Time's running out - Operation Abigail

1. Join the open endorsement of Operation Abigail

By signing below, you can join the public open endorsement of Operation Abigail. If you agree with the plan, please join this endorsement: We’ve got to show that it has public support.

I endorse Operation Abigail, the Adams Institute’s plan to rebuild America’s middle class. I give this endorsement because I understand these truths:

First, that in order to have a commonwealth, the commons must have the wealth. Authentic republican government is impossible without an authentic middle class. Only an independent and optimistic middle class has political agency. History furnishes no example of any democratic or popular republic which was ever sustained by a dependent underclass. As Thomas Jefferson observed: “Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.” Alexander Hamilton likewise noted: “A power over a man’s subsistence amounts to a power over his will.”

Second, that 50 years of wealth concentration has deprived the middle class of its optimism and independence. Nominal wage and GDP growth conceals the ugly reality behind a gilded façade: Since the Bicentennial, about $50 trillion in income has been diverted from ordinary workers to the top 10% relative to post-war run-rates. Whereas common sense has held since Classical Antiquity that the middle class should own at least half the wealth, America’s middling share is now below 30%; over $30 trillion off-target, and down 5% in 40 years. Middle-class anxiety fuels America’s rising anger, pessimism, polarization, faction, demagoguery, patronage, and authoritarianism more than any other factor. As James Madison wrote: “The most common and durable source of factions has been the various and unequal distribution of property.” Such faction will, as George Washington warned: “gradually incline the minds of men to seek security and repose in the absolute power of an individual.”

Third, that Operation Abigail is faithful not only to America’s founding philosophy but also to modern capitalism. Indeed, Operation Abigail scales up capitalism’s own invention of the long-term incentive plan to the national level. Operation Abigail works by capping, as by tethering, the outcomes of the top households to a multiple of the national median household net worth at an efficient mathematical ratio. Once this ratio is in place, the outcomes of ultra-rich households collectively wielding market power would rise and fall lockstep with the median. Economic elites cannot thereafter enjoy any further gains except in proportion to middle-class gains. Such gains would refresh the consumer markets which in turn nourish capitalism. As a true incentive plan, Operation Abigail does not regulate enterprise or impose any specific mandates. The methods used to achieve wealth de-concentration – and the consequences of failure – fall entirely upon market actors. Operation Abigail was thus conceived as a modern measure to heed the timeless wisdom of John Adams:

“Property monopolized, or in the Possession of a Few is a Curse to Mankind. We should preserve not an Absolute Equality – this is unnecessary, but preserve all from extreme Poverty, and all others from extravagant Riches.”

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2. Support Operation Abigail on social media

3. Know how to defeat the arguments opposing Operation Abigail

They can’t debate our guiding principle: The bigger the middle class, the better. They can’t debate the numbers. The middle class is dying. They can’t debate the betrayal: The middle class has been stabbed in the back by its own plutocracy, and both Republicans and Democrats are letting it happen.

So why object to Operation Abigail? Here are some of the most common objections, with responses:

Objection: As a conservative or libertarian, I think government’s role should be limited to defense, law, and order.

Response: We agree that would be ideal. Operation Abigail was conceived by a conservative republican who used to force other cadets to salute a portrait of Ronald Reagan when he attended The Citadel. Blame plutocracy that this is impossible today. Limited government requires a strong middle class. The Constitution was drafted when over 90% of Americans were self-sufficient farmers. But in the past 50 years, plutocracy has abandoned the principles of limited government, making it a tool to extract rents from the middle class. Plutocrats bribe politicians to enrich themselves through tax schemes, subsidies, and market exclusivity. Politicians in turn bribe swelling ranks of insecure voters with taxpayer-funded benefits. To end bribery and restore civic virtue and limited government, we must first restore the middle class.

Objection: As a conservative or libertarian, I oppose Operation Abigail because it sounds too progressive or liberal.

