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Implementation of the GRIP Method
General Information and Overview
The GRIP method of financing infrastructure projects combines the best proven ideas and those proposed which are pragmatic.
Implementing the GRIP method:
1. Congressional Legislative and Administrative Functions:
- Identify all pre-existing statutes in USC & CFR, relating to tax deductions for investments in infrastructure projects. These generally be found in Title 26 (Taxes) and Title 12 (Banks and Banking) of the USC.
- Congressional and Administrative Agreements - Expand and Amend existing tax code to provide incentives for corporations to repatriate off-shore money. As an example: the current corporate tax rate is 21%, with proposals to raise this to 25% - 28% Repatriated money used to invest in infrastructure projects to be 0% and interest earnings (tide to Treasury Bills 10 yr. bench mark). The available amount of funding is $4 trillion.
- Create a National Infrastructure Bank - For more information about the National Infrastructure Bank, what it is, and that there have been four (4) previous and very successful NIB in the history of the USA, please visit our N.I.B. page.
- uses existing U.S. tax laws and banking laws, which are not generally known by the average taxpayer. Create the concepts and structures for these types of infrastructure investments, but would be helpful to expand and enhance the potentials for success and to protect investors. However, investments in infrastructure projects at the state, county and community level
- proposes and promotes to presidential administration and Congress for investor-taxpayer deductions on their federal taxes of up to 20% for investments in local infrastructure projects, or others of their choosing.
- recommends many new tax law changes relating to investments to enhance existing projects, notably those relating to the migration to renewable energy sources and energy efficiency.
- uses what has proven by history to work going back to Alexander Hamilton's industrialization approach/vision (make things instead of growing things), to the FDR's "New Deal" programs such as WPA, TVA, CCC and related, to Eisenhower's interstate highway system, to the concepts presented in the "Green New Deal", which has many excellent components, which should be viewed through an economic lens, rather than just an environmental lens.
- gives priorities to projects of the greatest urgency, necessity for subsequent infrastructure projects, easiest & most rapid to complete, with the greatest potentials for success, and most rapid and secure ROI for investors.
The GRIP infrastructure plan, in conjunction with GRIP financing methods, categories infrastructure projects in two primary groups. Natural Resources Management and Transportation & Commerce. (See: Types of Projects)
There have been several proposals to upgrade and expand the U.S. infrastructure by politicians from both parties (See Menu: Federal Proposed Plans)
These proposals also include the "Green New Deal" (GND), which was proposed long before 2019 by Rep. Alexandria Ocasio-Cortez and and Sen. Warner, among others. The GND is NOT and an infrastructure plan, it has no priorities, milestones, timetables, costs/budget, marketing strategies or implementation plan.
"Green New Deal" is actually was a phrase coined by economist Thomas Friedman in 2008. GND, like the Democrat Plan and the Republican Plan all have points in them of profound merit. This is because infrastructure is bi-partisan, because it is non-partisan. Each of these plans is available at the bottom of the Legislation & Politics page for download and review.
The major differences from GRIP in each of these plans is the financing of them. GRIP offers a solution, which should be embraced by all, because it is a solution of benefit to all..
The first step in any infrastructure planning is the priorities. GRIP does this with the sequence of energy, water, & schools, and then transportation (roads, bridges, rail, airports, seaports, etc.)
GRIP starts with energy and notably the electric grid and it's cyber-security. Every infrastructure project is going to have energy as a consideration in it's foundation. This is where the FDR New Deal (TVA) and the Green New Deal intersect.
Without even considering the environmental costs of fossil fuels, the economic costs are going to prove to be the driving engine as renewable sources are becoming more adopted. Renewable energy such as solar, wind, and hydro-electric are simply going to be where the future leads.
In conjunction with electricity grid, is the expansion of broadband and communication access technologies. These are crucial now that the COVID-19 pandemic has compelled social isolation/limitations and much commerce and shopping online has substantially increased.
Renewable energy and broadband projects also give the investors a more immediate and yet stable form of ROI through consumption billing. As more and more cars and trucks are becoming electric motor generation, there will need to be 50,000 charging stations , which could be locally owned by the SPE/SPV, co-op, or community adding another future potential revenue stream..
Per hydro-electric technologies, when you consider the increasing frequency of devastating flooding, whether you attribute it to global-warming/climate-change or not, the fact remains flooding is growing more frequent, more devastating and more costly.
This is where the second level priority (water systems management) blends into the evolution of not only repairing critical infrastructure components, but re-visioning, rebuilding, re-engineering, and expanding them with more planning for future expansions. As dams/levies now need repaired, rebuilt or erected, this makes it possible to install small hydro-electric systems, which if nothing else could be used to help power the pumps in flood control.
