On October 14, 2019, Senator Bernie Sanders writes on berniesanders.com:
We will give workers an ownership stake in the companies they work for, break up corrupt corporate mergers and monopolies, and finally make corporations pay their fair share.
Details
In America today, corporate greed and corruption is destroying the social and economic fabric of our society, where a small group of ultra-wealthy CEOs are making the decisions that increasingly determine our economic, environmental and political future. For too long, these greedy corporate CEOs have rigged the tax code, killed market competition, and crushed the lives and power of workers and communities across America. Year after year we’ve seen wages slashed and thousands of workers laid off, all while the richest corporate CEOs pay themselves huge bonuses. They got away with it through a broken campaign finance system, where a few large campaign donations can get you the ear of any politician.
Now Donald Trump, the most corrupt president in history, has brought this corporate corruption straight into the Oval Office.
Enough is enough. With Bernie’s Corporate Accountability and Democracy Plan, we will give workers an ownership stake in the companies they work for, break up corrupt corporate mergers and monopolies, and finally make corporations pay their fair share. When Bernie is president, we’re going to put an end to the corporate greed ruining our country once and for all.
Give Workers an Ownership Stake in Corporate America
In America today, corporate greed is destroying the social and economic fabric of our society and rapidly moving our nation into an oligarchy, in which a small handful of multi-billionaires increasingly determine our economic, environmental, and political future.
Today, the richest 10 percent of Americans own an estimated 97 percent of all capital income – including capital gains, corporate dividends, and interest payments. Since the 2008 Wall Street crash, 49 percent of all new income generated in America has gone to the top 1 percent. The three wealthiest people in our country now own more wealth than the bottom 160 million Americans. And the richest family in America – the Walton family, which inherited about half of Walmart’s stock – is worth $200 billion and owns more wealth than the bottom 42 percent of the American people.
While the corporate profits that presently go to a small number of ultra-wealthy families are at or near an all-time high, wages as a percentage of our economy are near an all-time low.
Instead of using their massive profits to benefit workers and our society as a whole, corporate America has pumped over $1 trillion into stock buybacks to reward already-wealthy shareholders and executives since the Trump tax plan was signed into law. Meanwhile, as the very rich become ever richer, the average hourly wage of the American worker has gone up by just 1 percent from where it was 46 years ago, after adjusting for inflation. Since 1982, the Walton family has experienced a more than 10,000 percent increase in its wealth, while the median family in America has less wealth today than it did 37 years ago.
The reality is that today the executives and biggest shareholders of most large, profitable corporations could not give a damn about the working class or the communities in which our corporations operate. Those who control these behemoth corporations have only one allegiance: to the short-term bottom line. What happens to their employees, what happens to the environment, and what happens to the community in which their firms function matters very little. These are not really American companies – they are companies currently located in America at most, and increasingly aren’t even incorporated here but instead merely selling here. Tomorrow, if the economics made sense to them, they could be located in China – and already they are incorporating in offshore tax havens like Bermuda and the Cayman Islands to avoid paying U.S. taxes.
This type of greed is not an economic model we should be embracing. We can do better; we must do better.
The establishment tells us there is no alternative to unfettered capitalism, that this is how the system and globalization work and there’s no turning back. They are dead wrong.
The truth is that we can and we must develop new economic models to create jobs and increase wages and productivity across America. Instead of giving huge tax breaks to large corporations that ship our jobs to China and other low-wage countries, we need to give workers an ownership stake in the companies they work for, a say in the decision-making process that impacts their lives, and a fair share of the profits that their work makes possible in the first place.
If workers had ownership stakes in their companies and an equal say on corporate boards:
- Corporations would be far less likely to shut down profitable factories in the United States and move abroad;
- CEOs would not be making over 300 times as much as their average workers; and
- Companies would be far less likely to pollute the communities in which workers live.
The time has come to substantially expand employee ownership in America. Study after study has shown that employee ownership increases employment, increases productivity, increases sales, and increases wages in the United States. This is in large part because employee-owned businesses boost employee morale, dedication, creativity and productivity, because workers share in profits and have more control over their own work lives.
Employees in worker-owned companies are not simply cogs in a machine owned by someone else. They play a central role in determining what the company does and how it is run.
By giving workers seats on corporate boards and a stake in their companies, we can create an economy that works for all of us, not just the 1 percent. Not only are we going to make it much easier to join a union and much harder to misclassify workers through the Workplace Democracy Act and increase the minimum wage to $15 an hour. With this proposal we are going to fundamentally shift the wealth of the economy back into the hands of those who create it.
As president, Bernie will:
- Share Corporate Wealth with Workers. Under this plan, corporations with at least $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies will be required to provide at least 2 percent of stock to their workers every year until the company is at least 20 percent owned by employees. This will be done through the issuing of new shares and the establishment of Democratic Employee Ownership Funds.
- These funds will be under the control of a Board of Trustees directly elected by the workforce. Employees will be guaranteed payments from the funds equivalent to their shares of ownership as equal partners in the funds.
- Workers will be guaranteed the right to vote the shares given to them through this plan. The funds will enjoy the same voting rights as any other institutional shareholder and their shares will not be permitted to be transferred or sold. Instead, they will be held permanently in trust for the workforce. Dividend payments will be made from the Funds directly to employees.
- According to the most recent statistics, 56 million workers in over 22,000 companies in America would benefit under this plan.An estimate based on data from over 1,000 companies shows that directing 20 percent of dividends to workers could provide an average dividend payment of over $5,000 per worker every year.
- Democratize Corporate Boards. Under this plan, 45 percent of the board of directors in any large corporation with at least $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies will be directly elected by the firm’s workers – similar to what happens under “employee co-determination” in Germany, which long has had one of the most productive and successful economies in the world.
- When workers have a seat at the table, when they are involved in the decision-making that impacts their jobs and their work at the desk or on the shopfloor the results are clear – absenteeism goes down, productivity goes up, and people stay at their jobs for longer periods of time.
- When workers are respected on the job as full human beings who help make decisions for a profitable company, rather than being mere cogs in the machine, morale goes up. And workers who sit on corporate boards will not vote to pay themselves poverty wages or ship their own jobs to low-wage countries to further enrich overpaid CEOs and a few wealthy stockholders.
- Require Federal “Stakeholder” Charters for Large Companies. Under this plan, U.S. corporations with more than $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies must obtain a federal charter from a newly established Bureau of Corporate Governance at the Department of Commerce. This new federal charter will require corporate boards to consider the interests of all of the stakeholders in a company – including workers, customers, shareholders, and the communities in which the corporation operates.