Response: Operation Abigail is the most authentically conservative and republican proposal today. Its vision is conservative, because from the standpoint of middle-class primacy, it would take America back to the 1950s, without the racism and the sexism. In 1776, America’s median-top wealth ratio was below 1,000:1. Today it exceeds 2,000,000:1. We need to roll it back to 10,000:1, which is even lower than it was in the 1950s, because nothing is more essential to conservative values and civic virtue than a healthy and optimistic middle class, refreshed by productive upward mobility. Its mission is republican, because in order to have a commonwealth, the commons must have the wealth. Operation Abigail would rebuild the middle class, restore the middling virtues, and rejuvenate upward mobility.

Objection: Operation Abigail is socialist because it seeks wealth redistribution.

Response: No, Operation Abigail doesn’t seek wealth redistribution. Wealth redistribution is conveyed via government agencies. Operation Abigail would instead create a market incentive to encourage market actors to voluntarily de-concentrate wealth through private transactions. It leaves the method actually used to achieve this entirely to market actors. It’s basically a scaled-up long-term incentive plan (LTIP), which every large capitalist enterprise imposes upon management. Operation Abigail uses a tax to create the incentive, but would distribute all revenues to the States, allowing them to use their shares as they see fit.

Objection: Operation Abigail is socialist and radical because it uses wealth taxes.

Response: No again, because far from abolishing private property, Operation Abigail seeks to multiply the number of owners of private property, and therefore protect capitalism. Allowing plutocracy to continue extracting prosperity from the middle class pushes America toward feudalism, which is as un-American and oppressive as socialism, and which will eventually produce a socialist overreaction. And as for wealth taxes, every middle-class homeowner has been paying wealth taxes on unrealized gains on their largest assets for decades. Now that our economy is no longer agrarian, there’s nothing radical in the idea that taxation should catch up. Indeed, people who pay wealth taxes are crazy to give billionaires a free pass on them.

Objection: Operation Abigail is radical because it uses wealth caps.

Response: Operation Abigail does not impose a fixed wealth cap. It limits household wealth based on a mathematical ratio benchmarked against the median household net worth. Today, the median is around $150k, setting the ceiling at $1.5 billion. This ceiling is today only surpassed by about 700 households. If elites increase the median to $300k, the ceiling increases to $3 billion; if to $1 million, the ceiling increases to $10 billion. This is how capitalist organizations design incentive plans: they reward management for improving a defined target metric. Operation Abigail adopts the performance metric of the national median household net worth – the single best measure of middle-class welfare – as the measure of economic success.

Objection: Not another tax! We already pay enough taxes. I don’t want mine to go up.

Response: We agree. We pay too many taxes. That’s why Operation Abigail protects ordinary Americans from taxes: it (a) forever prohibits wealth taxes on households below the ceiling (initially 10,000x the median, about $1.5 billion); and (b) prohibits rate hikes on all federal direct taxes for 20 years. And though Operation Abigail would distribute significant revenues to the States, that’s not its real purpose. Its purpose is to encourage elite market actors to voluntarily de-concentrate prosperity so that more households are financially secure and fewer households need government support. This will in turn lower the need for revenues enough to reduce taxes – perhaps even eliminate business taxes altogether – and reduce the national debt.

Objection: Operation Abigail is unfair because it punishes success.

Response: If your definition of “success” is killing our middle class through greedy crony capitalism, then yes Operation Abigail punishes that. But if your definition of success is productive, innovative, prosperous capitalism nourishing a healthy middle class and upward mobility, then Operation Abigail rewards success all day long. As a long-term incentive plan (LTIP), this is its purpose. It adopts a better, pro-middle class definition of success than the old definition of winner-take-all. This old definition of success forces our elites to cater to self-interest and special interests, neglecting American workers through tax schemes, outsourcing, immigration, monopolization, and increasingly by automation. By benchmarking national economic success against the national median household net worth – as by median-top household wealth tethering – Operation Abigail punishes plutocracy for selling out American workers as it’s done for the past 50 years, rewarding elites only for improving American middle-class outcomes.

Objection: Operation Abigail is unfair because it confiscates wealth.

