SOURCE: dailyre.co/1prPIJR – Upendra J. Chivukula & Veny W. Musum – 12:02 a.m. EDT March 18, 2016
In a 2014 interview with Frank Rich, comedian Chris Rock said, “If poor people knew how rich people are, there would be riots in the streets.” News flash to Chris … there are riots in the streets.
What is even more disconcerting is that the current economic platforms put out by the presidential candidates of both parties are woefully lacking. On the GOP side, virtually every candidate called for tax cuts, in particular the corporate tax. Jeb Bush proposed a 35 percent corporate tax rate cut and we saw it hit with about as much enthusiasm as a wet pancake on a cement sidewalk. Wonder why? Because Jeb and the rest of the GOP have forgotten to include a critical element of the proposal that would grant a direct benefit to working people from such a tax cut. The “trickle down” theory of wealth will just not cut it anymore.
Hillary Clinton has a profit-sharing plan to help workers that has sparked fierce debate. However, if one looks closely at the details it is so convoluted and yields very minuscule real benefit to workers. It is more show than substance and will most definitely not be profound enough to change the greatly accelerating and very troubling income inequality conundrum virtually all the poor and middle class are facing.
Bernie Sanders on the other hand does call for the kind of “inclusive capitalism” in the form of shared worker equity in one’s place of employment we like. We embrace his view on this element of his platform and applaud it 100 percent. You can hear it in his excellent 2012 Address to the ESOP (Employee Stock Ownership Plan) Convention in Las Vegas.
You may however be shocked and hear Republican President Ronald Reagan give his similar, brilliant and powerful 1987 speech on “Economic Justice” at the White House also endorsing the ESOP ideal. In it, he delivered one of histories most powerful and prescient lines of his presidency: “I can’t help but believe that in the future we’ll see in the United States and throughout the western world an increasing trend toward the next logical step — Employee Ownership.”
Senator Sanders makes a lot of sense in much of what he is espousing. That is why he is attracting such huge crowds, enthusiasm, grass roots support and donations. However, as an avowed socialist, he goes too far and inevitably increases the domination of the state at the expense of individual power and freedom. This is the classic overreach even the most well-meaning Democrats have made on the left.
Nevertheless, we do believe the problems of the poor and middle class are real. They are palpable.
The Congressional Budget Office (CBO) on Income Inequality recently put out a report that shows real after-tax income of the top one percentile has risen about 275 percent, and the pre-transfers/pre-tax income share of the top one percent has increased most profoundly. However, the wealth in the rest of the populace, especially in the lower four quintiles is stagnant, if not declining.
The Urban Institute-Brookings Institution Tax Policy Center put out a report, “The Economics of Inequality” Distribution of capital income-by-income percentile, 2011. Their chart shows the top 20 percent of households receives 86 percent of all capital gains and all capital income. Our math says that leaves just 14 percent for everybody else — pathetic and shocking.
We assert common sense and drop the other “missing” shoe involving corporate tax cuts the current presidential candidates fail to include. Yes, cut the onerous corporate taxes that are stifling growth and driving both companies and jobs overseas, but only if these tax offsets are shared with their workers in the form of equity.
Nearly 15 million workers (now more than in unions) are sharing in the prosperity they are instrumental in creating with their toil and sweat. Those and other forms of shared capitalism/economic democracy helps workers and their companies to thrive. Were you aware this massive “quiet revolution” involving tens of millions of employees and workplace equity was going on before just reading it here? We doubt it.
However, truly enlightened public policy could grow this proven, successful idea from 15 million geometrically to perhaps 150 million in one visionary presidential eight-year term. It would be even bigger than Franklin Roosevelt’s New Deal and more transformative and the benefits permanent. Benefits that would once again lead the world toward a great new and lasting cycle forward of peace and prosperity for all of humanity.
Upendra J. Chivukula is New Jersey’s BPU Commissioner and former Democrat Deputy Speaker. Veny W. Musum is a former Senior Vice President, John Paul Mitchell Systems, President, Musum Real Estate/Equity Strategies and Republican committeeman. They are co-authors of “The 3rd Way: Economic Reform or Social Revolution — the solution to income inequality… Building Inclusive Capitalism through Employee Ownership.”
March 19, 2016
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