- In October of 1981, the Business Roundtable, a group comprising the CEOs of most of the largest corporations in the country, issued a “Statement on Corporate Responsibility.” As journalist Ken Jacobsen documents, “the Business Roundtable, which groups the CEOs of the largest US firms, recognizes six constituencies – customers, employees, communities, society at large, suppliers, and shareholders – as forming the ‘web of complex, often competing relationships’ within which corporations operate. It accepts the idea that ‘shareholders have a special relationship to the corporation’ but doesn’t allow their interests to trump all others.” Here is an excerpt from the Business Roundtable statement in 1981:
- “Balancing the shareholder’s expectations of maximum return against other priorities is one of the fundamental problems confronting corporate management. The shareholders must receive a good return but the legitimate concerns of other constituencies also must have appropriate attention. Striking the appropriate balance, some leading managers have come to believe that the primary role of corporations is to help meet society’s legitimate needs for goods and services and to earn a reasonable return for the shareholders in the process. They are aware that this must be done in a socially acceptable manner. They believe that by giving enlightened consideration to balancing the legitimate claims of all its constituents, a corporation will best serve the interest of the shareholders.”
- This statement was rewritten in 1997, when the Business Roundtable adopted a statement that put shareholder returns ahead of everyone else. This year, the Business roundtable released empty words recognizing the error in admitting corporations put profits and shareholder returns above everything else. Empty words are not enough. This plan will ensure that corporations conduct business in a fair way – a way that treats workers and the communities in which businesses operate with respect. In order to conduct business, a federal charter that ends the practice of putting shareholder returns above everything and requires corporations to conduct business in a way that takes into account the interests of all stakeholders must be obtained.
- In October of 1981, the Business Roundtable, a group comprising the CEOs of most of the largest corporations in the country, issued a “Statement on Corporate Responsibility.” As journalist Ken Jacobsen documents, “the Business Roundtable, which groups the CEOs of the largest US firms, recognizes six constituencies – customers, employees, communities, society at large, suppliers, and shareholders – as forming the ‘web of complex, often competing relationships’ within which corporations operate. It accepts the idea that ‘shareholders have a special relationship to the corporation’ but doesn’t allow their interests to trump all others.” Here is an excerpt from the Business Roundtable statement in 1981:
- Ban Stock Buybacks. Under this plan, large-scale stock buybacks will be treated like stock manipulation, just as they were before 1982. This will be done by repealing the Securities and Exchange Commission’s misguided Rule 10b-18. Since Trump signed his tax plan into law, corporations have announced over $1 trillion in stock repurchases which provide absolutely no benefit to the job-creating productive economy. These buybacks are nothing more than stock price manipulation and must be treated as such.
- Require Firms that “Outsource” Production to Low Wage Countries or Automate to Convey Shares to “Laid Off” Employees. Under this plan, the owners of firms that dispose of American labor to take advantage of robots or cheap labor overseas will be required to share the gains that they make through such practices with those whom these practices harm. Champions of “globalization” and “automation” often claim “everybody wins” through these practices, or that at least the gains exceed the losses. If those claims are true, then the owners of those firms can more than afford to share their gains with the workers they displace. It is time to enable the owners of outsourcing and automating firms literally to “put their money” – that is, their ownership shares – “where their mouths are.”
- Establish a U.S. Employee Ownership Bank. Under this plan, a $500 million U.S. Employee Ownership Bank will be created to provide low-interest loans, loan guarantees, and technical assistance to workers who want to purchase their own businesses through the establishment of Employee Stock Ownership Plans (ESOPs) or Eligible Worker-Owned Cooperatives. In order to be eligible for assistance under this plan, the ESOPs or worker coops would need to be at least 51 percent owned by workers.
- Guarantee a Right of First Refusal. Under this plan, workers will be given the right to buy a company when it goes up for sale, is closing, or if a factory is moving overseas and will receive financial assistance from the U.S. Employee Ownership Bank to make that possible.
- Create Worker Ownership Centers. Under this plan, worker ownership centers, modeled after successful programs in Ohio and Vermont, will be established in every state and regional center in the country. These centers will educate retiring business owners and workers about th e benefits of employee ownership. It has been estimated that with education and financial assistance from the federal government between 150,000 to 300,000 retiring owners of small to mid-sized businesses could sell their companies to their workers.
- Diversify Corporations. Under this plan, we will develop rules to diversify corporate boards by ensuring a significant portion of every board be comprised of people from historically underrepresented groups (e.g. marginalized by gender, race, ethnicity, religion, disability or sexuality). And we will require every corporation to complete an annual report that gives the compensation, gender, and racial composition of board and employees.
Shareholder Democracy
Today in the United States, a tiny group of asset managers control most of the votes in the economy. They control shares in corporations, which control our workplaces, our pay, our security in retirement, and our environment. The three biggest asset manager firms – BlackRock, State Street and Vanguard – if combined would be the largest shareholder in 438 out of the S&P 500 largest corporations. In each firm, there are just 10 to 20 people working in corporate governance departments, who cast the votes on all corporate shares that they control. Under 50 people control the votes in the American economy.
These asset managers oppose labor unions and fair wages. They support escalating pay for billionaire CEOs. They oppose action to end discrimination at work and stop the gender pay gap. They oppose meaningful action to combat climate damage. They oppose an end to corporate political spending, and billionaires buying elections, under the disastrous Citizens United decision.
The voting power asset managers control comes from other people’s money. It doesn’t belong to them, it belongs to us. It comes from Americans saving for retirement, in group and single-employer pension plans, in 401(k)s, in life insurance, and in mutual funds. But the share of workers’ capital in the stock market has been shrinking since the 1980s. Inequality has skyrocketed as workplace democracy and collective bargaining have been attacked. This has meant a smaller slice of the pie for American labor, and a growing slice for Wall Street. We need to rebalance the share of income and wealth in favor of labor. We need to give America a pay raise. We need to expand democracy in the workplace and the economy.
As president, Bernie will:
- End the monopoly of shareholders on voting rights in the American economy. Every employee should be guaranteed the right to vote at work, and have a voice in setting their pay, regardless of the kind or size of company or firm they work for.
- Ban asset managers voting on other people’s money, unless they are following instructions, just like we banned broker-dealer voting in the Dodd-Frank Act.
- Guarantee the right of every saver to elect representatives who set voting policy in corporations, in multi-employer pensions, single-employer pensions, in 401(k) funds, and every other form.
- Organize sectoral pension plans, with more bargaining power, that can ditch Wall Street asset managers and take voting in-house, as we revitalize sectoral collective bargaining.
Break Up Monopolies and Make Markets Competitive
Today, we are seeing a level of corporate concentration not seen since the Gilded Age. Over the past 40 years, nearly every single industry in the country has become more concentrated. Monopolies and oligopolies rule over every aspect of American life, from the food we eat, the beer we drink, the airlines we fly, even to the eyeglasses we wear. Without competition, these corporations are able to gouge consumers, extort suppliers, and stifle innovation.
