The Capital Homestead Act: Innovative Change to Expand the Middle Class

Presented by:The Center for Economic and

Social Justice(www.cesj.org)

Founding Fathers Intended it …

The Courts Ended it …

*Here’s How It Is

Wealth, accumulated over generations, has given great power to some.

New technology has created vast increases in wealth in a small group. In Fact …

1% of our population holds more of the wealth than the bottom 90% combined.

There are now 400 billionaires in America.All this concentrated wealth Has Unbalanced Our Political and Economic System. It is damaging our Society

Has kept the 99% economically powerless!

* Monopolization of Capital Ownership and the Concentration of Power

*Two Factors Create Wealth

Labor

Salaries/Wages

Ongoing Expense

Less Profitable

Capital

Investment

Depreciated Asset

More Profitable

Capital

Labor

PlantEquipmentLandCashPatents/Copyrights

CAPITAL

TimeEffortExpertise

LABOR

*Productiveness of Capital

Productiveness of Labor

*And … It’s Getting Worse!

The relative value of Capital has been rising.

The relative value of labor has been falling

The V

alu

e o

f C

apit

al

The V

alu

e o

f Labor

Too Many (99%) Own Too Little.

*Why Does The 1% Own More Than The Other 90%?

*5 Reasons … Why?

• Retained earnings enable corporation NOT to pay out profits to stockholders

Much of our Nation’s wealth is held in the stock of corporations

• Automation (tools) eliminate the need for labor• In the near future, tools (computer software, & systems)

will replace human labor – permanently

Capital intensive, automated tools replace labor

• Over time the 1% have paid Congress to change the laws to unbalance the playing field

Our tax system provides loopholes for the 1%

The Wealth of our Nation is Monopolized

1.Much of our wealth is in the capital stock of

our corporations.

• Corporations are where wealth is hidden

Why is so much wealth in corporate stock?

• Because Corporations normally do NOT pay dividends to stockholders.

• Corporations changed the laws of ownership to prevent equitable sharing of profits by stockholders

How is wealth hidden in stock?

• Because monopoly gives the 1% unjust economic and political power.

Why do the 1% want to control the laws of ownership?

2.Capital Intensive, Automated Tools

Replace Labor

• Because Automated Tools Eliminate Jobs

Why are there no jobs?

• The Cooper• The Secretary• The Laborer• Middle Management

Whole classes of jobs are being reduced, or eliminated

And … the jobs are NOT coming back

3.The System has created barriers to

spreading ownership.

• Because The System is structured to concentrate power in the hands of the 1%

• The System is geared to create jobs for the many and ownership for the few.

Why has the system created barriers to ownership?

4.Our Monetary system is tied

to a flawed economic

concept

• The traditional monetary model disproportionally favors the 1%

• Economists work for the 1%• Academia is also dependent upon the favor of the 1%

Why are we tied to a flawed economic model?

5.Our tax system provides

loopholes for the 1%

• Because it furthers their interests is accumulating wealth and power.

• The System assumes the need for savings of the rich to finance growth.

Why does our tax system provide loopholes for the 1%?

• It has always been thus• The rich pay the government• The rich become powerful• And the powerful become rich

Why has our government permitted this to happen?

* Economic Justice Through Shared Economic Growth

Ownership AND Jobs …

*The Capital Homestead Act

Will:

• Grow The Economy• Balance The Budget• Fix Social Security• Solve The Mortgage

problem• Establish truly free markets

*To Grow The Economy

IncreasedProduction

IncreasedConsumpti

on

Economic Growth

*Economic Growth

“A man who is dependent upon the good will of another man for his sustenance, cannot be a good citizen”Political Philospher: Dr.Mortimer Adler – Mike Wallace Interview, 1958

* Remove Barriers to Citizen Ownership of Private

Property!

End Retained Earnings

• Corporations - payout profits as dividends

Fund expansion through stock sales

• Expand ownership of corporate stock• Eliminate monopoly on ownership by 1%

*Remember, It’s All About the

Money!

Gov’t Creates Non Asset Based Money

• The Gov’t & Other Sources Create Two $ Trillion in new capital Annually• Only 60% of Gov’t Spending comes From Tax Revenue• The Gov’t ‘Sells’ Debt to the FED• We Are Slowly Bankrupting the Country

Present Capital Formation Perpetuates Monopoly

• 1% Control Who Gets Funds• And the Tax System (controlled by the 1%)• Income Distributed Through Jobs.

• Many of these jobs are eliminated by technology.

*Increase Productive

Capacity

Productive Credit for Business and Industry

• The Fed to discount paper for Fed member banks on loans to CHA’s

• Banks accept capital loan applications • Risk insurance substitutes for collateral

*Increase Consumer Spending

Create a “two-tiered,” credit system

• Tier one – non-productive consumer & gov’t credit• Tier two – productive capital credit

Capital Homestead Accounts (CHA)

• CHA for every American Citizen • Estimate $7K in capital credit, per capita, per annum• Only used to acquire productive assets• CHA loans repaid before dividends distributed

*Fair & Simplified Tax Policy

Simplified Single Rate Tax Above Exemptions

• $30,000 deduction for adults• $20,000 deduction for all dependents• Single Tax Rate Based Upon government budget

NO Double Tax

• No tax on corporations on dividends paid out• Taxes paid by recipient

No Tax on Estate if distributed

• Tax Recipients over $1 Million in inheritance

*Some Things to Remember

*“Give me control of the money and I don’t care who makes the laws.”

Baron Rothschild

International Banker

*“The meek may inherit the earth, but NOT the mineral rights.”

* Oilman

*“A man who is dependent upon the good will of another man for his sustenance cannot be a good citizen.”

* Dr. Mortimer Adler

* Political Philosopher

Center For Economic and Social Justice