On February 28, 2013, Sheila C. Bair writes in The New York Times:
LAST month Emmanuel Saez, a celebrated economist at the University of California, Berkeley, issued another depressing report on income inequality. Among other things, Mr. Saez examined how real family incomes changed in the United States from 2009 to 2011, the first two years of the recovery. The richest 1 percent of Americans, he found, saw their incomes grow, on average, by more than 11 percent. As for the other 99 percent? You guessed it: incomes shrank by nearly half a percent.
The phenomenon is hardly new. The yawning gap between rich and poor has been growing since the 1970s and reached a 90-year peak in 2007, just before the financial crisis. The Great Recession narrowed the gap a bit, but now, once again, the richest Americans are vacuuming up what wealth is out there, a trend that Mr. Saez expects to continue.
I am a capitalist and a lifelong Republican. I believe that, in a meritocracy, some level of income inequality is both inevitable and desirable, as encouragement to those who contribute most to our economic prosperity. But I fear that government actions, not merit, have fueled these extremes in income distribution through taxpayer bailouts, central-bank-engineered financial asset bubbles and unjustified tax breaks that favor the rich.
This is not a situation that any freethinking Republican should accept. Skewing income toward the upper, upper class hurts our economy because the rich tend to sit on their money — unlike lower- and middle-income people, who spend a large share of their paychecks, and hence stimulate economic activity.
But more fundamentally, it cuts against everything our country and my party stand for. Government’s role should not be to rig the game in favor of “the haves” but to make sure “the have-nots” are given a fair shot.
A Plan For Conservatives To Take Over The GOP By 2016
The Republican Party basic premises should be:
There is no genuine political liberty without economic liberty, and that which is destructive of economic liberty is necessarily destructive of political liberty. Liberty does not mean license to steal or hoard.
The “American Dream” of 1776 enunciated in the founding papers of the Republic, underwrote minimal Government and maximal individual political and economic liberty, and drew inspiration from the widely held view that life, liberty, and property were an inseparable trinity, a belief the Republican Party shares.
That dream has largely been converted into a nightmare in modern America through the concentrating effects of giant Government and monopoly capitalism, which may be handmaidens in tyranny. This situation has come about because of philosophical thinking that is inadequate to meet the needs of the 21st century, thinking which has not kept pace with the fruits of science; and the situation is also due to a combination of conspiracy, greed, and imported utopianistic political philosophy.
In a modern, technological era it is the ownership of productive capital wealth, not the labor of people, that is the primary creator of affluence.
Hence, it is access to ownership of productive capital wealth, not to jobs, wherein the national economic policy guidelines for the 21st century ought to lie.
The reality is that tectonic shifts in the technologies of production are destroying and devaluing jobs and will continue to do so as business corporations further strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.
Because productive capital is increasingly the source of the world’s economic growth, therefore, it should become the source of added property ownership incomes for all. If both labor and capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.
As ownership of productive capital wealth becomes widely diffused, political power ought also to be widely diffused.
The existing taxing power of government ought to be used in a way to restructure the economy along the guidelines of universal access to ownership of productive capital wealth with a thrust toward the creation of new wealth.
The ultimate result of the use of the taxing power of government to stimulate the widespread access to ownership of productive capital wealth should be a growing independence of an economically emancipated people both from reliance upon government and from the wage slavery brought into being by monopolistic and oligarchic ownership; and the role and function in our lives both of government and of monopoly and oligarchy ownership ought to diminish.
The Republican Party interest should be to foster an economic policy direction toward broadening private ownership participation for all people in the capital wealth base of our economy.
The American Dream since the time of the Founding Fathers has been to foster individually owned free enterprise. Our economic policies, and tax laws foster concentration of business ownership in the hands of a wealthy few by subsidizing and favoring narrowly owned conglomerates and monopolistic combines. This is not good. We need a new economic policy thrust which will promote the birth of profitable new business enterprises and expand the ownership of large corporations.
The Republican Party should seek to lead “a quiet revolution”––a national movement for economic justice, tax equity, and governmental responsibility. The thrust of this movement is to focus upon tax reformation and economic policy. To guide this movement toward realizing the goal of economic justice the Party should recommend positive and constructive reforms in the tax laws, policies, and procedures of the U.S. Government.
When the Federal income tax was authorized by the 16th amendment to the Constitution, it was designed to levy taxes in a progressive and fair way on all income, “from whatever source derived.”
But, over the years, exception after exception has been made to this principle; tax loopholes have allowed the wealthy and the wealthy owners of the corporations to escape high taxes. This means that the tax burden has fallen increasingly on low- and moderate-income working people.
The average American worker works at least 2 out of 5 days just to pay taxes, while scores of wealthy people with incomes over $1 million pay no Federal income taxes at all.
This is not just.
There is hardly any progressivity in taxation. Those with low and moderate incomes pay a higher percentage in taxes than those with higher incomes.
Tax loopholes and Government subsidies are really a welfare program for the rich.
Recommendations For Tax Reformation: A Just Tax Concept For The U.S. Government
The income tax, authorized by the 18th amendment to the Constitution, was intended to levy taxes in a progressive and fair way, in order to pay for the legitimate functions of Government as authorized by the people through their elected representatives.