At the turn of the 20th century, Congress saw the need to restrict the monopolistic and unfair practices of massive trusts and corporations. The Sherman Antitrust Act, the Clayton Antitrust Act, and the Federal Trade Commission Act gave wide latitude for the federal government to enforce anti-monopoly policy, recognizing the destructive nature of unchecked corporate power. However, over the past several decades, the federal judiciary and antitrust agencies have been hijacked by right-wing, corporate-aligned ideologues who have made the failed Supreme Court nominee Robert Bork’s idea of “consumer welfare” the guiding principle for antitrust law. In implementing Bork’s far right ideology, the Supreme Court has weakened laws put in place to protect people from consolidation and monopolization and has left the economy to be run by a few large corporations.
This has resulted in a new era of monopoly power. Concentrated markets have led to lower wages and less innovation. We are seeing large corporations stamp out fair competition, excluding smaller rivals and raising prices for consumers.
These large corporations are also able to create laws that benefit them, as we’ve seen with companies like Amazon fight to pay no taxes in the communities where they operate, while at the same time paying nothing in federal taxes. Consolidation of large hospital systems has led to higher prices and worse service. In agribusiness, Bayer controls a seed monopoly that crushes small farmers, and Tyson Foods locks powerless chicken farmers into exploitative contracts with no way out.
We are seeing mega-mergers like the one between Mobile and Sprint, which represents a gross concentration of power that runs counter to the public good. Americans deserve affordable wireless access. This merger will not only lead to fewer options and higher prices for consumers, but it could lead to 30,000 jobs lost and reduced wages for thousands more. Disney’s acquisition of 21st Century Fox has created a conglomerate that controls media in sports, in movie theaters, and on television.
Bernie believes we need to rediscover the American tradition of controlling corporate power and promoting fair competition through antitrust. He will halt anticompetitive mergers, break up existing monopolies and oligopolies, and appoint federal regulators ready to take action on behalf of workers and consumers – not massive corporations. He will take antitrust enforcement authority out of the control of the captured judiciary and create markets that work for all, not just the wealthy and well-connected.
Review All Mergers that Have Taken Place During the Trump Administration
The Trump administration has been plagued by corruption and its approvals of mergers and acquisitions have been no different. We have seen the administration approve mergers after CEOs and investors spend hundreds of thousands of dollars at Trump hotels, despite knowing that it will result in thousands of workers losing their jobs. This is unacceptable and under Bernie’s administration, these mergers will be reviewed and, when necessary, undone.
Furthermore, over the past 40 years we have seen a huge rise in the number of mergers and acquisitions approved. We can see this has led to lower wages, stagnant growth and innovation, and left our economy unstable. The Federal Trade Commission must conduct a comprehensive study to investigate the impacts these mergers have had on competition, our economy, and workers, and establish new guidelines that restrict mergers and acquisitions.
As president, Bernie will:
- Have the FTC conduct a thorough review of all mergers and acquisitions since Trump took office and undo those that have created highly concentrated markets, demonstrably caused harm to workers, raised prices, or reduced competition.
- Have the FTC conduct a review of all mergers and acquisitions from the past 40 years to set up new guidelines for approval that will have a special focus on economic security, job security, and competition.
- This report will also take a special look at behavioral data that companies collect and the relationship that information has with price discrimination.
- In a Bernie Sanders administration, the FTC will break up corporations that have accumulated dominant market share and are able to wield their market power in anti-competitive ways.
Reinvigorate the Federal Trade Commission
The Federal Trade Commission has failed its mission. Antitrust enforcement has fallen to almost none in recent years. Under the Trump administration, the FTC has shown deference to the largest, most powerful corporations instead of fighting for workers and consumers. When the FTC settled with Facebook for $5 billion over egregious privacy violations, Facebook’s stock rose, as investors knew it was a slap on the wrist. Similarly, the FTC’s recent settlement with YouTube over child privacy violations amounts to just three months of ad revenue. Even as it has handled monopolists with kid gloves, it has attacked the organizing efforts of workers and professionals, including in the gig economy.
The FTC has lost its credibility as a regulatory agency. A Sanders FTC will be reinvigorated. Bernie will appoint commissioners who serve the public interest and will end the revolving door of FTC commissioners and staff leaving to work for the very same corporations they were previously in charge of regulating.
All too often, decisions about mergers and acquisitions are determined by judges, not expert regulators, and have to go through a complicated legal system to be overturned. This is not how other nations approach mergers and acquisitions. The Federal Trade Commission must be given the authority to halt mergers and impose fines on companies that violate FTC guidelines without long, costly, and ideological court battles. Judges do not have the expertise to determine the economic and labor impacts of mergers and the FTC, whose staff has the training needed to make these decisions, must have the authority to approve or deny mergers.
As president, Bernie will:
- Expand the authority of the FTC to allow it to impose administrative fines on companies and halt mergers without challenging them in federal court.
- Expand the authority of the FTC to review the non-coordinated effects of mergers by different entities in the same market or closely related markets.
- Produce an annual report on the impacts of mergers across markets or closely related markets.
- Explicitly grant the FTC full rulemaking authority, under the Sherman, Clayton, and Federal Trade Commission Acts, to establish rules for a fair, competitive marketplace.
- Repeal the additional rulemaking burdens placed on the FTC under the Magnuson-Moss Act.
- Repeal the section of the Magnuson-Moss Act that states the FTC shall be funded through appropriations, and clarify that the FTC will be granted reasonable fees needed to carry out its duties.
- Ban the revolving door of personnel between industry and regulators.
Institute New Merger Guidelines
Guidelines for approving mergers reflect pro-corporate ideology and should instead account for the adverse effects mergers often have on workers, consumers, and our economy as a whole. While mergers have historically been great for large corporations, they have hurt workers by closing down plants and reducing wages, and have hurt our economy and our democracy by consolidating market power to a few actors who control entire markets and industries.
The Federal Trade Commission will have the authority to approve or deny mergers, and will focus on people, not profits.
As president, Bernie will:
- Institute bright-line merger guidelines that set caps for vertical mergers, horizontal mergers, and total market share.
- Instruct the FTC to produce a report to identify common practices that result in anti-worker behavior, threaten competition, or engage in price discrimination (this includes using behavioral data to get customers to purchase goods and/or services that they would not normally purchase at a price that is inflated).
- No merger will be approved for companies that engage in the behaviors identified by the FTC as harming workers, competition, or fair pricing.
- End institutional deference to the “consumer welfare standard.”
- Place a moratorium on mergers and vertical integration of large agribusiness corporations.
