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Gary Reber
Published: Friday 3 May 2013
A National Right To Capital Ownership Act and the Capital Homestead Act that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

The Solution to America’s Economic Decline

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As a nation, we have lost the essence of the “American Dream”––economic freedom and self-sufficiency realized through private property ownership rights and democratic government.

Our 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.

That dream has largely been converted into a nightmare in modern America through the concentrated control 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 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 archaic political philosophy.

What has and continues to escape the focus of conventional economists, and the politics of progressives, centralists and conservatives, is that the wealthy are rich because they own productive capital––non-human wealth-creating assets used to produce products and services. The reality is that in most economic tasks and in the overall economy, productive capital (not human labor) is independently doing evermore of the work that results in the products and services produced for consumption. It is productive capital’s increasing productiveness and evolution, rather than human effort (productivity conventionally considered) that is the productive means most responsible for economic growth. Effectively, technological innovation and invention limits new, higher-productivity jobs to relatively fewer workers, leaving most other people willing and able to work with lower-paying job opportunities or no jobs at all. This increasing majority is finding it more and more difficult to afford the products and services that are increasingly produced by productive capital.

When the right to participate in production through productive capital ownership is effectively denied, especially when tectonic shifts in the technologies of production destroy and degrade the worth of jobs, then the people affected become increasingly insecure in satisfying their and their family’s basic survival. Such conditions force them to seek low-pay, low-security jobs, or either charity or welfare, or desperately engage in illegitimate means. Such disintegration tears at society’s sense of fairness and justice, and spreads resentment, alienation and despair.

It is essential that people focus their thinking on the understanding of who and what creates wealth, in order to fully understand how to solve growing income inequality and the disintegration of the nation wherein the majority of citizens are regulated to low-pay job serfdom and public welfare.

In a modern, technological era it is the ownership of wealth-creating productive capital assets, not the labor of people that is the primary creator of affluence.

Hence, it is access to ownership of productive capital assets, not to jobs, wherein the national economic policy guidelines for the 21st century ought to lie. As ownership of wealth-creating productive capital becomes widely diffused, political power ought also to be widely diffused.

Productive capital is defined as the non-human means of producing products and services (land; structures; infrastructure; tools; human-intelligent and non-human-intelligent machines; super-automation; robotics; digital computerized processing and operations; certain intangibles that have the characteristics of property, such as patents and trade or firm names; and the like owned by individuals).

Tectonic shifts in the technologies of production are constant and result in new formations of productive capital, whose role is to do ever more of the work, which produces income to the owners of the capital assets. People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention.

Businesses employ both productive capital and people, but full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to produce efficiently and profitably. Because of the ever-accelerating shift to productive capital to lower business operational costs, jobs are constantly being eroded. The other aspect impacting job security––the overwhelming source of income for the majority of Americans––is global competition and the sourcing of low-cost “slave” labor. As a result, American businesses seeking to compete in global markets and within the United States market, which is driven by low pricing demand, have out-sourced manufacturing to other countries whose labor costs are significantly lower and whose tax extraction rates and environmental regulations are respectively far less costly and stringent. Such out-sourcing is motivated by the market demand to produce their products and services more efficiently and more profitably.

This combination of free-market forces means that 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, compounded by far less costly out-sourcing of production.

As a result, there are fewer and fewer “customers with money” to purchase the products and services that can be more efficiently produced with productive capital. Economic growth will always be stalled when there are high levels of economic inequality because there will be an imbalance between production and consumption.

Why is this happening?

The reason is simple. A relative few people OWN the preponderance of the nation’s productive capital assets and are positioned to OWN the FUTURE productive wealth, from which they earn dividend income and valuable capital gains asset growth. This is why there is widening economic inequality resulting in class conflict between the so-called 1 percent “successful” ownership class and the 99 percent, who are capital-less or under-capitalized, and whose ONLY source of income is a job or taxpayer-supported government welfare derived from tax extraction and national debt. This Income inequality is exponentially crippling the United States from realizing its creative and social and just economic potential.

