Friday, November 28, 2008

Part III: SPIRA Benefits Cont"d

SPIRAs are accounts established voluntarily by individuals to provide for securing benefits that are important for a quality life. The first priority would be health insurance. Every SPIRA would provide some help in paying for this benefit. Building these accounts would be effected by a combination of ways such as the following:

(1) allowing for tax deduction for contributions to a SPIRA as with regular IRAs
(2) allowing unlimited contributions to a SPIRA after tax deduction amount met
(3) gov't direct stipends to SPIRAs to build these accounts
a. as well increasing earned income refunds if committed to a SPIRA
b. gov't matching SPIRA contributions by lower income earners
(4) directing some of the taxes of an individual to a SPIRA rather than to gov't
a. if there is an increase in capital gains tax deposit the differential to SPIRAs
b. estate taxes could be directed for deposits into these accounts
(5) allowing for tax free transfers to a SPIRA from established IRAs, 401Ks, etc.

Of course, a person would receive the benefit of tax free distributions of generated interest income for securing benefits. By establishing a SPIRA that affords these tax free distributions an individual commits to the regulation that the principal of a SPIRA remains untouched in the account permanently while upon death it must be passed on to beneficiaries. Last time we talked about what would happen as these accounts grow and the interest generated supercedes the cost of health insurance. The interest would then be divided into two parts. Half would be "reinvestment interest" that would be reinvested back to the principal following the regulations of the SPIRA. The other half would be designated as "distribution interest" available as tax free distributions for aquiring benefits such as:

(1) life insurance, negotiated as a group policy securing competitive rates
(2) disability insurance, again negotiated competitively
(3) when the distribution interest becomes substantial then
a. paying for education
b. helping with first time home purchase
c. helping to purchase a "green car" that achieves energy savings. this
car would be manufactured in the US so as to foster our economy and jobs.
japanese, german, etc. would qualify if made is US
d. help to purchase solar panels and other energy efficient equipment
(4) as people reach retirement their SS benefits would be supplemented so as
to afford a better, more realistic standard of life
(5) a one time special distribution at age 40 that we will discuss later

So, people would make commitments to regulated SPIRAs with the understanding that benefits, including supplementing their SS at retirement, would be paid for with tax free distributions. As well, they commit to leaving the principal permanently in the SPIRAs only to be passed on to beneficiaries of choice.

As well, as these accounts grow and provide medical coverage and more substantial retirement income there would be an agreement that owners of these accounts would be removed from Medicare and SS. The SS system would not be changed in any way. It would function as it does now with all present contributions being maintained as they are now. However, as the benefits of retirement distributions supercede substantially SS benefits, slowly Medicare and SS could be supplanted on a per case basis freeing up monies for the solvency of the SS system. This freeing up of monies would grow exponentially in future generations as all SPIRAs have to be passed along.

The main idea is to value all individuals as holders of assets. It's to not fall into the imbalances of the gov't or just a few individuals holding the assets of America. It's to entrust individuals to control their destinies in a more substantial, real way. We should learn from the lessons of the past economical collapse.

thanks, and all comments are welcome

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