Ensure Fair Contracts
Corporations and employers have an unprecedented amount of power over workers, consumers, and suppliers. While corporations will argue that a signed contract is freely agreed to, in reality there is often no choice but to agree to the terms set by these corporate overlords. Corporations use contracts to rob us of fundamental rights, such as the right to leave for a better job and hold corporate wrongdoers accountable in court. An estimated one in five workers is bound by a non-compete agreement, ostensibly to protect trade secrets and prevent poaching of high-level executives. Today, maids, hair stylists, and fast food workers are subject to these clauses. An estimated 60 percent of major franchises have non-compete clauses in their contracts, which drive down wages and mobility.
Mandatory arbitration clauses prevent workers and consumers from having their day in court. In 1992, roughly 2 percent of the workforce were bound by mandatory arbitration. By 2000, that number had risen to 25 percent. Now, it’s 55 percent. Nearly two-thirds of workers making less than $13 an hour are subject by mandatory arbitration clauses, including majorities of women, Hispanic, and African-American workers. For consumers, mandatory arbitration takes away the option for class-action lawsuits and helps corporations avoid paying restitution for misconduct and fraud. The Supreme Court has empowered corporations to use arbitration to deny us our day in court in front of a jury of our peers.
Even understanding and signing a contract is no defense when the contract includes a unilateral modification clause, which stipulates the terms can be changed at any time, for any reason. Consumers, customers, and workers are subject to the governance of hundreds of pages of fine-print developed by highly-paid lawyers for the purpose of shielding corporations and cementing their market power. The Federal Trade Commission will use its authority to prohibit unfair methods of competition and ban practices that tilt the playing field.
As president, Bernie will:
- Ban mandatory arbitration clauses.
- Ban non-compete clauses.
- Ban unilateral modification clauses.
- Ban clauses that deny farmers and consumers the right to repair the equipment and technology they purchase.
- Instruct the FTC to develop guidelines for anti-competitive exclusivity agreements and ban practices that lock suppliers into unfair arrangements.
Make Large Corporations Pay Their Fair Share of Taxes
For more than 40 years, Wall Street banks, large profitable corporations, and the billionaire class have rigged the tax code to redistribute wealth and income to the richest and most powerful people in this country.
The American people have had enough. They are sick and tired of profitable corporations like Amazon, General Motors, Eli Lilly, Chevron, Halliburton, Netflix and Delta making billions in profits, but paying nothing in federal income taxes.
Working together, a Bernie Sanders administration will end a rigged tax code and political system that allows large corporations to shift their profits to the Cayman Islands to avoid paying American taxes and to ship jobs to China and other low-wage countries to avoid paying American wages.
If we are serious about reforming the tax code and rebuilding the middle class, we have got to demand that the most profitable corporations pay their fair share in taxes.
End Corporate Tax Avoidance
One of the biggest outrages in the tax code today is that many of the largest corporations in the world are able to make billions in profits and pay nothing in U.S. corporate income taxes. In fact, many of them receive millions in tax refunds.
Between 2017 and 2018 Amazon, owned by the wealthiest person in the world, made $16.2 billion in profits. But not only did Amazon pay nothing in federal income taxes over those two years, it received a tax refund of $270 million from the IRS. And Amazon was not alone.
As a result of the Trump tax giveaway to the rich, the number of large, profitable corporations paying no federal income taxes doubled last year. In fact, in 2018, 60 profitable Fortune 500 companies not only paid zero in federal income taxes, they received a net corporate tax rebate of $4.3 billion.
Corporate tax avoidance did not begin with the Trump tax cuts, but it certainly made a bad situation far worse. At a time of record-breaking profits, large corporations actually paid $92 billion less in taxes in 2018 than the year before – a drop of 30 percent.
In 1952, corporate income taxes accounted for 32 percent of all federal revenue. But last year, just 6 percent of all federal revenue came from corporate income taxes, a five-fold drop over that time period.
According to the Office and Management and Budget, corporate tax revenues in 2018 were just 1 percent of GDP, tying the lowest points since the 1930s and less than half the average over the past 85 years.
The reality is that we now have a tax code that has legalized tax dodging for large corporations and includes a myriad of tax breaks, deductions, credits, and tax avoidance loopholes that Bernie’s plan will end.
One of the major reasons for this tax avoidance is that corporations have been setting up thousands of shell corporations in the Cayman Islands, Bermuda, and other offshore tax havens to avoid paying taxes in the U.S.
This situation has become so absurd that one five-story office building in the Cayman Islands is the “home” to more than 19,000 corporations.
The good news is that the overwhelming majority of the American people are demanding that corporations pay their fair share of taxes. According to the latest Gallup poll, 69 percent of the American people believe that corporations are paying too little in taxes.
And a survey by the Pew Research Center found that the fact that corporations do not pay their fair share is the single issue about the tax code that bothers them the most.
The time has come to tell corporate CEOs and their wealthy stockholders: You cannot have it all. You can’t get huge tax breaks while children in this country go hungry and veterans sleep out on the streets. You can’t continue getting tax breaks by shipping American jobs to China. You can’t hide your profits in the Cayman Islands and other tax havens while there are massive unmet needs in every corner of this nation. Your greed has got to end. You cannot take advantage of all the benefits of America if you refuse to accept your responsibilities as Americans.
The Plan
As president, Bernie will raise up to $3 trillion over 10 years by repealing all of the disastrous corporate tax breaks enacted under Trump, closing corporate tax loopholes, and demanding that large corporations pay their fair share of taxes.
Of this revenue, $2 trillion will be used to help fund Bernie’s Green New Deal to combat climate change, rebuild our crumbling infrastructure to make it more climate resilient, and create millions of good-paying union jobs in the process. The rest will be used to help create an economy that works for all of us, not just the top 1 percent.
Under this plan, Bernie will:
- Restore the corporate tax rate to 35 percent from 21 percent.
- Ensure that corporations pay 35 percent by eliminating virtually all corporate tax breaks and loopholes.
- This includes transitioning to economic depreciation for all investments, which partially offsets the tax advantage of investing in automation over labor.
- This includes further limiting the interest deduction to 20 percent of adjusted taxable income and tightening related rules.
- Eliminate the use of offshore tax havens by:
- Applying the same tax rate on offshore and domestic income and applying a per-country limit on the foreign tax credit.
- Eliminating inversions by limiting interest deductions to 105 percent of a corporation’s share of net interest expense over worldwide earnings, treating companies managed and controlled in the US as domestic corporations, and tightening the definition of inverted corporations to ones owned by 50 percent of the same shareholders after a merger.
- Tightening other rules including limiting treaty shopping; reforming the base erosion and anti-abuse tax rate by lowering its threshold for application, raising its rate to 17.5 percent, and excluding deductible payments that give rise to includible US income; eliminating the tax break for foreign derived intangible income (FDII), and denying foreign tax credits for excise tax payments by oil, extractive, gambling, and other companies.