Response: No, Operation Abigail won’t apply to existing fortunes exceeding the initial 10,000x/$1.5 billion cap, provided their owners don’t try to evade it. It specifically grandfathers, or exempts, pre-existing fortunes. In order to qualify for grandfathering, existing fortunes must meet all of the following criteria: (a) they must be repatriated to the United States; (b) their holders must remove themselves from American politics, including from lobbying activities; and (c) their holders must not be convicted of certain financial and electoral crimes. Operation Abigail will only apply prospectively (going forward) to newly-created wealth to the extent that covered households comply with these rules, sanitizing our democratic processes from meddlesome plutocrats.

Objection: The rich already pay their fair share in taxes.

Response: This may be true for the “lesser rich” but the servants of the ultra-rich have deceived millions into believing they carry their weight. The deception flows from a clever legal distinction between “income” and “capital gains,” and methods to avoid realizing both. Most ordinary household inflows are taxed as income (higher tax rates), most ultra-rich household inflows as capital gains (lower tax rates). On top of income taxes, regular wages are hit with extra payroll taxes. And on top of that, most ordinary households pay wealth taxes on their main asset: their home. Ultra-rich households meanwhile avoid wealth taxes on virtually all of their assets. They also use further minimize their taxes using schemes for which there is no useful corresponding benefit for regular people, like off-shore and other tax havens, tax-advantaged trusts, non-realization and income-avoidance tricks like collateralized loans, stepped-up basis, bogus deductions, and bogus philanthropy that hides tax breaks behind “charitable” purposes. Thus, many billionaires get away with paying virtually no taxes at all while everyone from ordinary workers to the lesser rich are left holding the bag.

Objection: Operation Abigail will reduce prosperity by causing capital flight. The rich will just leave America and take their wealth with them.

Response: Operation Abigail neutralizes the risks of capital flight. Most ultra-rich people are connected to the communities which made their fortunes. Even if they wished to flee, Operation Abigail ensures they won’t be taking their fortunes with them. If the very few ultra-rich households exceeding the initial 10,000x/$1.5 billion threshold (currently around 700) tried to move money off-shore, they would merely forfeit their ability to grandfather existing fortunes. And as for assets already off-shore, failure to satisfy all grandfathering criteria as by failing to repatriate wealth similarly effectively acts as an excise tax. Tax nexus is easy to achieve, as it is the price of market access for any enterprise in which covered households hold an interest. Changing residency, renouncing citizenship, or transferring wealth to heirs will not defeat the tax.

Objection: Operation Abigail will reduce prosperity by reducing innovation, and therefore job creators.

Response: Operation Abigail will not impair innovation one iota, because it deliberately sets the ceiling high enough to preserve the monetary goals for which most ambition strives. What budding visionary-genius entrepreneur won’t get out of bed in the morning for only $1.5 billion? The $1.5 billion threshold is only surpassed by about 700 households, a substantial portion of which inherited their wealth anyway. And as for the job creation point, about 2/3 of jobs are created by small businesses whose owners live nowhere near the $1.5 billion ceiling. Quite to the contrary, the wealth de-concentration prompted by Operation Abigail will nourish the consumer markets, which will only generate more demand for more businesses and more jobs. After all, it is impossible for entrepreneurs to sell anything for which there is no demand, and it is in turn impossible for demand to be strong where middle-class prosperity is weak.

4. Learn our path to victory, and teach it to others

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Gaius Gracchus taught us that victory is a matter of knowing where to drive the wedges within your opponent.

We will incentivize the latent but supreme authority within our constitutional system, the States, by allocating all revenues to them.
We will incentive virtually all Americans, including the lesser plutocracy beneath the ratio, through a guarantee of no wealth taxes and a moratorium of all tax hikes for 20 years.
We will incentivize corporations and businesses by imposing no regulations or taxes upon them, leaving their responses a matter of internal affairs.
We will discourage plutocratic resistance by grandfathering existing fortunes, subject to repatriation of wealth and their withdrawal from politics.

5. Propagate Operation Abigail in the real world

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