Implicit in the original income tax concept was the “ability-to-pay-theory,” that those who earn or receive more income should pay a progressively larger proportion of their incomes to support Government.
Another concept inherent in the original income tax law was that Government should limit in some manner the vast personal incomes derived by a few people or legal entities owning huge amounts of capital wealth and property.
Tax policies today encourage concentration of capital wealth and property, generating on one hand a huge governmental bureaucracy to regulate centralized economic activity, and on the other hand, an ever-expanding number of economically dependent people requiring another huge government bureaucracy to administer to their needs.
We, the Republican Party, believe in economic justice, tax equity, and governmental responsibility, and that the economic, social, and legal injustices of our society are fostered by tax policies which enable the rich to become richer, while the majority of the working people, the elderly, small businessmen, family farmers, and poor pay the taxes.
We advocate an economic policy designed to broaden private individual ownership of all forms of property––particularly property ownership rights which yield viable incomes to people. The function of Federal tax policy then should be to encourage broadened ownership, and discourage private concentrations of capital wealth and excessive personal incomes from property holdings.
For genuine tax reform, the Republican Party advocates positive, constructive, and just reforms in tax law, with review every 5 years or less.
As part of this advocacy the Republican Party embraces the policy programs reflected in the proposed Capital Homestead Act. This Act was conceived by a group of justice-committed leaders at the Center For Economic & Social Justice (www.cesj.org) 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. Based on the principles propagated by a balance Just Third Way approach, the Republican Party advocates the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the majority of American citizens who now only rely on their labor worker earnings. Under the Just Third Way more just and simple tax system, the following is proposed:
• Eliminate all tax loopholes and subsidies,
• Provide an exemption of $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 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, 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.
• The tax rate would be a single 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 debt, but 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.
• As a substitute for inheritance and gift taxes, a transfer tax would be imposed on the recipients whose holdings exceeded $1 million, 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.
• The Federal Reserve would stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and
• Begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.
• The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets,
• The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.
• Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but
• Would not require citizens to reduce their funds for consumption to purchase shares.
The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on our only legitimate monopoly––the State––and whatever elite controls the coercive powers of government.
Legitimate Functions Of Government And Governmental Responsibility
The Republican Party believes that tax policy must by necessity, be linked to a definition of the legitimate functions of Government and governmental responsibility with respect to the uses of Federal tax revenues.
Therefore, the tax revenues flowing to the Federal Government as a result of our recommendations should be used for the following purposes:
1. Promote the general welfare for all people.
2.Encourage viable and broadly owned business enterprise, and a free competitive market.
3. Foster broad private individual ownership of the capital wealth base of our economy.
4. Insure a fair and meaningful stake among individuals in the future of our Nation.
5. Promote economic justice for all people.
6. Enhance civilization, and encourage the arts, science, significant educations, and other creative human endeavors.
7. Guarantee individual liberty, and economic security and independence for all people.
8. Promote peace and world enrichment, while providing for the common defense.
9. Encourage community enhancement and environmental quality.
10. Enhance life, health, and personal happiness for all people.
11. Foster domestic tranquility and fraternity.
12. Encourage human tolerance, respect, and personal responsibility and dignity.
13. Promote mutual cooperation and trust for mutual benefit for all people.
The ultimate result that the Republican Party seeks is growing independence of an economically emancipated people both from reliance upon government and from the wage slavery brought into being by monopolistic and oligarchic ownership. As a result, the role and function in our lives both of government and of monopoly and oligarchic ownership ought to diminish.
Recommendations For Future Study
While the Republican Party is certain that our tax reform recommendations would generate substantial revenue increases to the Federal Government, strengthen the Nation, and result in reducing the burden upon all poor and working people, particularly those families with incomes under $30,000 per year, further in-depth study is necessary to determine the full impact of such a new tax and economic policy thrust, as herein advocated.
We therefore recommend that a Tax Reformation Commission be established by the U.S. Congress to conduct an in-depth study of our tax reform recommendations and those of others to determine the impact of these measures on the economy, the structure of private property ownership and free enterprise, the concentration of wealth, income distribution, and revenues generated to the Federal Government.
We recommend, also, that the U.S. Congress establish a census of wealth valuation inventory. Every 5 years, the Commissioner of Internal Revenue, in conjunction with the Bureau of the Census, should conduct a valuation census of the property holding of all individuals, held in accordance with regulations published in the Federal Register. These records should be treated with the same confidentiality as is presently given to personal income tax records.
The wealth valuation computations for each individual would be used to establish one’s priority relative to other individuals for qualifying for Government programs aimed at strengthening the self-sufficiency of the individual through acquisition and ownership of new and/or transferred capital wealth assets.
While tax and investment stimulus incentives are excellent tools to strengthen economic growth, without the requirement that productive capital ownership is broadened simultaneously, 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 majority of the population who are 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 majority of citizens 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.
By instituting a just tax reformation program intended to realize tax equity and governmental responsibility for all people we can forge an affluent future for EVERY American.
Copyright 2013 Gary Reber, All Rights Reserved
Gary Reber
Executive Director
ForEconomicJustice.org
26864 Mandelieu Drive
Murrieta, CA 92562
951 676 4914
gary@foreconomicjustice.org