- Requiring corporations with revenues over $25 million to publicly disclose significant portions of their tax returns and country by country financial information including earnings, financial accounts, and tax payments in other countries.
- Eliminating the 20 percent deduction on pass-through business income and requiring large pass-through businesses to be subject to corporate taxes.
If this plan had been in effect last year, instead of paying nothing in federal income taxes:
- Amazon would have paid up to $3.8 billion in taxes.
- Delta would have paid up to $1.8 billion in taxes.
- Chevron would have paid up to $1.6 billion in taxes.
- GM would have paid up to $1.5 billion in taxes.
https://www.vox.com/2019/10/14/20912221/bernie-sanders-corporate-accountability-ftc-merger-tax
https://www.forbes.com/sites/rhockett/2019/10/14/bernie-sanders-on-corporate-democracy/#605145c57783
https://www.politico.com/news/2019/10/14/bernie-sanders-2020-election-workers-046660
Bernie Sanders Comments:
For more than 40 years, the largest and most profitable corporations in America have rigged the tax code and our economy to redistribute wealth and income to the richest and most powerful people in this country. The American people are saying enough is enough. They are sick and tired of companies like Amazon, General Motors and Chevron making billions in profits, but paying nothing in federal income taxes. Under this plan, we will demand that profitable corporations pay their fair share of taxes. We will give workers an ownership stake in the companies they work for. And we will start breaking up some of the largest and most powerful companies in America to lower prices for consumers, help small business and make markets competitive.
Gary Reber Comments:
I give Bernie Sanders a cheering and applauding standing ovation for bringing to the forefront the issue of capital asset ownership in the choice before all Americans as to the future we want for ourselves, our children, our grandchildren and great grandchildren, and generations beyond.
Economic democracy, or what could be termed economic personalism, is founded on the principal that economic power has to be universally distributed amongst individual citizens and never allowed to concentrate among a few. It is a value system based on the importance and dignity of every human person. America was founded on the principle that the basic responsibility of government is to maximize the welfare of its citizens.
The issue of who should own American hawkers back to 1976, in which at one point the discussion led to The Joint Economic Committee of Congress endorsing a policy to broaden capital ownership as an economic goal for America. The 1976 Joint Economic Report stated: “To provide a realistic opportunity for more U.S. citizens to become owners of capital, and to provide an expanded source of equity financing for corporations, it should be made national policy to pursue the goal of broadened capital ownership. Congress also should request from the Administration a quadrennial report on the ownership of wealth in this country, which would assist in evaluating how successfully the base of wealth was being broadened over time.”
Unfortunately the Congress and no past or present President or candidate for the presidency (until now with Bernie Sanders) have never paid any attention to this policy, and the goal has subsequently been unacknowledged and unheeded by our plutocratic political leaders.
Instead, the American people have been promised that if the wealthy ownership class could gain even more earnings through low taxes and deregulation, the savings would be reinvested to grow the economy and create more and better jobs and higher wages. The focus has always been on job creation and wage growth, while the rich get richer by invisibly accumulating more capital asset ownership.Of course, there is always some truth to the idea that new jobs will be created through reinvestment, but jobs are eliminated as well, as the reinvestment is increasingly directed to the formation of new, highly-efficient non-human technological means of production, requiring far less workers and/or to extensions to other countries with lower labor costs and no or few regulations. Americans should be smarter and realize that this is an underhanded scheme for the already wealthy and their heirs to OWN America and further concentrate and monopolize ownership of ALL productive capital, present and future. Such “trickle-down” thinking does not work. As a result of such unworkable policies, fewer and fewer people remain good “customers with money” to buy what the economy is capable of producing. And even then, as consumers, the vast majority of Americans have gone into consumption debt in order to provide for themselves and their families. Americans increasingly do not feel secure and are being challenged as to how to survive, faced with mounting over-extended consumer credit as well as less and less job security to earn sufficient income to pay off their debt. Unnecessarily, millions of Americans are faced with losing their savings and homes, and their jobs –– and their dreams for a better life –– with no way to earn through owning the wealth-creating, income-producing productive capital now formed and that which will be formed in the future.
As history has confirmed, better earnings and better job prospects did not and will not trickle down by lowering taxes on the wealthy and the corporations they own or deregulating the rules of responsible production. Responsibly growing the economy simultaneously with creating new capital owners, and thus “customers with money,” is the ONLY way to achieve inclusive prosperity and economic justice.
While the Sanders agenda is focused on giving workers an ownership stake in corporate America, the vast majority of Americans do not work in the corporate America Sanders has targeted, or even work for a for-profit, State-chartered corporation, and thus will be left out of the Sanders ownership-broadening solutions.
Let’s address each proposed solution:
• Share Corporate Wealth with Workers. Under this plan, corporations with at least $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies will be required to provide at least 2 percent of stock to their workers every year until the company is at least 20 percent owned by employees. This will be done through the issuing of new shares and the establishment of Democratic Employee Ownership Funds.
I think a more comprehensive approach would be to eliminate all tax loopholes to eliminate corporate and personal tax avoidance and business subsidies, and raise the corporate income tax to at least 90 percent, but allow corporations to fully eliminate their corporate tax burden by paying out 100 percent of their earnings to their owners, who then would be subject to a personal income tax. This would effectively eliminate retained earnings and corporate debt financing, neither of which creates any new owners, and instead would incentivize corporations to issue and sell new stock, not only to those employed by the corporation but to EVERY child, woman and man who would be equally eligible to purchase the new shares with the earnings of the new investments in the corporation’s growth.
The income from the capital investment would be isolated until it pays for itself, and then begins to produce a stream of dividend income to the new capital owners. This can only be accomplished by enabling every person to have access to capital ownership and purchase the capital, and pay for it out of what the capital produces. This is the smart means to acquire capital, which wealthy people fully understand.
The funds to purchase the new stock issues would come from an equal annual allotment of capital credit provided to EVERY child, woman and man issued by commercial banks authorized to create new money backed by the Federal Reserve, which also should be broadly owned by all of the citizens in each of the 12 Federal Reserve Bank regions.
We need to define “economic justice” in a way that provides universal access to future capital ownership opportunities for EVERY child, woman, and man, without redistribution. That is, reform the tax and monetary system to enable every child, woman, and man to purchase capital using “pure” capital credit collateralized with insurance, and pay for it out of the future earnings of the capital itself.
