Prosperity Sharing: Not Just for the 10%

The Alaska Permanent Fund, established by a Republican governor nearly a half-century ago, has allowed Alaskan residents to share in the profits from oil and mineral extraction in the state.

As The New York Times explains, "Similar socialized funds—sometimes called sovereign wealth funds—are common in other conservative states." In fact, The National Interest reports that "the great majority of states that have a domestic sovereign wealth fund are solidly Republican states." Texas, Wyoming, and North Dakota, for example, all maintain multi-billion dollar public wealth funds.

Democrats need to think even bigger if they want to win back respect—and the vote. They need to consider that American productivity goes well beyond oil and gas, that it's the result of 75 years of progress in technology and medicine and finance and numerous other industries, and that it derives from the sweat and inspiration of all of our parents and grandparents. Stock market gains reflect our productive past. All of us should reap some reward from that long-term effort.

All families, rich or poor, would share in America's prosperity.

New wealth should not be taken only by the 10% of Americans who own 93% of the stock market. While the S&P 500 has gained a pre-inflation average of over 10% annually over the past half-century, the returns on that growth have accrued passively to the richest among us.

Large-scale public wealth funds have been proposed to correct the imbalance. Funding will ideally come from a Financial Transaction Tax or some form of levy on market capitalization. The argument for a Financial Transaction Tax has been made for years by Dean Baker and Sen. Elizabeth Warren (D-Mass.) and Sen. Bernie Sanders (I-Vt.). An alternative is a small tax on stock holdings. The Peoples Policy Project noted that "at the end of 2017, the market capitalization of listed domestic companies was $32.1 trillion. A one-off 3% market capitalization tax would thus bring in around $1 trillion of assets."

Current U.S. stock value is over $50 trillion. Just a 2% tax on that amount would return $1 trillion. Each one of America's 127.5 million households would earn nearly $8,000 per year. All families, rich or poor, would share in America's prosperity.

Of course, the millionaires who own almost the entirety of the stock market will resist even a small percentage payback to the country that made them rich. Despite the unlikelihood of getting the super-rich to part with their money, there's a good reason—other than the fairness of recognizing society's contribution to long-term wealth gain—for stockholders to embrace an American Permanent Fund. As noted by reliable financial sources, consumer spending directly influences stock market performance. With the massive trillion-dollar surge in consumer spending, stock market growth is likely to make up that tiny transaction or capital holdings tax, and then some.

It's certainly worth paying a nominal amount to stimulate the economy and boost one's own stock portfolio.

But where is the political will to make this happen? Perhaps a proposal by Democrats for a nationwide public fund through a Financial Transaction Tax will convince a cynical middle-class America that the Democratic vision focuses on the needs of society rather than on rich individuals.