Thus, there is the imbalance between production and consumption. A few wealthy people are thereby able to rig the “system” to manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the money through monopolized productive capital ownership. Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital owner more productive. How much employment can be destroyed by substituting machines for people or lowering operational costs is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent is not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting “machines” for people or devaluing labor wages and salaries. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption, which is the problem with the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

The solution is to employ capital credit mechanisms to facilitate the productive capital acquisition by EVERY citizen, whether poor or in the middle class, to fuel a larger and more affluent economy. This can be facilitated on the basis of self-finance, whereby the productive capital assets, after returning its acquisition costs, begin to pay a fully-distributed capital earnings dividend to its new owners, thus initially supplementing their labor income and reducing their taxpayer-supported welfare dependence, and over time building income to replace their dependency on job earnings and secure their retirement as they age.

For the nation to overcome widening income inequality, the obvious, logical solution is for people to OWN THE “MACHINES” and non-human means of production that result from technology. Broadening productive capital ownership should be the priority course of action for the FUTURE. “FUTURE” is capitalized to emphasize that the private property rights of ALL citizens MUST be respected, honored, and protected. Thus, ANY solution(s) to transform the United States into an OWNERSHIP CULTURE must not undermine or seize the private property of the 1 to 10 percent who now own up to 90 percent of the corporate wealth. Instead, the solution(s) MUST expand the ownership pie over time and result in EVERY American man, woman and child earning income to support an affluent life. The result would be that those who now own America would still be owners but their percentage of the total ownership would decrease over time, as ownership gets broader and broader and benefits the traditionally disenfranchised poor and working and middle class, who will become sought-after “customers with money.” Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. This also means that society can profitably employ unused and idle productive capacity and invest in more productive capacity to service the demands of a growth economy.

Significantly, by facilitating the acquisition of FUTURE wealth-creating productive capital assets by ALL Americans, everyone will increasingly be able to afford to purchase with their productive capital earnings (dividend income) what is increasingly produced by productive capital. This in turn will create the market conditions for sustainable economic growth, and as private, individual ownership spreads, the larger the economy will grow as people’s incomes increasingly grow and they purchase more products and services to satisfy their needs and wants. Thus, the effect created would be a self-propelling economic engine of growth capable of producing general affluence for every American, and not limited to those few who now OWN America’s productive power and whose consumption needs are satisfactorily, if not overly met.

This balanced Just Third Way approach to building a FUTURE economy that supports affluence for EVERY American is presently not in the national discussion. It appears that the President of the United States, the elected Congressional representatives and Senators, academia, and the media are oblivious to this principled solution that has the ingredients to power economic growth at double-digit GNP rates.

To achieve this goal requires investment in FUTURE income-producing, wealth-creating productive capital assets while simultaneously broadening private, individual ownership of the resulting expansion of existing large corporations and future corporations. Not only is employee ownership the norm to be sought wherever there are workers but beyond employee ownership the norm should be to create an OWNERSHIP CULTURE whereby EVERY American can benefit financially by owning a SUPER IRA-TYPE Capital Homestead Account (CHA) portfolio of income-producing, full-voting, full-dividend payout securities in America’s expanding corporations and those newly created

This master plan agenda can be accomplished by applying the logic of corporate finance, which is self-financing and asset-backed credit for productive uses to grow the economy. People invest in capital ownership on the basis that the investment will pay for itself. The problem facing the nation is routed in the financial system, which must be reformed.

The wealthy ownership class understands and employs the strategy of investing in opportunities expected to pay for themselves in a reasonable period of time, typically 5 to 7 years, perhaps 10 in some circumstances. This is the fundamental logic of corporate finance couched in "return on investment" terms. This same logic is the personal investment strategy steadfastly followed by successful capitalized and under-capitalized investors. The rich further understand that once the acquisition cost is paid for out of the FUTURE earnings of the productive capital investment, the asset then continues to earn income indefinitely, or in perpetuity. This is precisely the process used by the rich to get richer.