To solve the security issue, that is, the risk that a new capital investment might not pay for itself out of its future earnings can be absorbed by capital credit insurance or commercial risk insurance. Thus, in order to achieve a national economic democracy, we need a way to handle risk management in finance by broadly insuring the risks. Such capital credit insurance, facilitated with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration mortgage insurance concept), would substitute for the security demanded by lenders to cover the risk of non-payment, thus enabling the poor and others with no or few assets (the 99 percent) to overcome the collateralization barrier that excludes the non-halves from access to and the means to finance their ownership of wealth-creating, income-generating productive capital.
My colleagues and I at the Center for Economic and Social Justice (www.cesj.org) call this solution Capital Homesteading. The process works as follows:
1. Each year (annually, bi-annually or quarterly) the government estimates how much productive capital will be added to the economy in the coming period, both in the private and public sectors. Dividing that number by the current number of U.S. citizens determines that period’s per-citizen allotment of interest-free capital credit.
For example, the total annual U.S. capital formation increment for 2018, which according to the Federal Reserve Bank of St. Louis amounts to $3.955 trillion. When that number is divided by the total 2018 U.S. population of 328.9 million citizens, the result is an annual per-citizen capital credit allocation of $12,023. (For purposes of this illustration, however, we’ll use an annual capital credit allotment of $7,000, calculated for a slow growth economy.)
2. An enterprise that needs to finance new capital assets, such as plant, equipment, structures, patents, information technology systems, etc., decides to finance that new productive capital by selling newly issued Capital Homesteading shares to citizens, at their current market price. The enterprise can escape paying corporate income taxes on all full-dividend payout, voting shares. Future dividends not used to repay a Capital Homestead loan would be taxable at the personal level.
In this example a family of four goes to their local bank to set up four individual, tax-sheltered Capital Homestead Accounts (CHAs). With the parents making decisions on behalf of their minor children, they will get investment advice from the bank and use their annual capital credit allotments to purchase qualified shares of the enterprise. (A portion of their capital credit allotment will be used to cover the one-time cost of capital loan insurance and bank service charges.)
NOTE: The vast majority of Americans is not accustomed to investing or well educated in this regard and must rely on professional investment advisors who advise clients on which stocks to purchase, in this case qualified new issued stocks. Legislation must ensure stiff penalties are incurred on financial advisors who seek to gain big fees and commissions from corporations selling new issues of their stock, and eliminate such practices. Investment advisors must be required to offer advice or recommendations that put the interests and well being of investors first. Such legislation would prioritize the financial needs of clients, disclose conflicts of interests, and eliminate conflicts that taint the advice American investors receive from financial advisors. The for-profit investment broker-dealers sector should be replaced with flat fee financial advisors, in which their fee is built into the CHA accounts as a portion of capital credit allotments.
3. Under the Capital Homestead law, the enterprise must pay annually to each citizen’s Capital Homestead account all the profits earned on the shares to be purchased.
The initial stream of corporate profits will be used to pay off the scheduled CHA loans. When the citizens receive dividend incomes above their periodic principal payments on their CHA loans, they will be subject to personal income taxes on any additional dividends. Capital Homestead shares are tax-exempt as long as they remain in the tax-sheltered Capital Homestead account.
4. The family’s adults present “bills of exchange” for the bank’s approval and acceptance, in order to obtain their chosen shares for each CHA loan for that period. (Before the loan is made, the lender, risk insurance company and other entities will first determine the “feasibility” of each particular loan. (“Feasibility” means that the enterprise’s new capital is expected to generate enough profits to pay for itself.) Such a feasibility analysis will judge the soundness of the enterprise that needs to purchase the new capital assets, including the quality of its management and workforce, its current and future markets, etc.)
The bank in turn issues a promissory note for each Capital Homestead loan and sets up a checking account for each member of the family. (In a process called “discounting” the bank will deduct from the total loan principal a one-time premium for capital credit risk insurance and service fees for the bank and other advisors.)
5. The bank guarantees to a Capital Credit Insurer to add a risk premium to the principal needed to purchase the shares. (This premium and the bank service charges will be paid out of the CHA loan discount.)
6. The Capital Credit Insurer insures each of the CHA loans.
7. The local bank bundles (or transfers to a Capital Credit Syndicator) all insured CHA loans.
8. Either directly or through the Capital Credit Syndicator, the bank takes to the discount window of its regional Federal Reserve Bank the bundled CHA loans for “rediscounting.” (This is where the Federal Reserve deducts from the total loan an amount to cover its own actual servicing costs for issuing new money.)
9. The regional Federal Reserve issues to the local bank a promissory note and creates new asset-backed money or “demand deposits” (a checking account) for the local bank.
10. The local bank then transfers to the citizen’s Capital Homestead Account the new money to be used to purchase the newly issued shares of the enterprise.
11. The Capital Homesteader writes out a check from his or her Capital Homestead Account to purchase the new growth shares.
12. The enterprise uses the cash to purchase new capital assets and working capital.
13. The enterprise acquires and puts into operation the new capital (technology, structures, land, etc.) to increase its production of marketable goods and services.
14. The enterprise, as it generates profits, makes scheduled payments of dividends to the citizen’s Capital Homestead Account. These dividends are tax-deductible to the enterprise.
15. The Capital Homestead Account makes periodic installment payments of principal on the citizen’s CHA loan. Once principal payments on that loan are made, all additional future dividends become a new source of consumption income for the citizen.
16. The Capital Homestead money creation cycle ends with the original money being cancelled, in order to avoid the inflationary effects of money remaining in the economy not backed by capital assets or marketable goods and services.
• Democratize Corporate Boards. Under this plan, 45 percent of the board of directors in any large corporation with at least $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies will be directly elected by the firm’s workers – similar to what happens under “employee co-determination” in Germany, which long has had one of the most productive and successful economies in the world.
The labor union movement needs to transform to a producers’ ownership union movement and embrace and fight for economic democracy. Historically and in its present form, the labor movement is destructive in that it agrees with the idea that propertyless people should exist to serve those who own property. The labor movement doesn’t seek to end wage slavery; it merely seeks to improve the condition of the wage slave. If it actually cared about human rights and freedom, it wouldn’t call itself the “labor movement.”
When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
• Require Federal “Stakeholder” Charters for Large Companies. Under this plan, U.S. corporations with more than $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies must obtain a federal charter from a newly established Bureau of Corporate Governance at the Department of Commerce. This new federal charter will require corporate boards to consider the interests of all of the stakeholders in a company – including workers, customers, shareholders, and the communities in which the corporation operates.
This is a forced judicial law approach, which, under the terms of incorporation, for-profit business corporations would be required to issue and sell full-voting, full-dividend payout stock to the general public when they launch an Initial Public Offering (IPO) and thereafter to underwrite their growth with the purpose of providing opportunity for both their employees and non-employees, to participate in their growth, and thereby the economy’s growth, by purchasing the newly issued stock using insured, interest-free “pure” capital credit (CHAs), repayable solely out of the full earnings generated by the earnings produced by the actual future capital assets, and without any requirement for past savings to pledge as loan collateral security.
