Overcoming Racism to Advance Economic Opportunity

WM: Overcoming Racism to Advance Economic Opportunity, April 6, 2022

The title of this hearing is ironic in two ways. First is its association with Opportunity Zones, which are merely the latest provision for “gentrifying” neighborhoods by getting older people of color and the poor out of the neighborhood. In recovery, there is a saying. The best way to hit bottom is to stop digging. Let's try doing that first. I addressed this topic in October in comments to the Oversight Subcommittee, which are attached.

The second way it is ironic is that the real way to overcome racism is to ensure economic opportunity. Racism (and other forms of bigotry) arise to divide the middle and working classes and distract them from the real work of economic justice. 

Last month, we provided comments to the House Budget Committee on Ensuring Women Can Thrive in a Post-pandemic Economy. These comments are made in the context of Build Back Better from the FY 2022 Budget. For now, this is the best course. They are attached.

In the long run, employee-ownership must be developed further and extended to the provision of social services to its members. An employee-owned economy will dramatically increase both opportunity and equality. The way to truly get there is for employee-owned firms to extend the benefits of ownership to their overseas subsidiaries and supply chains. A working class with nothing to fear leaves racism, nativism, sexism and all divisiveness behind. If we proceed from that point, ending racism becomes possible.

We have attached our tax reform plan, which shows how to fund more robust child tax credits, childcare and health insurance and how to move the control of enterprises from public and private ownership to cooperative ownership using an asset value added tax. Even without comprehensive reform, simply allowing zero rating capital gains taxes for public stock sales to ESOPs as is now the case with sales of privately held firms will jump start that sector. The best way to increase employee-ownership is a tax cut. 

The asset value added tax would be marked to market at initial public offering, option exercise and first sale after inheritance, gift or donation. Heirs can keep the farm or business as long as they operate it, but will face the same tax burdens at sale. This alternative is preferable to what is in the current President’s Budget.

Attachment: Opportunity Zones Video

Attachment: Ensuring Women Can Thrive Video

Attachment: Fiscal Year 2022 Budget

Attachment: Tax Reform (with videos attached)