The solution is not to focus on JOB CREATION but to focus on OWNERSHIP CREATION whereby EVERY American can acquire private, individual ownership in FUTURE income-producing productive capital asset investments without the need to limit their financing requirements to past savings and/or require workers to reduce their consumption incomes to become owners. This is not about creating small businesses, which tend to be operated by hands-on entrepreneurs and proprietors, but about creating a viable portfolio of income-producing, full-dividend, full-voting stock ownership in large corporations, whereby there is no education and talent requirement to simply be a share owner. Large corporations are already publicly owned by millions of Americans. But what they have purchased is value-diluted stock through the “stock market exchanges,” purchased with their earnings as labor workers. Their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners. And no one addresses whether Dow Jones gains have anything to do with the reality of the health of businesses. The stock market deals in secondhand securities, which essentially translates to a gaming casino. Wall Street has convinced us to see ourselves as “investors” instead of “gamblers” and “perceived values” instead of “bets.”

Conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital.

America has tried the Republican “cut spending, cut taxes, and cut ‘entitlements’,” and the Democrat “protect ‘entitlements,’ provide tax-payer supported stimulus, lower middle and working class taxes, tax the rich, and redistribute” brands of economic policy, as well as a mixture of both. Republican ideology aims to revive hard-nosed laissez-faire appeals to hard-core conservatives but ignores the relevancy of healing the economy and halting the steady disintegration of the middle class and working poor. Unfortunately, not enough conservative thinkers have acknowledged the damaging results of a laissez-faire ideology, which furthers the concentration of productive capital ownership. They are floundering in search of alternative thinking as they acknowledge the negative economic and social realities resulting from greed capitalism or “Hoggism.”

The Just Third Way is a balanced approach, which encompasses the realization that the troubling economic and social trends (global capitalism, free-trade doctrine, tectonic shifts in the technologies of production, and the steady off-loading of American manufacturing and jobs) caused by continued concentrated ownership of wealth-creating productive capital assets will threaten the stability of contemporary liberal democracies and dethrone democratic ideology, as it is now understood. Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American middle class and make it impossible for more than a minority of citizens to achieve middle-class status.

Economic democracy has yet to be tried. We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income, or to engage in austerity measures or pursue government stimulus.

But how will we ever achieve affluence for EVERY American and eliminate poverty and reliance on taxpayer-supported government welfare, which is fueling national debt? This will require a return to higher income tax and corporate tax rates, which are lowered or entirely eliminated when corporations have demonstrated growth decisions that enable their workers and other citizens to finance their future growth and share in the companies’ fate as share owners. This would enable us to more effectively create investment stimulus incentives through reduced tax rates. 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 with redistribution policies and programs to sustain purchasing power on the part of the 99 percent 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 99 percenters will financially benefit from acquiring 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.

Starting with the business corporation, a legal entity created and sanctioned by state and federal government and judicial law, the government should provide tax incentives for full-dividend payouts to its stockholders, or alternatively legislate that from now on 100 percent of all profits be paid out fully as dividend payments to stockholders (thus, eliminating the corporate income tax), with the dividend income subject to individual taxation. This would effectively prohibit retained earnings financing of new productive capital formation (reinvesting the corporate earnings already earned). The government could also limit debt financing by legislating some ratio formula to annual revenue under which a corporation could debt finance new productive capital formation with borrowed monies. Both retained earnings and debt financing only enhance the ownership holding value of the existing corporate ownership class and do nothing to create new owners. Thus, the rich get richer systematically and capital ownership concentration is furthered, facilitated by financing further productive capital acquisition out of the earnings of existing productive capital.

In place of retained earnings and debt financing, the government should incentivize business corporations to issue and sell full-voting, full-dividend payout stock to more people to underwrite new productive capital formation, with the purpose of providing opportunity for new owners, both employees of corporations and non-employees, to participate in a growing economy. This approach can be applied to singular corporations or multiple corporate diversification portfolios facilitated with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration concept). This would provide the solution to the need for a financial mechanism put in place that will guarantee loan risks; 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. This is because “poor” people have no security or collateral, or sufficient income to pledge against the loan as security, and/or are disqualified on the grounds of either unproven unreliability or proven unreliability.