Of course, there needs to be a financial mechanism put in place that will guarantee loan risks associated with the commercial banks making the “pure” capital credit loans; otherwise banks and lending institutions will not make the loans, and the system will continue to limit access to capital acquisition to those who already own capital — the rich, and those who can afford to speculate on the ups and downs of Wall Street market value. This is because “poor” people and the majority of Americanshave no security or collateral, or sufficient income resulting in savings to pledge against loans as security in the event full repayment does not occur, and/or are disqualified on the grounds of either unproven unreliability or proven unreliability.
Criteria must be created to qualify the corporations wanting to form new capital projects, both new start-ups and established ones, subject to this policy and those corporations that qualify overseen so as to ensure that their executives exercise prudent fiduciary responsibility to generate loan payback. Of course, the number one criteria would be that any proposed capital project be determined to be viable. Once the guaranteed loans are paid back to the lending entity, the new capital formation will continue to produce income for existing and future owners.
While tax and investment stimulus incentives (such as government contracts, grants and loans) are tools to strengthen economic growth, without the requirement that productive capital ownership is broadened simultaneously, and in the case of issuing public contracts that the companies awarded the contracts by fully employee-owned, the result will continue to further concentrate productive capital ownership among those who already own, and further create dependency on redistribution policies and programs to sustain purchasing power on the part of the 99 percent of the population who are solely dependent on their labor worker earnings or welfare to sustain their livelihood. By stimulating economic growth tied to broadened productive capital ownership the benefits are two-fold: one is that over time the 99 percent will be enabled to acquire productive capital assets that are paid for out of the future earnings of the investments and gain greater access to job opportunities that a growth economy generates.
• Ban Stock Buybacks. Under this plan, large-scale stock buybacks will be treated like stock manipulation, just as they were before 1982.
Require Firms that “Outsource” Production to Low Wage Countries or Automate to Convey Shares to “Laid Off” Employees. Under this plan, the owners of firms that dispose of American labor to take advantage of robots or cheap labor overseas will be required to share the gains that they make through such practices with those whom these practices harm. Champions of “globalization” and “automation” often claim “everybody wins” through these practices, or that at least the gains exceed the losses. If those claims are true, then the owners of those firms can more than afford to share their gains with the workers they displace. It is time to enable the owners of outsourcing and automating firms literally to “put their money” – that is, their ownership shares – “where their mouths are.”
Strong tariffs and denial of access to American markets should be imposed on American corporations who are outsourcing supply chain goods and products or producing products for export to the United States in slave-wage labor and environmentally and human rights non-regulated countries. We should, however encourage advancing our own manufacturing capabilities with the most sophicatelly advanced automation- and “machine”-dominent technologies, but ensure they are broadly owned by remaining employees, former employees displaced and other citizens, always as individuals.
• Establish a U.S. Employee Ownership Bank. Under this plan, a $500 million U.S. Employee Ownership Bank will be created to provide low-interest loans, loan guarantees, and technical assistance to workers who want to purchase their own businesses through the establishment of Employee Stock Ownership Plans (ESOPs) or Eligible Worker-Owned Cooperatives. In order to be eligible for assistance under this plan, the ESOPs or worker coops would need to be at least 51 percent owned by workers.
My former partner and mentor, as well as corporate tax attorney, investment banker, binary economist and author, Louis O. Kelso (now deceased) was the architect and pioneer of the Employee Stock Ownership Plan (ESOP), which Kelso invented to enable working people without savings to buy stock in their employer company and pay for it out of its future dividend yield — on the promise of the capital investment’s future income.
Kelso created the ESOP as a credit mechanism, which, with the support of Senator Russell Long (Democrat, Louisiana), was included in the employee benefits sections of the Internal Revenue Code (Employee Retirement Income Security Act of 1974 [ERISA], also known as the Pension Reform Act) as legislation not to look like something new and different.
The ESOP provides access by employees to capital credit to buy company stock and pay for it in pre-tax dollars out of what the assets underneath that stock yield. Bank loans are made to the ESOP trust that represents employees, instead of to the company (current owners). The trust gives the lender a note and with the borrowed monies makes the investment in the company stock. The company then issues stock to the ESOP trust. The company now has the money, which otherwise could have been borrowed directly without the ESOP (benefiting current owners), to make the planned investment and repay the loan from pre-tax forecasted future capital earnings. The company promises the bank to make pre-tax full-dividend payments to the ESOP trust to enable the trust to replay the lender. Assuming that it would take five years for that capital investment to pay for itself, at the end of five years the employees now own the full stock value in the expanded company.
Companies can use the ESOP as the credit mechanism to create employee ownership in ratios up to a 100 percent leverage buyout. Nothing has been taken away from the existing owners. However, using the ESOP, the existing owners, unless also an employee, will surrender the exclusive right to acquire more ownership in the company and have a smaller percentage of ownership in the total company, but they have not been prevented from making a fair rate of return on their thus-far accumulated ownership shares because the company earns a rate of return throughout the process. After the loan has been paid off with pre-tax earnings, the employees will have more earnings from capital and they will have more consumer power to purchase goods, products and services. Multiply this by tens of thousands of employee-owned companies and the economy revs up to grow dramatically.
There are now more than 7,000 profitable ESOP companies, but only 1,500 of those companies are reportedly worker majority owned, with workers paying for their stock shares out of future corporate profits, not by reducing their take-home labor worker incomes.
ESOPs work as designed and optimized when the workers receive the full property rights as owners, including full-voting rights, not simply treated as beneficial owners with power concentrated at the top of the company, without any accountability or transparency. Unfortunately, some ESOPs have been structured so that the rights, powers, and benefits of ownership remain concentrated in a small non-accountable elite controlling corporate and financial governance. When all of the employees are owners, dependent on their income from the company’s bottom line rather than through ordinary labor wages, salaries and benefits, the workers’ economic interests are more invested to see that their company succeeds. In this way, each person in the company is empowered as a labor worker and as a capital “worker” (owner) and inspired to work together as a team to make better operational decisions to serve and maximize value to their customers.
Under our current financial system, the security (collateral) necessary to secure an ESOP loan must come from the company, and therein the current owners are providing the security to broaden employee capital ownership with the benefit that expanded capital ownership drives expanded consumer power to purchase products and services. (This is somewhat akin to Henry Ford’s reported policy to pay workers sufficient wages to enable them to purchase the automobiles they manufacture.) Under this scenario the company owners are “insuring” the risk without a benefit, which can be re-compensated by paying the employees less labor wages, reduced pension benefits, and receiving government tax forgiveness benefits, which are written into the Internal Revenue Code.
