximum fee of $1,000.00. However, this fee must be rolled into the new loan and be added to the back of the loan, and can cause the new loan amount to exceed the original loan amount.

In order to induce the lenders to use this program, the lenders would be entitled to change the existing mortgage bond into a 50% tax free bond (not subject to AMT). This would mean that the holder of this mortgage would receive interest income on this revised mortgage bond on a 50% tax free basis (not subject to AMT).

This plan might sound complicated, but it could be made to work. The reason is that for the lenders and the borrowers, by avoiding foreclosures they will have a substantial savings in cost and they keep the family in the home. . This program would be very workable for the borrower(s) who are easily caught up in a quagmire. It might be complicated for the lenders, but it would be a simple workable solution for the family home owner borrower(s).

• They would be getting a fresh start and they would be able to
  stay in their family homes.
• The lenders would have an stable asset in their
  balance sheet, and not a non-productive REO (bank Real Estate Owned), which is a fallow asset in their balance sheet, which is sold after foreclosure at a substantial loss.
• These revised mortgage bonds would become an attractive
  mortgage investment because of the 25% FHA Guarantee and the 50% Tax Free basis for the interest income earned on these mortgage bonds.

THE CREDIT CARD FINANCE CHARGE FREEZE PROGRAM

REDUCE IMMEDIATELY ALL CREDIT CARD FINANCE CHARGES TO A MAXIMUM OF 9.9% FOR 5 YEARS- STOP THE REAL PREDATORY LENDERS - THE CREDIT CARD COMPANIES AND THE BANKS THAT
CHARGE ON UNSECURED LOANS INTEREST RATES OF 30% TO OVER A 1000% THRU HIDDEN CHARGES.THEY LOBBY CONGRESS CONTINUALLY FOR PROTECTION AND RECEIVE A LEGAL LICENSE TO RAPE FINANCIALLY MIDDLE TO LOW INCOME FAMILIES - THE PEOPLE WHO CAN LEAST AFFORD TO PAY.

• Perhaps the President, the President-Elect and Congress should discuss this in more depth. The banks, who have had substantial losses from the Sub-Prime Mortgage crisis, are INCREASING ATM FEES, BANK FEES, CREDIT CARD LATE FEES, to make up for their recent losses. Again the people who can least afford to pay will suffer from this legalized loan sharking by these "predatory lenders".
  

THE GREEN JOBS TO INCREASE CONSUMER GOODS CONSUMPTION PROGRAM

America is in desperate need of an infrastructure construction program for our envirionment and our economy. We need these jobs filled here with US workers to rebuild our infrastructure and safeguard our economy. New jobs means new available consumer dollars earned to spent in the economy.

ALL GREEN JOBS PROGRAMS SHOULD STIPULATE THAT, IF AVAILABLE IN THE US, AT Least 75% Of ALL MATERIAL (EXAMPLES CONCRETE, STEEL , PLASTICS ETC) USED IN THESE JOBS MUST BE MATERIAL THAT IS MADE IN THE USA (THE MATERIAL WOULD HAVE TO HAVE A CERTIFICATION THAT IT IS "MADE IN THE USA"). This is important, because even if the material costs more that if purchased overseas, it generates US Domestic jobs. The additional cost is offset by new tax revenue from an expanded US Taxpayer base, without having to raise tax rates.

This is a no-brainer. Whatever we spend will come back ten fold in savings and new tax revenue from an expanded tax base without having to raise tax rates.

There are related Programs using Tax-Enomics for Social Security, Energy Conservation, and the environment which are presented in a separate blog at this blog site.

The above programs will be updated and expanded in the future at this blog with particular ideas and additional program recommendations using The Theory of Tax-ENOMICS.

Like General MacArthur said "I SHALL RETURN", or if you like it better Like The TERMINATOR said "I'll BE BACK"

MRCANDU10 (Cousin of MR. Get It Done)

We are trying to steer the ship to you Mr. President -Elect