Criteria must be created to qualify the corporations 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. Once the guaranteed loans are paid back, the new capital formation will continue to produce income for existing and future owners, and subsequently provide “customers with money” to support the output of the economy.

This approach would use the existing taxing power of government 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 national goal 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, while stimulating the entrepreneurial creative spirit of business innovators.

This is an agenda for “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 positive and constructive reforms in the tax laws, policies, and procedures of the U.S. Government will be necessary.

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,” in order to pay for the legitimate functions of government as authorized by the people through their elected representatives.

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

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.

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.

As a nation, we must adopt 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 private, individual ownership, and discourage private concentrations of capital wealth and excessive personal incomes from property holdings.

For genuine tax reform, positive, constructive, and just reforms in tax law, with review every 5 years or less, are needed.

Recommended Tax Reforms

1. Personal earned incomes and property-derived incomes

The tax rate would be a single rate for all incomes of natural persons from all sources above a personal exemption level 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). Provide an exemption of $100,000 for a family of four to meet their ordinary living needs.

Eliminate the payroll tax on workers and their employers, but pay out of general revenues for all promises for Social Security, Medicare, Medicaid, 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.

2. Inheritance and estate 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.

Each year tens of billions of dollars in wealth-creating productive capital assets are passed along to heirs under current tax laws. The revenues generated from inheritance taxes should be pledged to support the Social Security program, thus achieving a reduction in Social Security taxes, which are becoming a tax burden.

3. Corporations and business taxes for non-small business enterprises

A. Investment credit tax incentives––The net result of new capital wealth formation is to create more productive land, industrial plant and equipment, machinery, tools, et cetera. In a highly technological economy the purpose of scientific advancement is not to create jobs (labor intensive production), but to substitute more efficient machines, buildings, tools, and productive land for labor––human work effort. This is the basis of increasing productiveness, and has been since the invention of the wheel to today’s age of cybernetics. Invention and innovation are supposed to save labor and free people for the enjoyment of the good life, the pursuant of happiness, and the improvement of their minds and bodies––to enable the fulfillment of the needs of the flesh (man’s material needs and well-being), so that the works of the soul may flow.

With an economic policy designed to foster widespread private equity ownership participation in the capital wealth assets of our economy, the use and purpose of the investment tax credit device as a special governmental subsidy to private corporations has a significant potential for encouraging broader ownership of income-producing productive property rights among all people.

If an investment tax credit is given to a business organization, it should be limited to finance real new capital wealth expansion for widespread private ownership participation by individuals and families.

The Federal Reserve should stop monetizing unproductive debt 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 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 reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares.

B. Nonpublic close corporations––All non-publicly registered and traded corporations, that is, those that are close corporations owned by a few people, and not classified under definitions set by the Small Business Administration, Department of Commerce, as a “small business,” or whose stock is not traded on the open markets and broadly owned, should be taxed as personal holding companies. The tax policy for close corporations, which by their nature concentrate wealth and limit free enterprise, should result in expanded ownership of capital wealth and discourage such organizations.

The income of such corporations should be treated as the personal incomes of their owners and taxed at personal income tax rates as herein recommended.

This tax policy will discourage private concentrations of capital wealth, and encourage viable small businesses and widespread private popular ownership shares in the small and large business corporations of America.

C. Public corporations––Tax policy of the Federal Government should encourage broad private ownership of public corporations, Publicly registered business corporations should be taxed on a basis, which encourages broad ownership and the fullest distribution of earnings to their owners.

The following tax policies for all publicly owned private corporations should be applied, based upon the philosophy that a corporation is a creature of the State, created by law, recognized as an “artificial person,” able to amass vast amounts of capital wealth with limited liability, and can have a life in perpetuity. Since a corporation is a legally created entity, and not a human being, its function, powers, responsibilities, and ownership are a matter of significant social, political, and economic policy.

Public corporations should be taxed as follows:

1. If profits are retained, that is, reinvested and not paid to the stockholder-owners, the corporation will pay a 90 percent tax on retained earnings.