With the ESOP, employees can acquire capital ownership with the earnings of capital. ESOPs have thus far only provided part of the solution, and the stock acquisition is limited to the employer-company and to those employed by a for-profit business corporation.
Robert Ashford, Professor of Law at the Syracuse University College of Law (New York) and a former lawyer in Kelso’s San Francisco law firm, specializes in the teaching of Kelso’s binary economics. He has also written a book entitled Binary Economics: The New Paradigm with Rodney Shakespeare. Ashford has expanded the ESOP trust into what he terms the “Super ESOP,” which includes multiple company diversification facilitated with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration mortgage insurance concept). Under Ashford’s plan, the promissory note can be offset to the government’s central Federal Reserve Bank in return for the cash equivalent of the amount of the loan, less an administrative fee. The only cost to the direct lending bank in making a loan to the corporation would be the administrative fee, or about 2 percent of the loan’s principal and then another 2 percent for capital credit insurance, with an additional quarter of a percent paid to the Federal Reserve Bank to monetize the loan and give the lender the same cash as it would have had if it had actually loaned money to the corporation. The lender’s cash loaned to the ESOP trust is replenished with the Federal Reserve Bank cash. When the company pays the ESOP trust enough money to enable the trust to repay the lender, the lender has to retrieve the note and pay back the Federal Reserve Bank. Thus, the loan cost would be essentially not more than 5 percent to allow ownership-broadening financial capital to be invested in ownership-broadening ESOP trusts to create new capital owners. Thus, national capital credit insurance replaces the requirement for the current corporate owners to pledge security.
ESOPs and other Kelsonian plans avoid the gambling trade and Wall Street firms that play with your money. The ESOP circumvents that. According to Kelso: “In a single transaction, you finance tools for the employer and ownership for the employees. The pre-tax yield of corporate assets of prosperous companies varies from 25 to 60 percent. The yield on secondhand securities [previously owned] is around five or six percent. Sure, with capital gains, you can get a little more, but don’t forget, that’s a zero-sum game; for every gainer, there’s a loser. Wall Street doesn’t fly any airplanes or raise any corn or do anything else in the way of producing products and services. It just plays games with your dough. And when you take it out in pensions, you’re going to get less than the company put in for you. You have to; that’s the dynamics of it.”
• Guarantee a Right of First Refusal. Under this plan, workers will be given the right to buy a company when it goes up for sale, is closing, or if a factory is moving overseas and will receive financial assistance from the U.S. Employee Ownership Bank to make that possible.
• Create Worker Ownership Centers. Under this plan, worker ownership centers, modeled after successful programs in Ohio and Vermont, will be established in every state and regional center in the country. These centers will educate retiring business owners and workers about the benefits of employee ownership. It has been estimated that with education and financial assistance from the federal government between 150,000 to 300,000 retiring owners of small to mid-sized businesses could sell their companies to their workers.
• Diversify Corporations. Under this plan, we will develop rules to diversify corporate boards by ensuring a significant portion of every board be comprised of people from historically underrepresented groups (e.g. marginalized by gender, race, ethnicity, religion, disability or sexuality). And we will require every corporation to complete an annual report that gives the compensation, gender, and racial composition of board and employees.
What follows in Sanders’ solutions list I can essentially agree with, including Make Large Corporations Pay Their Fair Share Of Taxes, though I would put the burden of paying the taxes on the owners of the corporations, rather than the corporations, as legal business entities.
As noted above we need to eliminate all tax loopholes to eliminate corporate and personal tax avoidance and business subsidies, and raise the corporate income tax to at least 90 percent, but allow corporations to fully eliminate their corporate tax burden by paying out 100 percent of their earnings to their owners, who then would be subject to a personal income tax. This would effectively eliminate retained earnings and corporate debt financing, neither of which creates any new owners, and instead would incentivize corporations to issue and sell new stock, not only to those employed by the corporation but to EVERY child, woman and man who would be equally eligible to purchase the new shares with the earnings of the new investments in the corporation’s growth.
In conclusion, the Center For Economic and Social Justice advocates new justice-committed leaders, such as Bernie Sanders, especially those who want to end the corruption built into our exclusionary system of monopoly capitalism — the main source of corruption of any political system, democratic or otherwise. The CESJ advocates the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the 99 percent of American citizens who rely only on their labor worker earnings. Under the JUSTThird WAY’s more just and simple tax system, access to ownership of the means of production in the future would by provided to every child, woman and man by requiring the government to lift all existing legal and institutional barriers to private property stakes as a fundamental human right. The system was made by people and can be changed by people. Guided by the right principles of economic justice, “we the people” can organize and demand that the system be reorganized to make true economic democracy the new foundation for true political democracy. The result of this movement of new justice-committed leaders and activists will be inclusive prosperity, inclusive opportunity, and inclusive economic justice.
The following is proposed:
• Eliminate all tax loopholes to eliminate corporate and personal tax avoidance and business subsidies.
• Provide a tax exemptionof $100,000 for a family of four to meet their ordinary living needs.
• Encourage corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full-voting, full-dividend payout shares for broad-based citizen ownership.
• Eliminate the payroll tax on workers and their employers, but
• Pay out of general revenues for all promises for Social Security, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.
• Establish a single tax rate for all incomes from all sources above the personal exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term national debt. The poor would pay the first dollar over their exemption levels as would the hedge fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes which under some tax proposals would be exempted from any taxes.
• At death, individuals should be discouraged from passing on their wealthy estatessolelyto their heirs. As a substitute for inheritance and gift taxes, impose a transfer tax on the recipients whose holdings exceed $1 million in value, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
Begin creating an asset-backed currency that could enable every child, woman, and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to purposely acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.
• The CHAs would process annually an equal allocation of productive credit to every citizen to specifically and exclusively purchase full-earnings, full-dividend payout shares inqualified corporations, both established and start-ups,needingfundsforgrowingtheeconomy through viable self-liquidating capital formation projectsand private sector jobs for local, national and global markets.
• The shares would be purchased using interest-free capital credit wholly backed by projected “future savings” (earnings) in the form of new productive capital assets as well as the future marketable goods, products and services produced by the added technology, renewable and “green” energy systems, manufactories, rentable space for entrepreneurial endeavor and infrastructure, both repaired and new, added to the economy.
• Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, which employs the concept of “risk pooling to spread financial risks evenly among the citizenry, but
• Would not require citizens to reduce their funds for consumption (savings) to purchase shares, nor would there be any other requirement other than being a citizen.
For an in-depth overview of solutions to economic inequality, see my article “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://www.foreconomicjustice.org/?p=11
Other references include:
Support the Agenda of The JUST Third WAY Movement (also known as “Economic Personalism”) at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/ and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
Support the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/
