July 10, 2013
Skeptical of a bid to overhaul the tax code by corporate-friendly congressional tax writers, Sen. Bernie Sanders on Wednesday laid out specific proposals to raise revenue by closing loopholes that let multi-national corporations and oil companies avoid hundreds of billions of dollars in taxes.
Sen. Max Baucus, D-Mont., and Rep. Dave Camp, R-Mich., chairmen of the Senate Finance Committee and the House Ways and Means Committee, this summer launched a nationwide tour to hear what corporations want in a revamped tax code. Instead, Sanders said, the tax code should be reformed to address the needs of the middle class and working families, reduce deficits and make profitable corporations and the wealthiest Americans pay their fair share.
“I agree that our current tax code is too complex and must be simplified,” Sanders said. “But at a time when the American population is aging and investments in our crumbling infrastructure are desperately needed, we must not provide more tax breaks to profitable corporations and wealthiest Americans who already are doing phenomenally well and in some cases pay nothing in federal income taxes,” added Sanders, a member of the Senate Budget Committee and Joint Economic Committee.
Sanders’ specific proposals would:
- Stop large corporations from stashing their profits in the Cayman Islands and other offshore tax havens to avoid paying U.S. taxes. Legislation already introduced by Sanders would raise more than $590 billion over the next decade.
- Establish a Wall Street speculation fee to ensure that large financial institutions pay their fair share in taxes. A speculation fee of 0.03 percent on the sale of credit default swaps, derivatives, options, futures, and large amounts of stock would reduce gambling on Wall Street, encourage the financial sector to invest in the productive economy, and reduce the deficit by $352 billion over 10 years.
- End tax breaks and subsidies for big oil, gas and coal companies to reduce the deficit by more than $113 billion over the next 10 years. The five largest oil companies in the United States have made more than $1 trillion in profits over the past decade. Exxon Mobil is now the most profitable corporation in the world. Large, profitable fossil fuel companies do not need a tax break.
- Tax capital gains and dividends the same as work. Taxing capital gains and dividends the same way that we tax work would raise more than $500 billion over the next decade. The top marginal income tax for working is 39.6 percent, but the top tax rate on corporate dividends and capital gains is only 20.
Enacting all of these proposals would raise more than $1.5 trillion in new revenue over the next decade.
Senator Bernie Sanders provides some excellent recommendations for a fairer tax code, the fails to recommend the reform of the tax code to incentivize expanded, private, individual ownership of FUTURE productive capital asset economic growth. He recommends “encouraging the financial sector to invest in the productive economy,” but does not include with that the necessity to finance such investments using interest-free pure capital insured credit loans made available to EVERY man, woman and child citizen of the United States to invest in the FUTURE productive economy.”
To solve this challenge, several policies must be implemented:
1. Tax reform is needed to incentivize broadened individual ownership of corporations by their employees. As an incentive, provide a tax deduction to corporations for dividend payouts, which would tighten-up the right of each owner to his or her full share of profits, a basic and historic right of private property. It would eliminate double and triple taxes on corporate profits, shifting the burden of taxation to personal incomes after exempting initial incomes that would allow low and middle class citizens not to pay taxes on incomes needed to cover basic living expenses. It will also encourage corporations to finance their growth through the issuance of new full voting, full dividend payout shares for financing their productive capital growth needs through Employee Stock Ownership Plans (ESOPs) and Capital Homestead Accounts (CHAs). Politically we need to insist that politicians lift barriers to the democratization of future ownership opportunity based on sound principle, rather than redistributive taxation.
2. As increasingly more workers acquire ownership stakes in FUTURE corporate productive capital assets using ESOP financing mechanisms, workers will build second incomes to support their living expenses, which in turn means they will be better “customers with money” to support demand for the products and services that the economy is capable of producing. By reason of the higher marginal spending rate on the part of workers second incomes, more of the additional income earned by the new capitalists (who have many unsatisfied consumer needs and wants) will be spent on consumption than if the income had been earned by those capitalists who now have concentrated the ownership of productive capital exclusively, and who have few, if any, consumer needs and wants. Such broadened incremental consumption will fuel a demand for more consumer products and services, which in turn will provide incentive for greater productive capital investment.
3. For all Americans, the Federal Reverse needs to create an asset-backed currency that can 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 using essentially interest-free credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable products 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, if necessary, government reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares.
4. Reform the tax code such that the tax rate would be a single rate for all incomes from all sources above an established personal exemption level (for example, an exemption of $100,000 for a family of four to meet their ordinary living needs) so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt. The poor would pay the first dollar over their exemption levels as would the stock fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes.
5. As a substitute for inheritance and gift taxes, a transfer tax should 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.
6. Eliminate all tax loopholes and subsidies.
These polices would result in rapid and substantial economic growth with the GDP rate in double digits. As a result of the stimulus effect, more REAL, decent paying job opportunities and further technological advancement would be created while simultaneously broadening private, individual ownership of FUTURE wealth-creating, income-generating productive capital assets, which would support second and primary incomes for ALL Americans.
In this new FUTURE economy, a citizen would start to benefit financially at the time he or she enters the economic world as a labor worker, to become increasingly a capital owner, whose productive capital assets contribute as a non-human worker earning a second income, and at some point to retire as a labor worker and continue to participate in production and to earn income as a capital owner until the day you die.
As we ALL contribute to the building of a FUTURE economy that can support general affluence for EVERY man, woman and child, at some point as the technologies of production further advance there will be far less need for human workers and productive capital asset ownership will become the primary income source for most people. As general affluence becomes more widespread people will be free and economically secure to pursue their creative desires and pleasures, further contributing to the cultural and societal development of the country.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
http://occupydemocrats.com/bernie-sanders-wants-to-tax-the-corporations-help-the-american-people/
http://www.vox.com/2014/10/14/6839305/bernie-sanders-running-for-president-2016