2. Dividends paid out to stockholders-owners would be deductible from corporate earnings thus making these earnings subject to personal income tax rates.

3. All subsidiary corporations and partially or wholly owned enterprises of a parent or holding corporation will be taxed as a separate enterprise entity, as under the above recommended policy.

4. Business sole proprietorships and partnerships, and close corporations classified as small business

No change in existing tax procedure are necessary, except that the tax rate on such business incomes would be the same for individuals.

5. Capital gains tax––non-public corporations and close corporations

For individuals, capital gains realized on the sale of a personal residence, owned and occupied by a natural person or persons and/or a family would be taxed at the personal income tax rate.

All other capital gains in property interests (real or personal, securities et cetera) unless exchanged within 1 year for property of equivalent value, would be taxed at the personal income tax rate.

6. Capital property holdings tax: Limits on ownership

All individuals, whether their property is combined with others in joint tenancies, co-tenancies, or community property holdings of natural persons should be subject to a capital property holdings tax if the certified net worth or equity value of the property holding of the taxpayer exceeds $1 million.

7. Tax loopholes and subsidies

Eliminate all.

Legitimate Functions Of Government And Governmental Responsibility

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 these 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 we should seek 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, and the role and function in our lives both of government and of monopoly and oligarchic ownership ought to diminish.

Recommendations For Future Study

While these tax reform recommendations will 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, an in-depth study is necessary to determine the full impact of such a new tax and economic policy thrust, as herein advocated.

A Tax Reformation Commission should be established by the U.S. Congress to conduct an in-depth study of these 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.

The U.S. Congress should establish a census of wealth valuation inventory. Every five 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.

Concluding Remarks

The fact is that political democracy is impossible without economic democracy. Those who control money control the laws that foster wage slavery, welfare slavery, debt slavery and charity slavery. These laws can and should be changed by the 99 percent and those among the 1 percent who are committed to a just and economically classless market economy, true equality of opportunity, and a level playing field in the future for 100 percent of Americans. By adopting economic policies and programs that acknowledge every citizen’s right to become a capital owner as well as a labor worker, the result will be an end to perpetual labor servitude and the liberation of people from progressive increments of subsistence toil and compulsive poverty as the 99 percent benefits from the rewards of productive capital-sourced income.

A National Right To Capital Ownership Act and the Capital Homestead Act that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk to the Federal Reserve. The Federal Reserve Board is already empowered under Section 13 of the Federal Reserve Act to reform monetary policy to discourage non-productive uses of credit, to encourage accelerated rates of private sector growth, and to promote widespread individual access to productive credit as a fundamental right of citizenship. The Federal Reserve Board needs to re-activate its discount mechanism to encourage private sector growth linked to expanded productive capital ownership opportunities for all Americans.

The labor union movement should transform to a producers’ ownership union movement and embrace and fight for this new democratic capitalism. They should play the part that they have always aspired to––that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline. Unfortunately, at the present time the movement is built on one-factor economics––the labor worker. The insufficiency of labor worker earnings to purchase products and services increasingly produced by productive capital gave rise to labor laws and labor unions designed to coerce higher and higher prices for the same or reduced labor input. With government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions.

The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today––wages, hours, and working conditions––and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.

If we continue with the past’s unworkable “trickle-down” economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever-deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.

There is a solution to America’s economic decline, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American's income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. This new paradigm is the subject of the Agenda of The Just Third Way Movement here and is founded on the concept of Monetary Justice.

A Petition to reform the Federal Reserve to provide capital credit to ALL Americans can be supported here. The proposed and">Capital Homestead Act would accomplish the necessary reforms.

