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Post Capitalistic Society - Economic Democracy Part 4 of Fair Income, Political and Equitable Wealth Distribution a Ser

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Wealth has two lines of accumulation, from transfer though design (gift, inheritance) and from the market. As there is no constitutional right to inherit, it could be limited there. In the past we have tried to limit the market accumulation by taxes, but have largely abandoned that approach. Also we do not want to limit innovation, ambition, the desire of some to exceed their neighbors where that serves to inspire progress and wealth for all of us. We do not limit these drives because, in the end we recognize that the true wealth of our society lies in the condition, experience and motivation of all our people, their health, education and opportunities, and they need to be supported. Thus we must consider, through our democratic means, ways to limit wealth, political power and social disparities, that tend to restrict or limit those drives.

We developed the theory of Profit as the basic tax of the market to ease bringing equalization factors into the market where they otherwise do not exist. Most people throughout the world do not have the equal standing to make the traditional fair market bazar. Modern distribution of eliminating bargaining, in establishing a set prices, severely limit this opportunity and deprive the consumer of the experience and knowledge to be good bargainers. The fair market price, as recently seen in considering drug prices, is much of a myth. Walk into a Target or a Walmart and try to bargain over the price of an orange, coat or roll of toilet paper or into Walgreen's and bargain over the price of insulin. The clerk does not even have the authority to do it even if he or she knew how. While many of the sellers can look at the broad market for general demand and establish their profits based upon this, only the giant corporations and businesses have that privilege to bargain over prices and even then, only to a limited extent. So treating profit as a tax is the equalizer in the market, and allowing the seller to share in that profit as the tax collector is fair.

In the United States one would hope this moves us beyond the arguments of Capitalism verses Socialism or Communism. In the Islamic world it solves a problem found in the Qur'an forbidding the payment of Riba (usury or interest), because interest could then be considered a tax, allowable under the Qur'an in Sharia (Islamic law). The "profiteer" loan company, bank, mortgage broker or other credit offering company would merely be paid an agreed tax and able to deduct its fee as the tax collector. This should add comfort to over a billion new customers to the credit side where the payments are no longer considered interest or Islamic usury (Riba).

Banks participate in and already facilitate the consumer's use of the modern market, with consumer loans, credit and debit cards, and accounts for managing many scheduled government payments. The idea fits well with existing modes of social interaction. Few citizens or corporations would be greatly impeded while many would be serviced as this is coupled with a fair basic income.

The tax collectors fees could easily be established on some sliding scales, where small merchants, farmers, investor and craftsmen and the like would pay only an insignificant token amount and not even have to worry about it until their profit reached a certain point, a point that would be politically agreeable. That point could be considered in multiples of basic incomes. The same approach could be charged against the giant corporations and businesses in allowing their executive compensation packages before taxing those 100% on any portion of the package that exceeds these allowances. Traders and other private business men could be allowed to aggregate profits and losses over reporting periods for applications of similar maximum income rules while allowing wide investment research and development allowances. This has the added benefit to all citizens and corporations of continually recognizing the welfare of the poorest and least able among us to support themselves. This would encourage frequent updates in a really fair basic income.

Current accounting practices would probably value all property at costs plus improvements less depreciation rather than fair market value because of the need to consider profit where the property is disposed of. By removing much Fair market value speculation, the overall market could well be a flattening of economic bubbles and more stability.

But could the country afford a fair basic income? We say yes and will explore in our next editorial some suggested means of doing so.

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AB 1959 and JD 1963, University of Missouri, Columbia. 50 years active member of Washington State Bar Association, mostly civil and commercial office, trial and appellate practice and Superior Court Arbitrator for about 40 years or so, since the (more...)
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