Regarding the third level most commerce directly related, transportation infrastructure, an approach is needed far more expansive than merely patching potholes. This is road repairs/upgrades, new roads, bridges, high-speed rail, mass transit, seaports and airports.
No matter the type of infrastructure project, this means job creation. Job creation has it's impact on everything from economic development, to reducing health care premiums as more people will have healthcare, pay premiums, spread the risk for insurers, thus making it possible to reduce all health insurance premiums costs.
Going back to the U.S. first Sec. of the Treasury Hamilton's vision/plan, this mean as we make things, we need to train skilled workers how to make things and use the developing technologies. This then satisfied one of the goals of the Green New Deal advocates, who have education and income equity as one of their concerns. It also satisfies our other major infrastructure needs, school repairs and new schools.
Of course all of the above takes money, which has been the major barrier notwithstanding there exists bi-partisan support for addressing the U.S. infrastructure needs (repairs and growth), because this issue is bi-partisan, because it is non-partisan. This is where the GRIP approach applies.
Corporations ($4 trillion off-shore assets), institutional investors (retirement plans, etc.) hedge funds, venture capitalists and each and every taxpayer can participate using the GRIP method. Discussions of Public-Private Partnerships (P3s), Special Purpose Entities (SPE/SPV), 'bank within a bank' and other proven to be successful approaches and concepts are all incorporated in the GRIP method/plan.
The banks and others who will process the GRIP accounts will be carefully selected and certified, even above and beyond what exists as consumer/investor protections rules, statutes, and laws currently on the books, notably in the U.S. Code (emphasis: Titles: 12, 18, and 26). Although repealed during the Trump Administration, the principles and standards of 'Dodd-Frank' for the protection of consumer/investments needs to be introduced.
In addition to these consumer protections the GRIP certified lenders will have an approach to assess the feasibility of projects, the responsible management of projects (emphasis construction phase) and how infrastructure bonds/notes "GRIP" are easily transferable an may become their own form of currency; using standardized tool to measure the economic considerations, including economic multiplier effects.
With such safeguards and standards, it is then possible as GRIP account will be tied to T-bills and their rates, that investors (notably large investors and foreign investors) could exchange their current T-bill holdings for GRIP, where the risks are spread/reduced further. Therefore, the GRIP approach not only can be achieved without raising the National Debt, but potentially could be a vehicle which reduces the National Debt! This is certainly true as all existing laws protecting investors will remain in full force and effect at all material times.
One of the benefits to taxpayers, beyond the economic multiplier effects of infrastructure projects, is that they can participate and enjoy all of the tax deductions, and tax-exempt interest earnings of the larger investors.
Given the taxpayers have always paid for (invested in infrastructure), it should also be true that they can personally profit from it, beyond the use of the infrastructure. Deferring their tax withholding to the purchase of 13-week Treasury Bills, gives them a tax-exempt interest earnings savings. This is important since only 44% of taxpayers have $1,000 available for emergencies.
Simply what they will do is change their W-4 withholdings and invest this amount (usually about 20% of gross earnings) with investment companies, financial advisers, and banks who have special GRIP accounts, very similar to Christmas Savings Accounts and U.S. Savings Bonds. This means that a taxpayer making $50K/yr will only have taxable income of $40K. At tax time, they pay their taxes on $40K and at a rate of the average 14% (or $5,600). This payroll tax to infrastructure investment/savings diversion DOES NOT INCLUDE FICA, nor employers' contributions.
After taxes the taxpayer now has a savings account of $4,400, which can then be used to acquire GRIP, which is like a savings bond, which can upon maturity be cashed, traded, or used as collateral. Add to this that a GRIP with 2 year maturity has a yield of 2.5%/yr; thus here is at a minimum of $110 that is tax-exempt interest earnings!
Given their will be a limited number of SPE/SPV developing infrastructure projects, these deductions won't apply to every taxpayer every year due to these market forces. Likewise congress can limit the number of times a taxpayer may exercise this option in a 5 year period.
This same formula works for larger investors, notably those corporations who have $4 trillion of off-shore money. If they repatriate it now back into the USA, they pay 21% tax under the Trump 2017 tax plan. If they repatriate it into GRIP accounts, the pay $0 in taxes and yield tax-exempt interest earnings.
GRIP instruments "bonds/notes", come in increments of $1k, $5K, $10K, $20K, $50K, and $100K. They have maturity terms of 2 yr, 5yr, 10yr, 15 yr, 20 yr, and 30 yr, which of course have varied interest earning yields which are tied to the rates/terms of T-bills, or whatever rate is set by the SPE/SPV.
Therefore it is easy to see how the GRIP method can achieve infrastructure goals without raising federal income taxes and the National Debt. In fact, it has the significant potential of lowering taxes and and the National Debt.