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ABOUT Gary Reber

Gary Reber is a leading advocate for economic justice. He is the founder and Executive Director of For Economic Justice (, and an advocate and author for economic justice through broadened ownership of wealth-creating, income-producing physical productive capital. Mr. Reber is a member of the Center for Economic and Social Justice (CESJ) and the Coalition for Capital Homesteading. Mr. Reber founded with binary economist Louis Kelso, Agenda 2000 Incorporated in 1967 to advocate policies and programs to broaden productive capital ownership in urban development projects. Mr. Reber studied economic development planning at the University of Cincinnati, University of California, Berkeley, with doctorate studies at the University of Stockholm and Royal Institute of Technology, Stockholm, Sweden, and taught binary economics under John Dyckman, Chairman of the City and Regional Planning Graduate School at the University of California, Berkeley. In addition to other publications, Mr. Reber, for the past 21 years, also has published Widescreen Review, an enthusiast home theatre magazine and Webzine ( as well as Ultimate Home Design, a “green” sustainable movement magazine, now on the Web (, and is a producer of high-definition concert video specials. Mr. Reber testified March 7, 8, 9, 1973 as President of the Institute for the Pursuit of Economic Justice at Berkeley before The Committee On Ways And Means House Of Representatives––Ninety-Third Congress––On The Subject Of General Tax Reform and is the author of numerous articles published by The Huffington Post, Nation of Change and Op-Ed News, as well as nearly 2,000 major posts on the blog site.

The founding Father's

The founding Father's gathered together to form a new country and to escape the tyranny of mother England.In drafting the Constitution they set themselves apart from other world institutions and became one at the same time. What is the difference between the few Fathers and their land holdings which made them "citizens" and excluded women, slaves and the majority of individuals who were not landholders, from the few percentage points of this population who have amassed the majority of the wealth in this day and age. It seems to me the founding Fathers and the one per-centers are cut from the same cloth. The crowd who drafted and signed the Constitution were not unlike the controlling wealthy of today. Yes the Constitution is full of lofty goals and grandiose wording to make it sound like a great proposition for the masses, yet the signers held slaves and their wives were not privy to voting or holding property.
The Constitution at face value is appealing, but it was a ruse then as the wealthy did not include Joe public in any realities espoused by that document.
The Native Americans, women, slaves and the majority of the populace did not enjoy the wealth and freedom the founders did, and today we have the same situation. The common folk have had to instigate suffrage, Civil war, workers rights, Civil Rights, and now the front is Gay rights. From the inception the notion and the beginning of the Bill of Rights which states "WE the people in order to..." has never been all inclusive, if you were not born to wealth or if your skin was of another color, or your religion was not of a certain sect, or your sexual preference deviated from their idea of what it should be, there had to be a movement and laws passed to be included in the "WE". Even though we have had a civil war and a host of anti discrimination laws we are still a nation of those who have and those who have not. Weather it be life sustaining employment, or just the right to be different, we are a nation of bigotry by design or else why would we need any laws or amendments to the Constitution if "WE" simply meant all Citizens and especially if "WE" meant every human being on the planet, as far as civil rights and human rights were concerned. Immigration over our south western border is a great case in point. So many decry the immigrants are taking, whatever from them, when in fact the US stole the southwest from Mexico simply because we could and Polk had an idea that America, given to him by divine right should encompass all the land that is rightfully Mexico's. Just because we are capable of doing something like making war on our neighbors does not mean it is the right and just thing to do. WMD's and Iraq anyone? The overthrow of Mosdeq the democratically leader of Iran deposed by US and British intelligence in 1954, and the succession of American puppets culminating in the Shaw of Iran and his blood thirsty conquests all sanctioned by the US and criminals like Kissinger.
