Equity capitalism is not a ‘free lunch’ program. Those that produce and provide services will be adequately compensated for value of their input. Those that provide value in the form of capital and assets are entitled to a reasonable rate of return. Those that are not actively engaged in production or the provision services in the free labor market for compensation, will be given volunteer opportunities (see Social Services) to receive a minimum compensation for basic needs, mostly non-monetary. Those that experience an interruption in their ability to produce or provide services, will receive compensation (see Guilds), that diminishes over time. Those individuals, who through no fault of their own, cannot contribute fully, will be adequately compensated by the state (tax payers), as an act of social conscience. Individual compensation is based upon the tangible value of current input and the intangible value of accumulated input. Those who are able, and do not produce, or provide services, or volunteer, receive nothing.
Publicly held corporations are to be nothing more than financial instruments for gathering capital and providing a limited liability opportunity for investments. Corporations will not have a character, personality or the rights of a person. They are not entitled to free speech or an opinion. Publicly held corporations are financial contracts that do not have any inherent rights or privileges other than standard business law.
Employee-controlled businesses (ECB)
Co-operative ventures with majority ownership by the employees will be encouraged and promoted as the preferred standard business model. An employee-controlled business (ECB) will be allowed to a sell a certain number of preferred shares to the public to raise capital, with a buy back schedule not to exceed 20 years. The pay differential between highest paid and lowest paid person in an (ECB) cannot exceed 10X. ECBs will receive preferential tax treatment, they will be permitted to allocate income to a “capital expenditure account” and defer the taxes. When funds are used for capital expenditure, they become taxable income, but the ECB receives a ‘capital expenditure tax credit’. Any resulting increase in overall value of the ECB will be reflected in the value of the employee’s shares. The fundamental policy of an ECB is to distribute the maximum amount of the income earned to the employees and allow them participation in any increase in value of the ECB. Profits distributed to employees are personal income. Any gain the employee receives upon selling their shares will be deemed personal income.