We all know that if we confiscate the entire 2017 earnings of the highest earners and sent it to Washington, you would solve almost nothing in Washington. Most of us, I hope, understand furthermore that pulling the One Percent’s wealth away from the capitalist funnel that feeds our economy would be worse than solving nothing; it would be a serious problem. This plan would, on the other hand, goad the very top layer of American wealth to do everything in its power to grow the economic pie.
I first thought of the plan applying to any person or entity with taxable income of $1 million a year or more. That was partly because a million dollars is certainly a nice income—but also because it’s an easy figure with which to work in sorting out numerical concepts. A $1-million cutoff would apply to an army of CEOs and business owners, but also to several battalions of quarterbacks, pitchers, power forwards, rock guitar players, actors, and media performers or executives. Applying the plan to the entire One Percent would cover any household making roughly $506,000 and up. Maybe the plan could be modified and applied effectively to affluent but somewhat lower pay grades. I don’t know. Economists and tax experts and actuaries and mathematicians who are whizzes with algorithms—lots of people need to have a go at fine-tuning and improving what I will call here “Economic Growth Corporations.”
These Economic Growth Corporations (EGCs) would not be think tanks, or advisory panels, or bureaucracies whose public benefit can be measured only via the most imaginative statistics. EGCs would be chartered to grow the economy in fact, not in theory and not as mere demonstration projects. EGCs would jumpstart our economic engine in ways numerous schemes, from “enterprise zones” to your town’s tax-abated industrial park, have never done.
A few weeks before this book was published I shared lunch with a very close friend whose ideas tend to land just left of center. This means, essentially, that he possesses more faith in non-essential government endeavors than I do. We discuss conflicting views with the kind of collegial civility that unfortunately has disappeared from most public discourse. I told him about my idea, in which government is involved only to enable the plan and share its rewards. I fielded questions while he did his own poking and prodding. My friend knows that not only do I believe private equity capitalism serves the American economy very well, but that I was a practicing private equity capitalist. After conversational due diligence he pronounced Economic Growth Corporations to be a most interesting idea, and perhaps—after further study—a worthy one. Why? Because, he said, it isn’t “just more private equity capital theory.” I of course would say a major reason EGCs will work is that they aren’t “just another zero-sum government bureaucracy that can spend wealth but can’t create wealth.”
For the complete article go to Chapter 10 of the book
“The Technology Imperative: What Jobs, Jobs, Jobs, Really Means in the 21st Century”
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