The article sounds like the Constitution in many ways, unfortunately the powers that be have conscripted the US government and they will concede nothing. They rip off the planet and we make them whole when their endeavors go south, but then I suspect they knew full well it would go south and they knew full well that the taxpayer would bail them out. The failure of the banks and their bail out was nothing more than high treason and if we had any kind of government for and by the people there would be quite a few of those one per-centers in jail and their assets frozen and returned to the people they defrauded. This last foray into destroying the middle class and the people who did the work and whose taxes supported this countries infrastructure has virtually eliminated any hope of this country returning to the days of productivity and a sustainable livelihood for the masses. Unfortunately those who orchestrated this evidently do not realize that if they do not step up and pay the taxes the working folks did for so long will result in the collapse of what we know as the US.
This system of government was established by the one per-centers of their time, is it any wonder that the same holds true today? Marx said capitalism was flawed because they eat their own and does anyone think that, that is exactly what is happening today?
We have a system here where profit is privatized and loss is socialized, for years we were taught to fear communism and we went to great lengths to stamp it out, Viet Nam, Korea and a host of other countries we beat into submission, or like Viet Nam when we left we left our sympathizers to endure the wrath of those who came in behind us. And some of our purported enemies were socialist not communist, but we were never taught the difference, Marx's socialism is a far cry from Stalin's communism, but for the fear mongers they were one and the same. It is interesting to note that those who railed against Communism/socialism are the ones who now enjoy a kind of socialism that keeps them afloat no matter how bad or criminal their behavior is.
Our top cop AG Holder is a perfect example of someone who could have been the Elliot Ness of this decade even century, but he passed claiming they were too big to fail or jail. No matter how you view our system it is a matter of record that if you are big enough you can do whatever you want. The GW Bush administration committed crimes against humanity, an invasion under false pretense, torture and it doesn't matter or absolve them of wrongdoing because they made up a term "enemy combatant" to avoid being responsible to and for protecting and abiding by the Constitution they swore to protect and defend. Now we have elected officials and others advocating throwing out the Constitution, interesting that someone actually mentioned the document as few have upheld their sworn oath and duty.
Mr Reber you blew it completely when you included property in the "Life Liberty and the Pursuit of Happiness" clause, if you believe that property has anything to do with our constitution then I suggest you are one of them, those who subvert our Constitution for your own gain. You offer no real solutions, just babble about what should be.
I suggest we hold our elected officials feet to the fire and make them accountable for the oath they took.
1. Indite Wall Street for high treason.
2. If the AG will not act indite him for incompetence and failure to enforce the laws, that is his job is it not?
3. Hold the GW Bush administration accountable for their crimes against humanity.
4. Call for the immediate resignation of any official who took an oath to defend the Constitution and are now advocating throwing it out.
5. Make examples of these atrocities and show the citizenry and the world that we are a nation of laws, beginning with the Constitution and those who have been elected and have sworn to protect and defend it.
These are difficult times and we must make the difficult decisions if we are to survive as a nation. A nation who stands for something and enforces the laws of the land no matter who breaks them. People will unite behind justice, just as surly as injustice divides us. Breaking the law and subjecting the planet and it's peoples to such tyranny is precisely why the Constitution was written, it was yet another view of world politics and as flawed as it may be, if there is any hope for a sustainable future, there has to be those who will stand and defend it. Our forefathers gave us a road map, for us to deviate or just ignore that document the one that is the law of the land, will be our demise. We as a people are separated by so many issues that are irrelevant in the big picture but we can all get behind the supreme law of the land and from that unity we can once and again prosper. Life is one of our rights under the constitution and I do not believe struggling to survive is any kind of "Life", we are struggling as a direct result of the decisions made by a select few, it is high time we hold them accountable for their decisions and take our lives back.

