Economic Security For Working People And Tax Cuts
By Timothy Oliver StoenCandidate for State Senator; District 2
This information is provided by the candidate
WORKING PEOPLE: Economic insecurity is increasing for working people in our district. The alarming statewide statistic is that since 1978 the MIDDLE FIFTH of all Californians has experienced a LOSS OF INCOME OF 6%. (Source: Cal. Budget Project, 12/16/97). The most just and effective way would be to PROVIDE STOCK OWNERSHIP OPPORTUNITY THROUGH CAPITAL CREDIT. Using Employee Stock Ownership plans (United Airlines, Avis) as a model, the state would, like FHA, guarantee sound loans made to workers to buy stock in corporations which are expanding and investing in new technology, the loans to be paid off by the stock itself. (Wage earners no longer can save enough collateral to buy stocks because capital productiveness has overtaken labor productiveness in the economy.) Working families would learn private property economics, strengthening Democracy. This would also stop the rise of a re-distributionist welfare state.
This "Ownership Solution" of economist Louis Kelso is the only answer in poverty and middle class economic insecurity. The RICHEST 10% of the U.S. Population ownes 84% of the stock and 90% of the bonds held by individuals (including that held indirectly through mutual funds) (Source: Federal Reserve Bulletin, Jan 1997). The net worth of the top 1% of Americans is greater than that of the bottom 92%. Eventually, opportunities could be provided all citizens to become individual corporate stock owners and to earn dividend checks from the NEW WEALTH created by technology. U.S. business investment in new plants and equipment expands each year by $600 billion. If a substantial portion of that growth was financed through citizen or worker trusts, broadly distributing the ultimate ownership of those assets, this would, as William Greider says, enhance economic security for families and "multiply life's choices for their children." We can create incentives for corporations to finance expansion through Individual Stock Ownership plans (ISOPs) available to citizens under a "Technology Homestead Act" based on the philosphy of Lincoln's Homestead Act of 1862. Industrial capital has replaced land as the income-producing asset everyone ought to own.
TAX CUTS: Individuals and families in California pay excessive income taxes as a result of government subsidies and hidden tax entitlements to corporations. This has unjustly shifted the tax burden from corporations to individuals and families. In the 1950s, the corporate tax rate was 52 percent, corporations paid almost A THIRD of all taxes, and a single wage earner could support a family of four and afford a new house, a car, and major appliances. In the 1990s, the corporate tax rate ranges between 15% to 39%, corporations pay LESS THAN 15% of all taxes, and more than 1/2 of all families have 2 or more wage earners. (Source: Barlett & Steele, America: Who Really Pays the Taxes?)WE CAN SLASH TAXES ON INDIVIDUALS AND FAMILIES BY TAKING CORPORATIONS OFF WELFARE. We should aim to restore the corporate-individual tax ratio fo the prosperour 1950s, practicing the rollback at the state level and thereby fortifying "political will" at the federal level.
Position Paper 2
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