"The fact is that political

"The fact is that political democracy is impossible without economic democracy."

No, the author of this idea gets it exactly backwards, which makes the rest of his article irrelevant.

The actual demonstrable fact is that economic democracy is impossible without political democracy. The whole point of the various forms of tyranny, whether land-based feudalim or industrial plutocratic, or the political investors of the current post-industrial information age, is to concentrate power in order to concentrate wealth which in turn pays for further concentration power. In the current corrupt US political system we are well advanced in this process with no end in sight. To stop the vicious cyle you must sever this connection between money and power by first outlawing the influence peddling system of money in politics. This will require a homeland-security scale law enforcement effort focused on the overthrow of the constitution by corruption rather than the largely mythical threat to the state of political violence. If democracy can be recovered in this mannerm then the innumerable policies that serve the majoirty will lead to greater equality as they did after the Progressive Era and New Deal reforms down to 1976.

How could the current US plutocracy ever agree to the wishful thinking tax and economic policies proposed here? They are simply impossible to enact in the current undemocratic political system. If there is to be focus on a single issue that can solve this and nearly every other policy that has caused the decline of the country, it must be upon the restoration of democracy by outlawing all money in politics as the absolute priority.

Proposals such as made by this article, which presume that creating better ideas for policies of one kind or another are even relevant to that task, are simply counterproductive by distrating attention from the focus needed to recover democracy as the single issue behind all of the flaws in US governance, including foremost the lack of economic democracy that has occurred since money in politics was legalized in 1976. (1976 was the pricise highpoint of economic equality in recent times)

When you get cause and effect backwards, it is impossible to get your strategy straight.

What is the motive for someone to publish such an article that starts from a backwards proposition is the more interesting question. To answer that question would require an investifation into the funding structure of Mr Greber's various "non-profit" groups. Professional activists are invented by plutocrats and their foundations that fund them to distract attention from the single priority issue in US politics, that of banning their money from politics.

The article is an inadequate

The article is an inadequate but good entry to much-needed discussion.

In practice the article seems to mean by 'liberty' - whether 'economic' or 'political' - a minimum guarantee to everyone of a minimum subsistence amount of society's overall wealth: in other words, avoidance of inequalities that amount to mass destitution. This is one legitimate way to view what in practice 'liberty' has to mean.

The article's basic and correct insight is that in our highly automated production system such 'economic liberty' requires a basic minimum guarantee of ownership of capital, not just (or even necessarily) guarantee of job availability.

The article takes a bit long to get to this main point (and longer, if understandably so, to illustrate by example how we might implement this insight). But the real misfortune is that the article misses an essential half of the story (as in effect some others' comments like those of Mr Frigate are saying).

The article tells us up front that "There is no genuine political liberty without economic liberty". But it fails to note and draw conclusions from what is equally true: "There will be no genuine economic liberty without political liberty".

That is, in order to have a political system that works for rather than disastrously against 'economic liberty' we need 'political liberty': a system of public decision-making which does not concentrate all 'political wealth' - i.e. policy and law-making decision power - in the hands of a 1% - which by the way is an understatement of the US Federal Constitution's (and its copycat state versions') Roman-republic-style oligarchic concentration of political power (legislative, executive and judicial) at each level in this country (federal, state, regional, local) - with very few exceptions (small localities at the local level).

With increasing automation,

With increasing automation, we do need to separate income from jobs. But why the emphasis on "private" and "individual"? That part sounds like Milton Friedman and the whole right wing. What a weird mix.

Isn't it "life, liberty, and

Isn't it "life, liberty, and the pursuit of happiness"? Where do you find property as part of this... trinity?

Why do the Swiss have one of

Why do the Swiss have one of the highest per capita incomes in the world despite having few natural resources? Why haven't they had a war in over 200 years? Why don't they have a boom and bust economy? Why don't they have a Drug War but have few drug problems? Why do they have the best healthcare, education and environment? Why do they have few immigration problems?

If you ask them they will tell you it is because of their direct democracy.

Although this article is very

Although this article is very academic in it's approach, the underlying premise is flawed. The author is more interested in convincing us of his academic prowess than in developing a realistic solution to the existing conditions. Without taking the vast amount of space that would be required to elaborate on this point, I will say only that productive capital is an abstract idea that can not be distributed evenly. To understand the root cause of the problem we must begin by accepting the reality that the basic motivations of the 1% are political, not financial. By depriving the masses of adequate financial resources, they gain control of both the means of earning a livelihood and the general understanding of how the system works and thus control over this domain. The current general discussion of government debt, personal freedom, access of the basic needs of life and the "moral" parameters of society is exemplary of the ability of the power elite to direct and distort this conversation. Before we can begin to set the nation on a course to greater equality and prosperity we will need to engage in an honest and frank discussion of how the system actually functions. At the present time there is a general lack of understanding and a willingness to ignore those who are trying to set us straight. In short, history and facts do, indeed, matter. "Those who ignore the lessons of history are doomed to repeat them."

A profoundly sane article. To

A profoundly sane article.
To effect what it recommends requires a revolt against the corrupted Repub-Dem duopoly that serves the wealthy elite.

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